Over 90% of firms unaware of Enhanced Capital Allowance scheme

London - As many as 92% of businesses in the UK are currently unaware of the Government’s Enhanced Capital Allowance (ECA) scheme set up to aid investment in modern energy efficient technology, a YouGov survey involving 1,300 businesses across offices, retail and leisure has revealed. And, warns survey sponsor, Daikin this lack of awareness may be slowing the adoption rate by businesses in new technology that would help bring both significant energy efficiency savings and also lower operational costs.

“In the face of rising energy costs and the need to reduce carbon emissions, businesses are being forced to become more energy efficient,” said Mark Dyer, marketing manager for Daikin UK. “Yet it seems we could clearly be doing more to encourage investment in new energy saving technology by raising awareness of the ECA. It was certainly staggering to see that such a large percentage of businesses are still not aware of the financial support that is available through the ECA scheme.”

Daikin’s survey also highlighted modern heating and cooling technology as an important area where businesses could be failing to improve efficiency. Heating and cooling costs typically account for 30% of a building’s running costs, making this a prime area to achieve energy and cost savings.

Accordign to the company, 69% of those surveyed thought their company could be doing more to save energy and reduce costs, with 61% saying that investing in new heating and cooling technology could improve energy efficiency. However, 61% of respondents stated cost as barrier for investment in new technology, further underlining the importance of the accelerated tax relief available through the ECA.

The ECA was set-up in 2001 to encourage the investment in highly energy efficient technology. The scheme provides businesses with 100% first year tax relief on their capital expenditure on qualifying energy efficiency equipment. For example, if a business pays corporation tax at 28%, then every £1000 spent on qualifying new energy efficiency technology would reduce the tax bill by £280. The ECA sets qualification at the top 15-20% of products available, so qualifying heating and cooling technology has the highest efficiency ratings on the market.

“There needs to be far greater awareness of the ECA if we’re to encourage the uptake of new energy efficient technology,” added Dyer. “Combined heating and cooling systems are more energy efficient and cost effective than separate traditional systems such as gas boilers. Our systems are based on renewable heat pump technology, which takes heat from warm areas and redistributes it to cooler rooms and vice versa. Unlike fossil fuel systems, heat pumps extract available heat from the air rather than using energy to generate heat, making them highly energy efficient.

“In the current financial climate, some businesses may feel it is difficult to justify investment in new energy efficient technology. However, the tax relief available through the ECA and the whole life cost savings that this technology will generate means that the investment can be very cost effective. And with energy prices continuing to rise, investing in heating and cooling technology - based on renewable heat pump technology - could prove to be one of the best cost saving exercises.”