The costs of renewables
While it is all very well to profess that your love of the environment is your reason for moving to renewable forms of energy, the actual cost-effectiveness of such a move is of utmost importance to any business. While it may improve your image, that is little compensation if it doesn’t also improve your profit margin. Thankfully, when it comes to renewable energy, the benefits extend far beyond the improvement in air quality. Of course, this all hinges on getting the right type of financing which is flexible enough to allow you to create this profit.
There are a number of reasons why using renewable forms of energy are important for your business;
- The ever increasing costs of mainstream energy and the uncertainty associated with those costs can be enough incentive for any business. But the actual savings can be huge once the initial investment has been made.
- Going green will improve your corporate image and could help you to gain more customers.
- Improving your recycling and fuel efficiency will lead to direct savings in these areas. For example, using your waste to create energy with an anaerobic digester could mean a two-fold saving. The costs of sending items to landfill or for recycling and the income generated from the energy.
- Some renewable energy is subject to a feed-in-tariff and this could lead to substantial payback on your investment. Solar panels are thought to make around 6% per year.
- There are tax benefits to be gained from making money from your renewable energy. This includes subsidies, rebates, tax credits and reductions in VAT.
- Businesses and industries which produce high levels of carbon are to be subject to a carbon tax in an effort to encourage the use of alternative methods of energy. Businesses which can show they have made changes will be exempt from the Climate Change Levy.
It is clear that going green could be worthwhile for your business, however it is that initial investment which can be the hard part. Getting finance from banks is not always feasible, and alternatives are often sought.
Asset finance is the perfect way to bridge this gap – allowing you to either pay off the item over time or to lease it. You will have the benefit of the income and savings generated, while also having the flexibility and positive tax implications of this type of finance.
The Green Investment bank is also one of the main ways to raise finance for green investments. With funding supplied by the government and privately, there is now a clear path towards getting that finance you need and one where green projects are specifically catered for.