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What Is Energy Efficiency Funding?
Energy efficiency grants can help businesses who want to carry out improvements at residential or commercial sites that specifically reduce the carbon footprint and energy usage whilst carrying out day to day activities. As a general rule there are also a few loans available, particularly from local authorities to make energy efficiency improvements to housing, sometimes at an interest free rate.
An energy efficiency funding injection can help businesses carry out their carbon reduction and sustainability activities faster or undertake larger projects than if they were relying on their existing financial resources. More often than not these energy efficiency grants and loans come from a Government source or from local authorities.
On the residential side of things, funding providers have an interest in getting older, less well insulated housing owned by landlords up to a higher energy performance rating on the EPC certificates as well as encouraging property developers to invest in the latest energy efficiency measures for new builds.
For commercial premises and operations, funding providers have an interest in taking steps to encourage businesses to make their workplaces more energy efficient, as well as their fleet of vehicles, reduce overall carbon usage in terms of day to day running of business and introduce the latest innovative cleantech trends.
Who Are the Main Funding Providers?
For localised and regional funding, local authorities make up the bulk of grant providers for energy efficiency activity where they can identify specific needs within their communities, including providing incentives for improving the local green credentials of commercial activity both at workplaces and on the roads and improving the overall energy performance of local housing stock offered by landlords or new builds from developers, to help reduce energy bills.
In terms of national funding, the UK Government (several departments are involved, including the Environment Agency, DEFRA, Department for Business, Energy and Industrial Strategy, Driver and Vehicle Licensing Agency and Office for Zero Emission Vehicles), Welsh Government, Scottish Government and Power Northern Ireland all have energy efficiency schemes for their respective countries or for UK wide coverage.
What Do You Get The Funds For?
Businesses may seek grants or loans to pay towards a range of different energy efficiency activities, which are briefly outlined below.
- Heating, Ventilation and Cooling Equipment (HVAC): Get funding to upgrade or purchase energy-efficient HVAC systems, including boilers, furnaces, air conditioners, ventilation systems, and heat pumps. This aims to reduce energy consumption, improve building comfort, and potentially access renewable energy sources.
- Lighting: Get funding to replace outdated lighting with energy-efficient LED technologies or implement smart lighting controls. This reduces energy consumption, improves building illumination, and creates a more sustainable environment.
- Insulation: Get funding to install insulation in walls, roofs, and floors to reduce heat loss or gain in buildings. This improves thermal comfort, saves energy costs, and contributes to climate change mitigation.
- Renewable Energy: Get funding to install and integrate renewable energy technologies such as solar panels, wind turbines, or geothermal systems. This allows buildings to generate their own clean energy, reduce dependence on fossil fuels, and contribute to energy independence.
- Boiler Equipment: Get funding to upgrade or replace outdated boilers with high-efficiency models or alternative heating technologies like heat pumps. This improves energy efficiency, reduces emissions, and potentially access renewable energy sources for heating.
- Water Efficiency: Get funding to implement water-saving measures like low-flow faucets, toilets, showers, and irrigation systems. This reduces water consumption, lowers utility bills, and promotes sustainable water management.
- Electric Vehicles: Get funding to purchase electric vehicles for organisational use, install charging infrastructure, and promote employee adoption of electric vehicles. This reduces transportation emissions, promotes sustainable mobility, and potentially access green energy tariffs.
- Refrigeration Equipment: Get funding to upgrade or replace outdated refrigeration equipment with energy-efficient models. This reduces energy consumption, maintains optimal food storage conditions, and contributes to reducing greenhouse gas emissions.
What Grants Are On Offer?
Here are some examples of the current funding types available:
- Clean Air Zone Grants – these are grants provided to vehicle users that operate within certain clean air zones around the UK in order for them to upgrade older less environmentally friendly emissions producing vehicles that may face charges for entering a “clean air zone”. This might include the purchase of electric vehicles, including taxis and vans. *There are currently seven cities charging under clean air zones in England: Bath, Birmingham, Bradford, Bristol, Portsmouth, Sheffield, and Tyneside (Newcastle and Gateshead), as well as the ULEZ zone in London. Scotland is currently implementing ULEZ zones in Aberdeen, Dundee, Edinburgh, and Glasgow. There are currently no low emission zones in Wales or Northern Ireland.
