Tax & Accounting News

Energy-Saving Loans Are Cut

12/07/2010

The maximum loan on offer from the Carbon Trust to businesses introducing energy-saving measures has been cut from £500,000 to £100,000, after strong demand for the scheme.

The cap was only increased in February, but with a finite amount of money available, the Carbon Trust has decided to focus its efforts on making more, smaller loans.

The organisation has also raised the criteria for the amount of energy each approved scheme must save, from 1.5 tonnes of carbon dioxide (CO2) per £1,000 loaned to two tonnes.

The loans remain on an unsecured basis for a maximum term of four years, with the repayment costs calculated so they are largely offset by the saving in energy bills.

The scheme is focused on small and medium-sized organisations employing the equivalent of up to 250 full-time employees and may include charities and voluntary organisations as well as companies. The business or organisation concerned must also have been trading for at least 12 months.

Larger companies and organisations may also take part in the scheme if they do not qualify to take part in the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. However, EU rules on state aid exclude companies in the agricultural, fisheries, horticultural and transport sectors, as well as firms involved in export-related activities.

Despite the changes, the scheme remains an effective method for businesses to modernise their premises and replace inefficient equipment. For more information or advice, please contact us.