Small firms to see funds for big energy refit

The Carbon Trust will launch a new programme — the Big Business Refit — this September aimed at helping small and medium-sized businesses (SMEs) cut their energy costs by improving their efficiency.

The programme, which will provide both financial support and expert advice, could help businesses save as much as £40 million, according to the Carbon Trust.

The current recession has driven an increasing number of small and medium-sized businesses to the Carbon Trust for interest-free loans to pay for more energy-efficient equipment and energy-saving technology. Those improvements are helping the average business save £14,000 a year on energy bills, with a collective annual savings of nearly £6 million.

“Business owners are realising that for every month they ‘make do and mend’ with old inefficient equipment, they are wasting more cash on unnecessarily high energy bills,” said Tom Delay, chief executive of the Carbon Trust. “With credit all but dried up elsewhere, the Big Business Refit breaks the deadlock by helping SMEs to buy the equipment that will both slash their costs and often transform their businesses.”

Carbon Trust loans can be used for equipment replacements costing between £3,000 and £400,000.  The loans are designed to pay for themselves through direct energy savings, so once a loan is repaid, subsequent savings go straight to bottom line.  The Big Business Refit will offer a total of  £100 million in loans and is expected to help up to 3,000 UK SMEs.

The top choices among the small and medium-sized businesses that have taken a Carbon Trust loan in the first six months of 2009 are:

• New energy-efficient lighting and lighting controls;
• Replacement air compressors, used for powering pneumatic tools; and
• Mechanised materials handling equipment, such as cranes, which are used to load heavy equipment.

“Businesses which replace old equipment now will be in a far better position come the end of the recession,” Delay said. “Their cost base will be lower than their competitors and, with brand new equipment in place, they’ll be more efficient.”

For example, the Ipswich-based aluminium foundry, Hadleigh Castings Ltd, used a Carbon Trust loan to replace its largest air compressor at a cost of £30,000.  Installed at the end of 2008, the new compressor is on target to save the company over £11,000 every year on its energy bill and around 80 tonnes of CO2 a year.