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| Environmental & financial
benefits |
Nordair
Niche
energy efficient heating systems offer a considerable
number of benefits to end user customers. These
include:
 |
Reduced
running costs – savings
of up to 60% can be achieved |
|
Even
heat coverage at low level |
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Controllability – systems
can be easily controlled to provide
varying zoned temperatures and
operating times |
|
Minimal
heat losses through the roof
of the building |
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Good
aesthetic integration within
the building |
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Enhanced Capital Allowances
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1. Why have Enhanced
Capital Allowances been Introduced ? |
| To offer businesses an effective means of neutralising
the impact of the Climate Change Levy (a business
tax on the use of energy sources) introduced in
2001 with an incentive to adopt a more environmentally
conscious approach when deploying energy resources. |
| |
2. What
financial benefits are derived by claiming ECA’s?
|
100%
capital allowances in the first
year, including the costs of
installation |
|
Improved
cash flow |
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Taxation
reduced in the first year |
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Improved
profit after tax |
|
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| 3. Does
warm air and radiant space heating qualify for
ECAs? |
| Yes, from August 2002 high efficiency
radiant and warm air heating systems are included
as long as they meet the necessary efficiency criteria,
and have been independently verified by an approved
body. |
| |
| 4. What
is the inclusion threshold for radiant heating? |
|
Individually flued
(or unflued) systems that achieve a net thermal
efficiency of 86% |
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Radiant efficiency of 60% |
|
Multiburner or continuous
systems that achieve a net thermal efficiency
of 90% |
|
| |
| 5. What
is the inclusion threshold for warm air heating? |
| All units must have a minimum net
thermal efficiency of 89% |
| |
| 6. What
impact will ECAs have on purchasing capital equipment? |
Quite simply buying energy efficient
systems will now cost less than standard efficiency
options.
| |
Standard
Efficiency Equipment |
High Efficiency
Equipment |
Capital cost
(inc. installation) |
£ 37,250
|
£ 44,000 |
| Fuel costs |
£ 15,900
|
£ 14,700 |
| Climate Change Levy |
£ 1,988
|
£ 1,838 |
| Less Capital
Allowance |
£ 2,800 |
£ 13,200* |
| TOTAL |
£52,338 |
£47,338 |
Notes
Fuel costs based on 1600 hrs per annum.
Fuel cost used for illustration 1.2p/kW.
Installation costs from actual data.
Based on Corporation Tax rate of 30%
* 100% capital allowance to be claimed in the first year including
the costs of installation. |
| |
| 7. What
Nordair Niche products qualify for ECA? (subject to
final verification by The Carbon Trust) |
|
DF 80/20 |
|
DF |
|
IDF |
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MUA/VAV |
|
RM |
|
| |
| 8. Where
is more information available on CCL programmes
and ECAs? |
| Environment and Energy Helpline
0800 585794 www.actionenergy.org.uk |
|
| Climate
change levy |
| Introduced in April
2001, the Climate Change Levy (CCL) is essentially
a business tax on the use of energy sources that
contribute to greenhouse gases and other polluting
emissions. |
| |
| 1. Why impose a levy? |
| Following the recommendations in Lord Marshall's
1998 report on economic instruments and the business
use of energy, the Government decided that a tax
on energy would be an effective way of promoting
reductions in its use. |
| |
| 2. Why restrict the
use of energy? |
| Following the Kyoto Climate Change Conference,
the UK Government entered into a legally binding
commitment to reduce the UK's total greenhouse
emissions by 12.5% below 1990 levels, by the period
2008 to 2012. A domestic goal of 20% reduction
in Carbon Dioxide emissions by the year 2020 was
also set. |
| |
| The Government has
undertaken a commitment to reduce greenhouse emissions.
Only domestic and transport sectors are exempt
from the tax. |
| |
| 3. How much is raised
by the Climate Change Levy and how is it used? |
It is estimated that approximately £1.0
billion per annum is raised.
The tax is intended to be fiscally neutral, being recycled back to
business by cutting employers' National Insurance contributions (NIC)
by 0.3% and funding energy efficiency initiatives. |
| |
| All other sectors of
the economy are required to pay a levy |
| |
| 4. What is the structure
of the levy? |
Levy on electricity: 0.43 pence per kWh
Levy on natural gas*and coal: 0.15 pence per kWh
Levy on LPG: 0.07 pence per kWh
*The levy on natural gas does not apply in Northern Ireland.
Note : Oil, good quality CHP schemes and renewable energy resources
are exempt from the levy |
| |
| This represents a 20% increase on gas bills
based on average fuel prices. |
| |
| 5. What can the Nordair Niche
Group do to reduce the impact on business costs? |
Help you prepare an energy audit and action
plan which will identify various measures for reducing
energy use.
Supply energy efficient products that provide 100% capital allowances
in the first year under the Enhanced Capital Allowances scheme. |
| |
| Clearly, businesses
that are energy intensive and employ few people
will see a net increase in energy costs. |
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