#celive #seuk @CleanEnergyLive cleanenergylive.co.uk

4-6 October 2016 The NEC, Birmingham, UK

#celive #seuk @CleanEnergyLive cleanenergylive.co.uk

Jason J Hunter

Energy Efficiency Division

Agenda

• About Capitas Finance

• Drivers for clean energy solutions

• Drivers for financing clean energy

• Finance and funding options

• Government assistance

• Backed by some of the largest UK and European banks

• ICT, renewables, vehicles, plant, clean technology

• Funding for private and public sector

• Experts in energy efficient product funding

• Over 150 Years experience

• Dedicated team

About Capitas Finance

• Because it is the right thing to do

• Because energy costs have doubled in 10 years

• Guaranteed to double again in the next 10

• Legal requirements

• Corporate Social Responsibility

• Customer and consumer demands

Drivers for clean energy solutions

Cost of energy?

Because it’s the right thing to do

Acquisition process

• Introductory meeting

• High level audit (over telephone/email)

• Presentation or energy blueprint for the business, what achieved

• Engineering study (IGA)

• Fully costed and planned energy efficiency solution

• But what happens next?

Typical payback profile

• Project costs are heaviest at the front-end

• Benefits do not fully accrue until the project is implemented

co

st

timescale

COST SAVINGS

Why finance?

• Cost / savings matching is a major reason for financing projects

• Financing enables the costs and savings to track much more closely

co

st

timescale

COST SAVINGS

FINANCING

Why customers want to finance projects?

• Customers can turn the capital cost of energy efficiency equipment into an

operating expense

• Businesses pay for their utilities from operating budgets, so why not energy

efficiency projects from the same budget?

• Capital costs can be turned into low, monthly payments, and reduce or even

eliminate upfront costs

• Customers get the solution they need now – rather than the one their budget

dictates

• Improved cash flow & ROI

Financed Option

• Example clean energy technology project

2016 2017 2018 2019 2020

Savings £729,517 £765,993 £804,292 £844,507 £886,732

Financing Cost -£402,735 -£402,735 -£402,735 -£402,735 -£402,735

Net savings £326,781 £363,257 £401,557 £441,772 £483,997

2021 onwards

Full savings p.a. £931,068

Finance can be complicated or simple

• The hard way: You learn all about finance?

• Operating or Finance Lease, Hire Purchase, Energy Services

Agreement, Cash, Bank Facility, Secured or Unsecured,

• UK GAAP, IFRS, US GAAP, IAS, ESA (V1) or (V2)?

• On balance sheet, or off balance sheet

OR – carry on doing what you do best and let Capitas Finance

provide the funding solution

Equipment and technologies

• Air to air recovery – heating and cooling

• Automatic monitoring and targeting (AMT)

• Boiler equipment

• Combined heat and power

• Compressed air equipment

• Heat pumps

Equipment and technologies

• Heating, ventilation, and air conditioning systems (HVAC)

• Motors, engines and drives

• Lighting (not just LED lighting)

• Pipe work insulation

• Refrigeration equipment

• Solar thermal systems

Equipment and technologies

• Uninterruptable power supplies, battery, flywheel

• Warm air and radiant heating

• Waste heat to electricity conversion equipment

• Energy from waste solutions

• Complete office fit out

• And much much more.

Government assistance • Energy Technology List

DECC, BEIS, Carbon Trust

• Energy Savings Opportunity Scheme

EU Energy Efficiency Directive (2012/27/EU), ESOS Regs 2014

• Enhanced Capital Allowances

DECC, BEIS, Carbon Trust

• Green Business Fund

Energy Company Obligation, SMEs, Carbon Trust

• Still a funding gap of over 65%

Back to basics: why “Finance”?

• Finance fills the funding gap

• Finance can accelerate projects by minimising up-front payments

• Finance overcomes budgetary objections

• Finance better aligns project costs outlays with anticipated benefits

• Conflicting issues of restricted budgets and high business demand

Enhanced Capital Allowances

On a £100,000 spend

1 2 3 4 5 6 7 8 9 10 total

Traditional 18,000 14,760 12,103 9,925 8,138 6,673 5,472 4,487 3,679 3,017 86,255

Tax benefit 3,600 2,952 2,421 1,985 1,628 1,335 1,094 897 736 603 17,251

With Capitas Finance Year 1

Enhanced Capital Allowances £100,000

Year One Tax benefit £20,000

Contact details

Capitas Finance Ltd

Aissela, 46 High Street, Esher, Surrey, KT10 9QY

Jason J Hunter

Associate Director – Energy Efficiency Division

mobile: +44 (0)7948 316 554

switchboard: +44 (0)845 458 7555

email: jjh@capitasfinance.com

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Experts in Technology Finance ...

www.capitasfinance.com

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Financial Summary of recommendations

Electricity consumers % of Energy Consumed kWh Energy Cost

Annual Energy Saving Capital Cost Payback

Refrigeration 35.4% 6,311,200 £517,518 £103,503 £269,109

Air compressors 5.9% 1,056,000 £86,592

Pumps 2.4% 436,000 £35,752 £8,938 £18,769

AC 1.0% 178,750 £14,658

Lighting 4.9% 878,510 £72,038 £10,805 £29,175

AHU’s/Fans 6.1% 1,080,280 £88,583 £26,574 £66,437

Production equipment 5.0% 890,050 £72,984

Office/canteen, electrical 0.8% 150,000 £12,300

Miscellaneous electrical 3.2% 573,780 £47,050

Gas consumers

Steam Boilers 25.6% 17,000,000 £374,000 £294,416 £736,041

Production ovens 9.5% 6,340,000 £139,480

Canteen gas 0.03% 20,000 £440

Water £296,349 £148,174 £251,896

Effluent £262,651 £21,900 £52,560

Totals 100.0% 34,914,570 £2,020,395 £729,517 £1,694,912 2.32

Energy Saving % 36%