Case Study: interest free loans can help small firms cut bills
For small businesses, ploughing capital into energy efficiency can seem daunting, with lengthy payback periods making investment seem impossible.
The Carbon Trust explains how a loan taken out by Exmoor Forest Inn is helping to reduce its energy bill by thousands of pounds.
Exmoor Forest Inn is a pub and hotel based in the heart of Exmoor, Devon. Employing nine members of staff, the inn, which has nine guest bedrooms, is open all year round.
Concerned about the efficiency of their boiler system, which was more than 30 years old and fitted with an inefficient cast iron heat exchanger, Exmoor Forest Inn decided to replace its existing boilers with three new LPG-fired condensing versions that were more efficient.
The company contacted the Carbon Trust to apply for an interest-free energy-efficiency loan to help cover costs.
Exmoor Forest Inn was awarded £6,299 to cover the total cost of the new boilers. As a result of installing the more efficient boilers, the Carbon Trust estimated that Exmoor Forest Inn would reduce its energy expenditure by approximately £2,690 per year.
Based simply on the money saved on energy costs, the Carbon Trust loan would pay for itself in just under three years and all further savings will go back into the company.
Barry Kift of the Exmoor Forest Inn said: “Improving the efficiency of our heating system has not only helped to reduce heating waste but has cut our carbon emissions and saved us money. Without the Carbon Trust we would not have been able to install the new boilers and we were grateful for the straightforward application procedure and the swift decision making.”
The Carbon Trust helps businesses save money and cut carbon emissions through energy efficiency.
Small or medium-sized enterprises (SMEs) in England and Scotland and all businesses in Wales or Northern Ireland that have been trading for at least 12 months, can apply for a loan towards the cost of purchasing energy efficient equipment.
Drawing from a £26 million fund, loans of between £5,000 and £100,000 are available to successful applicants in England, Scotland and Wales.
Loans of up to £400,000 are available in Northern Ireland.
The loan is unsecured, interest free and repayable over a period of up to four years. There are no arrangement fees and application is straightforward.
Upgrading to energy efficient equipment, even with a modest investment, can save a company over 20% on energy bills.
In many cases, the amount of money saved each month will exceed the loan repayments thereby increasing company profits by hundreds, or thousands, of pounds each year throughout the payback period. Thereafter, the full value of the saving contributes to the bottom line.
To find out more about Energy Efficiency Loans scheme, call the Advice Line on 0800 085 2005 or visit the Carbon Trust website
© Faversham House Ltd 2023 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.