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Could businesses claim VAT reductions on energy efficient materials?

The election is a stone’s throw away and energy issues are hotting up as politicians look to secure votes. Big news of the moment is a statement released by the Energy and Utilities Alliance (EUA), which is calling on all political parties to set VAT at 5 per cent for all energy efficiency materials and the installation thereof.

Mike Foster, Chief Executive of EUA, argues:

“Successive Governments promote energy efficiency measures, encouraging homeowners to install everything from insulation, new boilers to state-of-the-art controls yet there are huge anomalies in the levels of VAT charged.

Installing a new control, as a one-off job, would attract VAT at the lower rate of 5 per cent, making it attractive to the consumer yet installing the same control, as part of a wider system improvement, would attract VAT at the standard, 20 per cent rate. The current system is inconsistent and sends out mixed messages to consumers and it needs clarification.

Green Deal, ECO and other energy efficiency policies have failed to deliver, simplifying the VAT rules around products and their installation is something that could be done reasonably easily, it would provide real help to hard-pressed consumers.”

Foster’s point clearly targets home owners but what about businesses that have turned their companies into ethical and sustainable entities, costing both time, effort and an initial pay-out? If home owners were to receive a VAT reduction incentive should business owners not be afforded the same privilege?

Company VAT is normally chargeable at 20 per cent but your business may be liable for less if it satisfies certain criteria, namely de minimis (low energy consumption), which is applied to businesses with electricity demands below 33kWh per day or 1,000 kWh per month (on average) or gas consumption below an average of 145kWh (5 therms) per day or 4,397 kWh (150 therms) per month – these businesses will qualify for a reduced VAT rate of 5 per cent. (The assessment of your consumption can be made by you or by your supplier, as a meter reading or as an estimate.)

The next question to consider if businesses were to be made eligible for some sort of VAT reduction is what type of energy efficiencies could be implemented (with the added intention of reducing costs in the long term)? Things like state-of-the-art controls (for heating and hot water), new boilers and insulation (around windows, doors, walls, floors, ceilings lofts) have been mentioned but other ideas that will be relevant to your business in context are:

• Wood-fuelled boilers
• Micro combined heat and power units
• Solar panels
• Ground-source heat pumps
• Air-source heat pumps
• Wind turbines
• Water turbines

Again, businesses have not been mentioned in EUA’s reduced VAT proposal but it’s a space worth watching! And in the meantime, for more information on how to up your business’s energy efficiency (products and installation) feel free to contact the CH Systems team on 0208 302 8149 or info@chsystems.cc.

Sources: uea.org.uk – “Reduce VAT to 5% on all energy efficient materials and their installation” and simplybusinessenergy.co.uk – “Electricity and Gas Bills – Understanding VAT”.

Government gears for launch of ‘business friendly’ Renewable Heating Incentive

The price of energy increased notably over 2013’s winter months – whilst energy providers profited, many business and home owners buckled under the burden of hefty payments. In reaction, the government has put plans in action for the late-Spring launch of a Renewable Heating Incentive (RHI) aimed at cutting energy bills as well as CO2 emissions (the heat used in homes, public buildings, businesses and factories account for half of all the UK’s carbon emissions).

The scheme (covering England, Scotland and Wales) is an effort to diversify the UK’s energy supply in the face of the threats and challenges emanating from climate change; it will provide long term support for renewable heat technologies, from ground-source heat pumps to wood-chip boilers. And the RHI has business owners (both big and small) in mind. Not only is the scheme environmentally friendly (using solid biomass in place of fossil fuel can reduce harmful CO2 emissions by as much as 90 per cent) but it is also financially attractive, flexible and on a practical level, relatively easy to build into a building’s existing energy arrangement.

So, the question: if you buy into the RHI, what does it mean for your business? – How will it save your business money? And what practical steps need to be taken to implement the scheme?

