Financing Energy Efficiency

Using energy-saving equipment will help reduce your energy bills, saving your business considerable sums of money in the long term.

Claiming The Enhanced Capital Allowance (ECA) tax relief will save your business even more money – improving your cashflow for the year that you invest in the new equipment. And using the equipment itself will help reduce the impact your business has on the environment.

The ECA energy scheme provides tax allowances for energy saving products. The scheme offers a 100 per cent first-year allowance for investments in certain energy saving plant and machinery. If you buy equipment that qualifies, you can write off – ie deduct – 100 per cent of the cost against that year’s taxable profits. This could save you a lot of money, as well as reduce your business’ energy use, carbon footprint and climate change levy payments.

The ECA energy scheme supports a variety of energy saving technologies – such as energy efficient boilers, lighting, refrigeration equipment, and metering and monitoring systems. This guide explains how the scheme works, what energy saving products qualify, and how to claim an allowance.

ECAs bring forward tax relief, so that you can set it against profits from a period earlier than would otherwise be the case.

Only new equipment is eligible for an ECA – used or second-hand equipment does not qualify.The criteria are reviewed annually to keep pace with technological progress.

Eligible equipments for tax relief are published in the Energy Technology List (ETL).

Key information for Purchasers: ETL factsheet

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