Investing in approved energy saving technologies in the UK has a triple benefit. The first is that plant and equipment operate more efficiently and so reduce energy costs.  The second is the  Enhanced Capital Allowance scheme administered by HMRC allows companies to write off 100% of the cost against that year’s taxable profits. Thirdly, by running plant more efficiently you can reduce your exposure to the Climate Change Levy.

In introducing the 2008 Climate Change Act,  the UK Government established the world’s first legally binding climate change target. Its aim is to reduce the UK’s greenhouse gas emissions by at least 80% (from the 1990 baseline) by 2050.

Climate Change Levy

This programme saw the introduction of the Climate Change Levy (CCL) – a tax on all energy such as electricity, gas and coal for use as fuels (that is for lighting, heating and power) by business consumers, including consumers in industry; commerce; agriculture; public administration, and other services.

The CCL is intended to change business behaviour in the UK to reduce energy consumption and/or consider using energy produced from renewable sources such as wind farms, solar energy and hydro power. By reducing energy consumption, companies will minimise the impact of this tax. From 1st April 2014 to 31st March 2015, the CCL on electricity is0.541 p/kWh and for gas, 0.188 p/kWh.

Enhanced Capital Allowance

At the same time, the Government introduced the Enhanced Capital Allowance (ECA) scheme.  The ECA scheme offers a 100% First-Year Allowance (FYA) for investments in certain energy saving plant and machinery. If you buy equipment that qualifies, you can write off, for example, 100% of the cost against that year’s taxable profits. This could save you a lot of money, as well as reduce your business’ energy use, carbon footprint and climate change levy payments.

The ECA energy scheme supports a variety of energy saving technologies, such as energy efficient boilers, lighting, refrigeration equipment, and metering and monitoring systems. This guide explains how the scheme works, what energy saving products qualify, and how to claim an allowance. Qualifying products and technologies are registered on the Energy Technology List (ETL).  Only new equipment is eligible for an ECA.

Energy Technology List

The Energy Technology List is managed by Carbon Trust on behalf of the UK government. It provides information on products that qualify for the government’s Enhanced Capital Allowance (ECA) scheme to allows businesses to write off the entire cost of any green technology  against taxable profits.

To find out more about the scheme, browse products on the Energy Technology List, or find out how to get your product approved, visit the Department of Energy and Climate Change’s ETL website.

999 Inverters ETL listed inverters

We supply inverter drives on the Carbon Trust’s Energy Technology List from ABB UK, IMO, Mitsubishi Electric, Omron Automation and Schneider Electric UK

 From The Carbon Trust

–  Energy Technology List for inverter drives

– Variable speed drives:  Introducing energy saving opportunities for business

– Motors and drives: A guide to equipment eligible for Enhanced Capital Allowances (download)