How to integrate the EDR grant into Energy Management to maximise savings
The best way to make the most of the new government EDR grant scheme is to integrate it into your wider energy management strategy. This is because The EDR only applies to certain energy efficiency technologies and for a specific time period during the winter of 2017 or 2018. A grant that does not have to be repaid is undoubtedly an attractive opportunity but if it is integrated into other aspects of your energy management then it could have an even greater impact on your overall savings.
A successful energy management project uses technologies that deliver long-term savings. The strategy ensures these savings continue. A successful energy management project also takes a holistic view of your energy profile and calculates the best way to integrate a variety of solutions in order to optimise cost versus savings.
Solutions may include energy efficiency technologies like those eligible for EDR but it may also include technologies like advanced monitoring hardware, demand side response and on-site renewable energy generation. Other non-technology solutions like energy procurement, reporting and stakeholder engagement may also form part of your energy management project so you can see the EDR really only applies to a small section of your wider strategy.
Many organisations struggle to integrate the different aspects of a successful energy management project, which is why we have devised a unique energy management solution that is centralised around an advanced web-based monitoring platform. This enables us to provide a detailed breakdown of an organisation’s energy profile and forecast the effects of different solutions to make suitable recommendations. Once in place, the software is again used to analyse and validate savings to ensure the strategy is working as expected.
How can EDR be used to supplement other funding options?
Lack of capital is the most common barrier to implementing an energy reduction strategy. The good news is Financial Services Providers now recognise energy technologies as worthwhile investments that are tried and tested and proven to generate good returns.
Today there are numerous finance options for an organisation looking to fund an energy project. Using a combination of the EDR grant and finance enables an organisation to install energy efficiency measures with no upfront cost that will be cash positive through the savings from the year one.
For example, if a proposed energy efficiency project had a cost of £1,300,000 and the client received EDR funding of £150,000, this would bring the required loan amount down to £1,150,000. If we took a 5 year loan at 5% interest then the annual loan repayment would be £267,260 per year. The savings made by implementing the energy efficiency project amount to £272,240 in the first year alone, which means the project is £4,980 cash positive in Year 1. The annual savings increase as energy prices rise and after 5 years the loan is repaid and the remaining total savings amount to £109,059.13.