Green Funding Guide: Making Renewable Projects Accessible
In 2016, 17% of the total CO² emissions in the UK belonged to the business sector. Investigations into how companies can reduce these emissions – along with the ever-increasing energy costs they’re usually coupled with – are now surging in popularity.
Often, a method of reducing carbon heavy consumption is to look at green energy alternatives, such as solar photovoltaic (PV) panels for electricity and biomass or heat pumps to meet your heat demand. Each technology comes with its own set of financial benefits, including energy savings and payments from relevant government backed incentive schemes – the Renewable Heat Incentive (RHI) and Feed in Tariff (FIT) – and make a lot of long term business sense.
However, finding the capital to make that initial leap can sometimes be the main deciding factor. The renewable energy sector is striving to make the technologies more accessible, and now work with several organisations to offer funding packages suitable to your needs and business.
Carbon Trust – Green Business Fund
Aimed at small to medium enterprises (SMEs) in Wales, this private scheme offers a capital contribution payment to anyone introducing renewable energy to their business, or upgrading existing out of date equipment.
The scheme has already supported at least £30 million worth of projects and is expected to offer funding until 2018 for businesses looking to reduce their carbon emissions and electricity costs.
There are two options for businesses through the Green Business Fund – a capital contribution and zero interest loan – and these can also be used together, making the overall cost of a project much more accessible.
Applying for the capital contribution can fund up to 30% of your total project, up to a value of £10,000. If you couple this with a zero interest loan the Trust offers, you could finance the rest of the project from as little as £3,000 to £200,000 – and the repayments will be suited to the energy savings you will be making, and in most cases, span from 1 to 4 years.
All installers linked to the Green Business Fund are fully vetted and qualified before they are granted acceptance onto the scheme – The Greener Group are listed and have already installed three renewable systems under the scheme.
Solar Power Purchase Schemes
If you have high energy consumption, a solar photovoltaic (PV) can help to offset the inevitably high energy bill that will accompany your usage. Often for larger PV systems, a company may not have room in their budget to cover the outlay costs of a system that will match their requirements.
Power Purchase Agreements (PPAs) are a great way to reap to benefits of a solar project, without the burden of financing it. The investment teams involved lease the airspace above your building for 25 years and install a PV system free of charge. During the lease time they will monitor, maintain and insure the solar system at no cost to you and you pay an agreed price per unit for the solar electricity that you use from the system.
The greatest benefit by far of this scheme is the long-term protection against current and future energy markets – the unit price of electricity agreed upon at the beginning of the scheme is fixed from the outset, and will only increase in-line with the retail price increase (RPI). These guaranteed savings allow you to budget more effectively, with less uncertainty. RPI currently stands at 2.5% and projected energy inflation is 5.7%, so this kind of agreement is beneficial in the long run.
Corporate Social Responsibility (CSR) is now often a big player in renewable schemes, with pressure mounting for business and industrial sectors to reduce their carbon emissions and eco-conscious customers influencing markets.
Although the airspace is leased, transfers to new occupants (for example, if you move or sell the building), is simple and will not hinder business expansion or relocation plans.
Renewable Energy Loans
If you’re not eligible for something like the Green Business Fund, or want to benefit from the Feed in Tariff (FIT) then there are companies who offer loans specifically designed to finance renewable installations.
These loans typically have more flexible payment terms, which can be tailored to the expected returns you’re estimated to gain from the relevant incentive schemes and energy savings. The funding spans over payback periods of 1 to 5 years, and can provide part or full funding for your project.
One in three farmers surveyed by the NFU admitted that financing land based renewable projects was the biggest barrier to them accessing one of the fastest growing revenue schemes for the UK agricultural sector, while high street banks are making it more difficult for those looking at renewable financing, either by not providing cover at all or imposing strict rules and regulations.
Solar Equity Release
Finally, if you’re one of the many who benefits from the higher Feed in Tariffs introduced in 2011-2012, there are now schemes to help you release the equity from your system and avoid the drip feed of quarterly payments.
Solar buy back, or equity release schemes, are available for domestic and commercial customers and work on the proviso that you sell your FIT rights to an investment partner. In return, they will maintain and monitor your system free of charge, as well as pay you a lump sum, reflected in the value of your remaining payments and estimated future yield.
Making green energy accessible
Every funding package exists to make green renewable energy more accessible for end users and help you reach your savings and emissions goals. If you would like further information on any of the mentioned schemes, contact us today.