18 Sep The Enigma of Energy Credits
Energy credits. Carbon credits. Lighting grants. SEAI contributions. Energy efficiency tax incentives. Accelerated Capital Allowance (ACA)….SO MUCH NOISE!!!
There is a lot of chatter about this everyday among lighting contractors, wholesalers, vendors with End Users usually being promised different things and no-one actually understanding exactly what they are getting or how it happens.
Our mission on this blog is to be totally transparent (sadly uncommon!) and succinct by way of our explanation.
- Utilities are legally bound by the SEAI’s Energy Efficiency Obligation Scheme (EEOS), which basically means there are energy credits (money) available to commercial building owners, tenants, SME’s etc. to have some of the LED upgrade costs covered.
- Energy Credits are calculated depending on the wattage drop over the first year after the LED project is completed. For example, if pre and post project your annual lighting usage drops by 50,000 kW/h, you will be entitled to a once off payment (it differs but most likely around €0.05c per kw/h, so €2,500).
- It is unlikely to swing a project either way and may account for ~5% of the total cost.
- The contribution is generally paid to the contractor (much easier for the End User vs. months of hassle and paperwork to make the claim) but ECI would strongly encourage End Users to seek a copy of the remittance from whichever utility the contractor works with to see exactly what was paid over. There is too much smoke and mirrors, and fraud within the system so we will try and lead the way to stamp that out by being totally open, transparent and accountable. It is your money and you should know exactly what is happening with it.
- You can find more information here if you want to dig further (or call us and we can discuss in more detail) https://www.seai.ie/energy-in-business/energy-efficiency-obligation-scheme/
- ECI’s obligated party and energy credit partner is Enprova / Retrofit Energy Ireland (REIL) but we can and do transact with the other EEOS listed parties.
The Accelerated Capital Allowance (ACA) Scheme is somewhat different. This applies when a company has paid for the entire LED project upfront (traditional Capex model). The ACA Scheme will allow commercial customers to write down the entire cost of the equipment in the financial year of purchase (vs. the standard 12.5% write-down p/a for 8 years). More information can be found at https://www.seai.ie/energy-in-business/accelerated-capital-allowance/
From time to time, the SEAI announce other lighting or energy efficiency measures and incentives, so we keep up to date with these and facilitate clients in whatever way we can.
For a fully funded, no upfront Capex LED project, ECI have a Lighting as a Service fund to help clients upgrade their commercial premises at no upfront cost to them. Read more about our €25M funding agreement at https://www.ecilighting.ie/2018/06/25/new-lighting-as-a-service-division-features-in-the-irish-times-business-section/