Well targeted energy efficiency projects can not only deliver significant cost savings, but can even provide improved cashflow – These projects can typically be funded from existing revenue expenditure via Pay-As-You-Save lease agreements or via Carbon Trust loans.

Cost Savings

Cost savings are not only delivered by a reduction in kWh at the electricity meter, but also in reduced peak demand charges, reduced breakdown and hence reduced labour costs. Increasingly, cost savings will also be made in relation to environmental tax and initiatives such as Climate Change Levy and the CRC Energy Efficiency scheme.

Guarantee of Increased Profits

How can your company increase profits? Or in these days of rapidly increasing energy costs, how can your company maintain their profitability?

You could increase annual sales through investment in inventory, staffing costs, opening a new outlet or make Capital investment in new equipment. Consider a company trading at 5% net profit – an increase in turnover of £1,000,000 would be required to create an increase of £50,000 in profit.

Alternatively your company could make guaranteed savings to existing expenditure. A retrofit lighting project or other energy management project which saves £50,000, is generating £50,000 of additional profit for that company this year, next year and so on.

Which is easiest to achieve and a guarantee of increased profits?

Pay-As-You-Save and Carbon Trust 0% Interest Loans

“We would love to implement this project, but we don’t have budget”

What the quote above indicates is that the company in question does not have readily allocated Capital Budget. As a general rule, the cost of implementing an energy efficiency solution is not new expenditure. The company is already paying that money to a utility provider each and every month. The energy saving project will typically pay for itself out of the savings delivered – in many cases the monthly savings are substantially greater than the monthly loan or lease repayment; hence providing a positive cashflow payback from day one.