- Business Energy Efficiency Grants – Schemes to improve the energy efficiency of business operations and reduce carbon emissions by purchasing equipment and materials and the latest innovative clean technology. This can include heating and cooling, refrigeration and lighting installation.
- Farming Efficiency Grants – Funding that encourages business activities in rural areas to become less carbon intensive, improve resource efficiency and reduce water waste, as well as implement the latest innovative green agricultural equipment.
- Home Upgrade Grants – These are schemes that can benefit landlords by providing funding to make improvements to their housing stock, such as increase insulation, install new boilers, add solar panels or heat pumps in order to improve the energy performance of a home.
- Low Carbon Innovation Grants – Schemes that allow businesses to test prototypes and put in new measures to change their commercial working practices using innovative measures to push their operations towards increased sustainability, carbon reduction and a net zero model.
- Electric Vehicle Chargepoint Grants – Schemes for either landlords to install chargepoints for the use of electric vehicles at their properties or a whole electric charging infrastructure at a business premises to support a commercial electric vehicle operation.
- Renewable Energy Grants and Loans – Funding to support a new renewable energy producing project, which either provides on-grid or off-grid power solutions, such as wind farms or solar arrays.
- Tree Planting Grants – Funding is available to landowners or leaseholders with permission to plant a series of trees at their location to improve carbon absorption and reduce the overall average ground temperature at a location on hot days.
How Much Funding For Project Costs Is Typically Available?
Every single scheme is different, for some lower cost energy efficiency grants it is possible to get up to 100% of the improvement project costs covered. Other higher costing projects can see businesses expected to provide a contribution of funding from other sources, ranging from 40% of costs covered by the grant up to 90% of the project costs covered. In many cases this is to ensure that the grant applicant is financially solvent and serious about completion of the project and willing to take on some of the financial risk themselves. It also means that by receiving partial/matched funding, a developer might be able to take on a higher cost project than they would have done without the grant.
From the current set of grants available in the UK for Energy Efficiency, a total amount awarded as a grant ranges from under £1,000 for small energy efficiency upgrades up to £250,000 for a larger scale green infrastructure development project.
Who can apply?
Individual landlords, developers and sole trading business owners are able to apply for both loans and grant funding to carry out new energy efficiency activities in their local area, up through small to medium sized businesses and large corporations who would be within the financial range for the national grants, where funding is fully scalable based on project size.
How do you apply?
As the criteria and requirements of energy efficiency funding is complex and varies on individual property or business needs, most grant and loan providers often invite those interested to submit an initial enquiry and then have an energy efficiency consultant come round and assess what would be the most effective measures to be implemented in each case and if it is feasible.
Prospective applicants can compare different funding provider options and filter based on their own needs by reading details of what each scheme will fund, what geographic location is covered and the eligibility criteria to apply.
Once both an applicant and funding provider are satisfied that their needs match up, then a more formal application process is issued and the usual financial due diligence checks are carried out and funding is either awarded or a decision not to fund comes with an explanation, so that businesses can take on board feedback against future applications.
When do you apply?
In some cases of funding applications for energy efficiency there is usually a deadline that businesses must adhere to so that limited funding can be processed and applicants can then be considered to be awarded funding. Those who apply after the cut off point will not be considered for funding.
There is also energy efficiency funding that has been made available to improve the energy performance of properties and push businesses towards net zero in local areas and across the UK on a longer term basis and that means that these funds stay open far longer than others, in many cases for years. This means that applications can be made for this type of funding on an ongoing basis, as long as the fund states it is open for applications.
When it comes to the actual stage in the energy efficiency project process for a business, you would typically apply for the funding before any improvement work has taken place. The reason for this is because most funding providers will only pay for work completed that has been approved by them and not work that has already been completed and may not meet their cost criteria or list of approved items that can be paid for using funding.
Want the Full Set of Energy Efficiency Funding Schemes?
If you want the full set of UK Energy Efficiency Grants available, you can use our Grants Matcher, or if you want to save yourself the time and effort then tell us about your project funding needs and let us do the work for you.
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