Environmental & Financial Benefits

Reznor energy efficient heating systems – such as warm air heating, space heating and heat exchangers – offer a considerable number of environmental and financial benefits to users.

For both new build and refurbishment projects, Reznor can help customers to save energy and money with an efficient range of heating systems which deliver:

 

  • Lower running costs – up to 60% savings
  • Even low level heat coverage
  • Systems can be easily controlled – including varying zoned temperatures and operating times
  • Reduced heat losses

Attractive aesthetic integration

 

Climate Change Levy

Introduced in April 2001, the Climate Change Levy (CCL) is essentially a business tax on the use of energy sources that contribute to greenhouse gases and other polluting emissions.


A business tax on the use of energy sources.

1. Why impose a levy?

Following the recommendations in Lord Marshall's 1998 report on economic instruments and the business use of energy, the Government decided that a tax on energy would be an effective way of promoting reductions in its use.


2. Why restrict the use of energy?

Following the Kyoto Climate Change Conference, the UK Government entered into a legally binding commitment to reduce the UK's total greenhouse emissions by 12.5% below 1990 levels, by the period 2008 to 2012. A domestic goal of 20% reduction in Carbon Dioxide emissions by the year 2020 was also set.


The Government has undertaken a commitment to reduce greenhouse emissions. Only domestic and transport sectors are exempt from the tax.

3. How much is raised by the Climate Change Levy and how is it used?

It is estimated that approximately £1.0 billion per annum is raised. The tax is intended to be fiscally neutral, being recycled back to business by cutting employers National Insurance contributions (NIC) by 0.3% and funding energy efficiency initiatives.

All other sectors of the economy are required to pay a levy


4. What is the structure of the levy?

Levy on electricity 0.43 pence per kWh
Levy on natural gas*, coal 0.182 pence per kWh
Levy on LPG 0.07 pence per kWh

*The levy on natural gas does not apply in Northern Ireland.

Note : Oil, good quality CHP schemes and renewable energy resources are exempt from the levy

This represents a 20% increase on gas bills based on average fuel prices.


 This represents a 20% increase on gas bills based on average fuel prices.

5. What can the Reznor do to reduce the impact on business costs?
Help you prepare an energy audit and action plan which will identify various measures for reducing energy use.
Supply energy efficient products that provide 100% capital allowances in the first year under the Enhanced Capital Allowances scheme.

Clearly, businesses that are energy intensive and employ few people will see a net increase in energy costs.

Enhanced Capital Allowances

Enhanced Capital Allowances logo1. Why have Enhanced Capital Allowances been Introduced ?

To offer business an effective means of neutralising the impact of the Climate Change Levy (a business tax on the use of energy sources) introduced in 2001 with an incentive to adopt a more environmentally conscious approach when deploying energy resources.


2. What financial benefits are derived by claiming ECA’s?

  • 100% capital allowances in the first year, including the costs of installation.
  • Improved cash flow.
  • Taxation reduced in the first year.
  • Improved profit after tax.

3. Does warm air heating qualify for ECA’s?

Yes, as of August 2012 condensing warm air heating systems are included as long as they meet the necessary efficiency criteria, and have been independently verified by an approved body.


4. What is the inclusion threshold for warm air heating?

All units must have a minimum net thermal efficiency of 101%.


5. What impact will ECAs have on purchasing capital equipment?

Quite simply buying energy efficient systems will now cost less than standard efficiency options.

  Standard Efficiency Equipment High Efficiency Equipment
Capital cost
(inc installation)
£ 37,250
£ 44,000
Fuel costs £ 15,900
£ 14,700
Climate Change Levy £ 1,988
£ 1,838
Less Capital Allowance £ 2,800 £ 13,200*
TOTAL £52,338 £47,338

Notes
Fuel costs based on 1600 hrs per annum.
Fuel cost used for illustration 1.2p/kW.
Installation costs from actual data.
Based on Corporation Tax rate of 30%

* 100% capital allowance to be claimed in the first year including the costs of installation.


6. What Reznor products qualify for ECA? (subject to final verification by The Carbon Trust)

  • UESA
  • EnviroPak (SHH & RHH)

7. Where is more information available on CCL programmes and ECA’s?

Environment and Energy Helpline 0800 585794 www.actionenergy.org.uk