Mike Hefford, Head of Renewable Technologies at Remeha Commercial, says that biomass heating offers significant fuel cost savings of between 50 to 80 per cent when used as an alternative to heating oil, LPG or electric systems. Hefford explains as follows:

Commercial end users can benefit from up to 8.8p/kWh of heat generated, depending on the size of the biomass system. The rate for large biomass plants of greater than 1MW has also recently doubled to 2p/kWh (although payments of other sizes remain unchanged). Tariffs for domestic biomass have also been confirmed at 12.2p/kWh from spring 2014. Payments, administered by Ofgem and made quarterly over a 20-year period, equate to around 15 to 20 per cent return on investment. The Government has recently introduced a degression mechanism that will trigger an automatic fall in tariff levels for biomass installation smaller than 1MWh once 120% of expected deployment is reached. This does not apply to biomass installations of 1MWh but, under the RHI, this capacity and above will be required to report quarterly on the sustainability of their biomass feedstock.

In translation: the RHI implies lower operational costs and savings for faster payback. Hefford argues that of all the possible renewable heating solutions for commercial and industrial applications, biomass is likely to bring the most important benefits and savings. Something that must, however, be noted that switching to a renewable heating system will cost you money. According to Hefford, while biomass heating is a mature, proven technology, as with all technologies it pays to employ the experts to design the appropriate low carbon system for your particular needs. In light of which, perhaps you’re a business or organisation that is interested in taking part in the scheme but are unable to raise the initial capital cost?

Firstly, the point of the RHI is to support the industrial and commercial sectors as it is these sectors provide the most cost effective way of increasing renewable heat. It is therefore crucial that renewable heat becomes a viable option for businesses. The Government expects that the RHI will stimulate the market to provide a number of different financing options, which could cover both the capital costs (e.g. cost of installing the equipment) and ongoing operational costs (e.g. fuel costs) for the lifetime of the installation. Possible finance models include:

  • Energy suppliers – providing renewable heating as an option alongside their current package of services.
  • Banks and other lenders – lenders to finance upfront capital costs for an assigned proportion of the RHI through a contractual arrangement.
  • Energy service companies – a combination of local authority, community and energy company expertise in a body that provides a finance package to deliver renewable heat technologies using RHI payments.
  • Public sector financing – local authorities are potentially able to take advantage of economies of scale.

Applications to be part of the Non-Domestic Renewable Heat Incentive, and for financial support, should be made online (to Ofgem) and can take up to six weeks to approve, depending on the complexity of the proposed heating installation. – CLICK HERE for more information, and to apply for the RHI.

If you’d like further information on the Renewable heating Initiative, feel free to contact the CH Systems team on 0208 302 8149 or info@chsystems.cc.

Sources: Gov.uk – “Renewable Heat Incentive”; Remeha.co.uk – “Turning up the heat for biomass”

Businesses cut water bills by recycling ‘greywater’ with new product

Statistics say that water bills are rising 5.5 per cent each year, for both consumers and businesses – which is why more and more commercial enterprises are considering ‘greywater’ recycling as a way of reducing water bills.

‘Greywater’ is the water that comes from sinks, showers, tubs, and washing machines, which usually contains traces of dirt, food, grease, hair, and certain household cleaning products. Greywater is not water that comes from the toilet or has come into contact with faecal matter from nappies (for example) and the like. In other words, it’s water that appears dirty but is ‘safe’ to use for irrigation purposes – in soil and on plants (as long as there is nothing toxic in the water – bleach, shampoo, bath salts etc.).

Which is great but if you’re running a business it’s not always easy to ensure that chemicals are kept out of the water for the sake of recyclability – especially if you’re running a hotel or B&B, or perhaps managing a care facility, restaurant or hair salon. And if you are able to control what goes down your business sink, maybe you have no garden in which to pump the used water. But there is another way to recycle greywater, other than for irrigation purposes – and that’s to use it in flushing toilets.

Water and heat recycling company Reaqua Systems has a product range that collects waste-water (greywater) from sinks, baths and showers and recycles it for use in flushing toilets – thus reducing water consumption by 30 per cent!

Reaqua Systems’ reAqua Unit takes all greywater waste and redirects it through a compact reAqua filtration unit, treating it with a proprietary disinfectant and then sending it on (via pipe) to supply all flushing water needs for multiple toilets. If one toilet is specified, gravity feed is sufficient. If two or more are connected, an electrically pumped feed is provided within the unit.

