Skip to main content

CO2 Tax will Double UK Electricity Bills

By 31st October 2012No Comments

This recent article in the Daily Telegraph makes for interesting, if a little worrying, reading:

So what can businesses do about it?  The answer is: a lot.

Most businesses continue to fail to manage their energy effectively. What do we mean by energy management? It is not only procuring energy at the best price (most businesses still fail to switch provider each year), but also taking steps to reduce consumption as well as self-generation (e.g. through solar PV).  The latter has recently become less attractive due to a fall in subsidies, but in any case is not suitable for all businesses.  However, reducing consumption is something that all businesses can take steps to improve.

So what steps can you take to reduce consumption?  One option to consider is LED lighting.  It’s pretty clear that perception needs to catch up with reality in this area.  Unfortunately, there seems to be a widely held perception that LED lighting gives poor quality light.  Not any more.  The technology has come on leaps and bounds, with the quality of lighting now equalling, if not bettering, traditional lighting.  What’s more, the cost of maintenance is much reduced as the new generation of LED lights last far longer and therefore requires replacement far less often.

Then there are the tax benefits of re-lamping with LED.  The thing to check is that the products you are considering are eligible for Enhanced Capital Allowances.  The Enhanced Capital Allowance (ECA) scheme enables businesses to claim a 100% first year capital allowance on investments in certain energy-saving equipment, against the taxable profits of the period of investment.  A wide variety of LED lighting units are available in a range of designs with different performance levels, but the ECA Scheme aims to encourage the purchase of higher efficiency products. Beware – not all LED’s are eligible.

Eligible expenditure can include not only the actual costs of buying the equipment, but also other direct costs such as the transport of the equipment to site, and some of the direct costs of installation.

Additional benefits of purchasing ECA qualifying energy-efficient technologies could also include: improved cash flow, lower energy bills, reduction in Climate Change Levy or CRC payments.

Maybe this latest revelation will spur more businesses into action to become more energy-efficient.