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Demand grows for high efficiency HVAC kit

Suppliers that can provide a financing solution alongside their products will find themselves in a more competitive position because of customers' increasing expectation of a complete turnkey solution, according to Myles McCarthy
The market for energy efficient heating and ventilation equipment is on the rise. This is being driven by concerns over increasing energy costs, a growing culture of sustainability in both public and private organisations, and the need to comply with energy legislation. Technologies such as active solar thermal, combined heat and power, heat pumps and thermal storage are becoming increasingly popular options for delivering efficiency savings.

In many sectors heating, ventilation and air conditioning accounts for the majority of an organisation's energy spend on its estate. Investing in changes to these systems can both significantly improve the working environment and slash energy costs. Our statistics show that heating, hot water, cooling and ventilation represents close to 60 per cent of total carbon emissions from energy use in public and commercial buildings.

A critical part of the process involves the organisation clarifying its commercial needs and identifying the opportunities to make savings, in order to ensure that the right technologies are selected for investment. For example, 'comfort cooling' from traditional air conditioning can often be very energy expensive and yet may not be essential to an organisation's commercial needs. Whereas in the right circumstances, low energy alternatives to traditional air conditioning, such as evaporative cooling systems, can cut energy consumption by up to three quarters.

Carbon Trust Implementation Services offer independent expert advice for businesses to help them decide where to effectively focus their energy efficient equipment and technologies investments, as well as providing access to a trusted pool of accredited suppliers to deliver savings through implementing new equipment.

Encouraging energy efficiency
Non-domestic buildings account for 18 per cent of the UK's total carbon emissions. Building regulations, as well as various government initiatives such as the Renewable Heat Incentive and Enhanced Capital Allowance, are being put in place to help encourage the implementation of energy efficient HVAC as a major part of making buildings more sustainable.

However, access to available financing still remains a major hurdle for business owners contemplating investment in such technologies. According to the latest Bank of England report, the annual rate of growth in the stock of lending to UK businesses was negative and the stock of lending to SMEs continued to contract in the first quarter of 2012. To help companies raise finance for energy efficiency investments, the Carbon Trust and Siemens Financial Services Ltd (SFS) have combined forces and launched the Energy Efficiency Financing scheme (EEF). Recognising the key role played by HVAC in contributing to carbon emissions targets, the EEF scheme is helping the sector seize the opportunities presented by energy-efficient products and services.

The flexible terms of the EEF scheme enable business customers to benefit from affordable monthly finance payments, which are structured in a way that the consequent energy savings resulting from the new installation can be offset against the cost of the equipment, essentially meaning that the equipment pays for itself.

The material energy efficiencies typical of HVAC installations can also mean that many business customers using the EEF scheme are cash positive or cash neutral from the very beginning of the payment term. This way not only is their cash flow protected, they can also benefit from increased efficiencies resulting from their investment right away.

For HVAC suppliers, integrating the scheme into their overall sales propositions allows them to close more deals. By removing customers' budget concerns, suppliers can focus their efforts on providing the best solution for the customers' needs and achieving the desired energy savings.

Going hand-in-hand with the EEF scheme, the Carbon Trust's programme to accredit suppliers independently helps to recognise leading supply companies with the quality and skill to help UK businesses reduce their energy costs by installing greener, more efficient technology. Suppliers of energy saving equipment in HVAC, among others, are invited to apply for accreditation under the Carbon Trust's scheme, giving them use of the Carbon Trust Accredited Supplier marque in their marketing, and the opportunity to bid for pre-screened tenders with companies ready to invest in energy-efficient and renewable solutions for their organisations.

£9 billion of investment needed
The Carbon Trust estimates that UK companies require £9 billion of investment in energy-efficient equipment in order to replace old, inefficient systems with modern, low-energy, cost-saving alternatives. More efficient HVAC will play an essential role in helping to meet the UK's binding carbon targets.

Businesses looking at investing in high efficiency HVAC equipment may need more than just expert advice about the running and maintenance of the technology. Suppliers who are capable of providing a financing solution, such as the EEF, alongside their products will undoubtedly find themselves in a more competitive position because of customers' increasing expectation of a complete turnkey solution.

For more information, please visit www.energyefficiencyfinancing.co.uk or call us on 01753 434476.

//The author is managing director of Carbon Trust Implementation Services //
10 September 2012

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