Carbon Trust lighting for business - in plain English!

 

NOTE: If you have already had a Carbon Trust lighting survey and are now looking to find suppliers to upgrade to Carbon Trust qualified or approved energy efficient lighting - use our "find lighting for me" service

 

This article explains how the Carbon Trust can provide financial support to your business if you are looking to install energy efficient lighting which can save up to 80% on existing lighting.

 

The Carbon Trust offer two business schemes - interest-free credit loans to purchase energy efficient lighting (The Energy Efficiency Loan Scheme) or tax relief on investment in energy efficient lighting equipment (The Enhanced Capital Allowance Scheme).

 

 

In this scheme, UK-based Small and Medium Businesses (SMEs) may apply for loans from £3,000 to £400,000. The interest-free loans are unsecured, have no arrangement fees and are repayable to the Carbon Trust over up to a four-year period. The monthly loan re-payments are often less than monthly savings provided by the energy efficient lighting - meaning positive cash-flow right from the beginning!

 

The amount loaned is related to the Carbon Trust's projection of your project's carbon reduction. The qualiying carbon threshold is to 1.5 tonnes CO2 / £1,000 of loan. In more technical terms - this means a project making annual electricity savings of 8,379 kWh will be eligible for the minimum loan of £3,000.

 

Illustration - A business applies for a 0% carbon trust loan of £20,000 to replace older ineficient lighting in one of its warehouses. The projected energy savings come to 60% - The loan is structured so that the payback time of 2 years is exceeded by 12 months.

 

How to apply? - We can put you directly in touch with lighting suppliers who provide qualifying lighting equipment can assist with the application process for an energy efficiency loan or you can go through the process yourself on the Carbon Trust website.

 

 

The Enhanced Capital Allowance (ECA) scheme provides businesses with 100% first year tax relief on investment in lighting equipment on their Energy Technology List (ETL). The scheme allows businesses to write off the whole cost of the equipment against taxable profits in the year of purchase, providing a cash flow boost.

 

Illustration - If your business pays corporation tax at 28%, every £1,000 spent on qualifying equipment would reduce its tax bill in the year of purchase by £280. In contrast, for every £1,000 spent, the generally available capital allowance for spending on plant and machinery would reduce your business' tax bill in the year of purchase by £56. In other words, an ECA can provide a cash flow boost of £224 for every £1,000 it spends in the year of purchase.

 

How to apply? - Claims for ECAs are made in the same way as other capital allowances on the Corporation Tax Return