Facilities managers can achieve considerable savings by investing in more energy efficient equipment. Energy efficiency can also bring a variety of benefits to an organisation including compliance with environmental standards and improved reputation. However, selecting the right equipment to invest in can be difficult. By using the Energy Technology List (ETL) businesses can have confidence that they are buying plant and machinery that demonstrates a high standard of energy efficiency.
The ETL is a free-to-use list, which contains approximately 14,000 products across 56 technology categories. Some of the technologies featured on the list are products such as hand dryers, boilers, lighting and ventilation and air-conditioning equipment.
Due to the rigorous standards and testing processes, customers can be confident in the knowledge that the products they purchase off the list are the highest performing for energy efficiency. To put that in context, the products featured are approximately the top 25% of the market in terms of energy efficiency. This can bring about huge energy and cost savings compared to less efficient alternatives. This is an important factor when it comes to buying new equipment, as facilities managers are increasingly looking beyond up-front capital costs to consider the running costs of the products.
The Energy Technology List
As a result, the ETL has become an integral part of the procurement process for many large businesses and public sector organisations. For example, businesses seeking to achieve a high rating against SKA or BREEAM criteria when designing or refitting buildings, can look to the ETL to help them through this process. This is because both schemes include ETL-listed products in their criteria.
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We looked at the potential annual savings when installing a refrigeration system controls upgrade to evaluated the kind of energy savings that could be made by integrating the ETL in a business’ procurement process. When installing equipment at a commercial site running 8 evaporators and one cold room, the potential savings that could be achieved in a year roughly comes to £2,900, 26,200 kWh, and 9.2 tonnes CO2.
ETL products have a typical additional capital cost of £3,600, but lifetime energy and ECA benefits of around £31,000 at today’s prices – meaning the financial benefit of choosing an ETL listed product is over eight times the initial investment.
Investing in products listed on the ETL can also potentially provide a cash flow boost through the accompanying accelerated tax relief, the Enhanced Capital Allowance (ECA).
A further benefit to the use of higher energy efficiency equipment is the ability to reduce carbon dioxide emissions, helping companies to combat climate change and meet required internal or external sustainability targets. Energy savings resulting from purchases of ETL-qualifying equipment have resulted in the sizeable abatement of carbon emissions in the UK – equivalent to approximately 88 million tonnes of CO2 since 2001.
What is the Enhanced Capital Allowance?
The ETL does not only create energy and cost savings for organisations, but can also provide a cash flow boost through the accompanying tax relief, the ECA. Businesses are able to claim an ECA for investments in ETL-listed products until April 2020.
With under a year remaining on the availability of ECA tax relief, facilities managers and procurement professionals should make the most of this time-limited window and benefit by upgrading to high performing energy efficient equipment. The UK government estimates that the ECA scheme has been used by UK businesses to capture around £100 million a year in accelerated tax relief.
ETL is managed on behalf of BEIS by the Carbon Trust.
HMRC is responsible for tax related aspects of the ECA scheme.