Engineers must not snub government support
08 January 2010
Interest-free loans for new variable speed drive installations could be withdrawn by the Carbon Trust if there is not an immediate increase in their take up, says Andy Parker-Bates of Parker SSD Drives. In this first PSB email newsletter of 2010, Andy urges companies to participate in the scheme and reap the benefits.
Systems Integrators and equipment suppliers could use interest-free government loans to improve their market competitiveness. But they must act decisively as there is a danger the scheme could be withdrawn if there is a lack of take up. The Carbon Trust has a pot of £100m earmarked for drive and other energy saving equipment loans. But industry has been slow to embrace the scheme and there is increasing concern the money could be diverted elsewhere.
The idea was developed along the lines of President Obama’s American Recovery Fund. The government would simultaneously encourage the take up of energy saving technologies and support investment in industry. This would have the short-term benefit of maintaining employment and economic activity through the recession, and long term would help reduce carbon emissions while building green expertise for the future.
“In these hard economic times and with a general election looming, the government needs to be seen to be supporting industry – and promoting energy efficiency,” says Andy (pictured below). “If the current scheme is not working well and applications do not increase markedly in the opening months of 2010, funding for future years may well be scaled back, put into other schemes or scrapped altogether as demands to balance the public purse increase.”
The underlying principle of the scheme is that the drive or other equipment is effectively free of charge, its cost being paid for out of savings in the energy bill. It was assumed that panel builders would quickly become champions of the scheme and promote it to their customers, as it would effectively reduce the purchase price.
“It’s a great idea and it would be irresponsible to lose it, which may happen unless industry starts to back it more readily before the end of this financial year.”
It’s simple to apply for online - click here for more information. It is also flexible so that it is available for many installations.
Any project of any size is eligible to apply, provided it can demonstrate energy savings. For every 1.5 tonnes of CO2 saved by the installation of new equipment, £1,000 can be borrowed, with repayment scheduled over a period of up to four years. The value of the loan is £3,000 minimum and can be up to £500,000 for large scale projects. Andy again:
“The majority of drives will pay for themselves in under 18 months, usually in less than a year. Most installations run for at least five years, with many still going after ten or more. So they are always a good investment and the loan scheme means there isn’t even an initial outlay to recoup.”
In previous recessions manufacturing and engineering have often been treated as poor relations of the glamorous media, telecoms and computer companies, the employment-intensive retail and services sectors, the supposedly-bulletproof finance houses and banks. But this time around industry is being hailed as the potential saviour, as it should provide stable, long-term jobs, export revenues and reliable employment. Also it should be in a position to develop new green technologies and win large slices of the emerging environmental market.
“Drive and control panel building is pretty much in the front line of this new industrial advance,” says Andy. “It may not be the stuff of Hollywood blockbusters, but every time a panel builder saves a few tonnes of carbon, it’s a small but significant step towards a sustainable planet.”
Significantly, the loans are unsecured as well as interest free. There are no arrangement fees and the application process is straightforward, starting with a few mouse clicks on the Carbon Trust’s website. What’s more, many equipment suppliers can complete the loan application on their customer’s behalf, simplifying the process still further. Loan repayment periods are determined by the energy-savings achieved up to a maximum four-year period and as the scheme is designed for energy savings to cover repayments, the loan will effectively pay for itself.
“Old equipment can adversely affect a company’s competitiveness, particularly in the international arena. Upgrading plant and machinery ahead of the expected recovery in trade is vital for effective growth,” says Andy, “and it will put you ahead of the curve on pending environmental legislation too.”
The scheme is open to small and medium sized companies that have been operating for at least 12 months in England and Scotland, and to all businesses in Wales and Northern Ireland. It is available for drives and other energy saving equipment such as motors and control systems; it can also apply to plant such as refrigeration, compressors and conveyor systems. And it is not just for manufacturing and production plant; drives fitted to, say, building controls and air conditioning systems also qualify, as do insulation, heat recovery and solar systems.
Andy sums up: “There are very few UK engineers who can remember when a government last went out of its way to openly support industry. It would be a shame if this loan scheme failed and turned future governments away from manufacturing for another 25 years.”
I’m grateful to Andy for providing this timely reminder. If you think your projects qualify and you have identified areas where you may be able to offer energy-saving opportunities for your clients and customers, then act now before this offer from the Carbon Trust dries up altogether.
Les Hunt
Editor
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