And if you feel like saving your business even more money, the reAqua+ Unit not only recycles greywater (thus saving on water bills) but reduces energy bills by recycling heat. The unit recovers the heat from the bath and shower water used, and transfers it to the building’s central heating system. The installation setup is similar, but it includes the addition of a heat exchanger located in the greywater storage tank. Recovered heat is transferred to the cold feed of a combi-boiler or hot water cylinder, reducing demand on the existing central-heating system.

The filter bag and proprietary disinfectant liquid that are installed with the units will need to be replaced annually (under normal circumstances) – which can be done at the same time as an annual service and should cost no more than £20.

With the energy and water recycling, your business is looking a 50 per cent bill reduction, which is a huge money saver!

To find out more about these products, visit Reaquasystems.com and chat to your plumber about installation probability and costs.

For more information, feel free to contact the CH Systems team on 0208 302 8149 or info@chsystems.cc

Why it’s essential to maintain heating appliances

Did you read about the family that ended up with suspected carbon monoxide poisoning from a faulty boiler at a farmhouse in Morriston, Swansea? – reported by bbc.co.uk on March 8, 2013.

An elderly couple and a 16-year-old boy were given oxygen therapy at the scene by fire crew personnel before the ambulance arrived to shift the victims off to hospital for proper evaluation. The three are okay but two cats that were present on the property died from gas inhalation.

A spokeswoman for the injured parties has revealed that the injured parties had previously reported sickness, now believed to have been caused by carbon monoxide poisoning.

Fire officer Alan Sherman, who attended the incident, said: “Faulty appliances can have extremely serious consequences as this incident shows.”

The moral of the story is to ENSURE THAT YOUR HEATING APPLIANCES ARE MAINTAINED!

The reported incident was domestic in nature but had the fault been with an extensive commercial or industrial boiler system – the kind used in hospitals, restaurants, police stations or hotels – the consequences would have been horribly severe. Rather than three people with carbon monoxide poisoning, there could have been hundreds… thousands even.

If you are the manager of a large heating system, make sure that boilers are maintained yearly; your local Commercial Boiler Service will do the job for you. And if you notice repeated incidences of unexplained illness or strange smells, do not hesitate to call the professionals. Rather safe than sorry!

For information on commercial and industrial boiler and plumbing services, feel free to contact the C H Systems team for more information on 0208 302 8149 or info@chsystems.cc

New combi boiler by Worcester

There is nothing worse than trying to fit a giant boiler into a miniscule space – especially if you’re relying on aesthetic appeal to sell a product or service, like a restaurant or hotel.

Commercial or industrial heating systems also have the penchant for hogging space, and thus encroach on employees’ ability to work efficiently. There’s nothing like moving around a restaurant kitchen whilst playing ‘dodge the boiler’ as you fry a cordon bleu steak.

With this in mind, Worcester has expanded its Greenstar range with the launch of a brand spanking new combi boiler.

Described as one of the smallest boilers on the market, Worcester’s Greenstar CDi Compact measures 690mm x 390mm x 280mm, and is available in outputs of 28kW, 32kW and 36kW. The boiler’s compact size means that there is greater scope for where it can be fitted – in the cupboard, behind the door (out of site out of mind!).

Of course it’s all good and well having a lovely boiler that fits the practical/aesthetic dimensions of a business but the real question is whether it will save money – is it energy-efficient? Worcester says it is!

The combi boiler aims to be high performance with low emissions, and also features a revolutionary ultra-compact heat exchanger, manufactured using cutting-edge technology adopted from the aerospace industry and the military. Said exchanger uses less than 1W of electricity when in standby mode; although that may seem like not such a big deal, the savings will accumulate over time.
It is recommended that the boiler be serviced on a yearly basis (to keep it in good working order) and there is even an optional setting ‘service reminder’ that will help you to remember to call the experts when maintenance is due.

Worcester is currently offering a great deal on the Greenstar CDi Compact; if you buy it before June 2013, it comes with a 5 year guarantee. Bonus!

If you own a small business and are interested in Worcester’s combi boiler, do not hesitate to contact the C H Systems team for more information on 0208 302 8149 or info@chsystems.cc