Companies wishing to upgrade equipment should understand the energy cost support provided by the government's COVID-19 stimulus package.
By Energy and Carbon Solutions Mario Silvera, National Business Development Manager
We have seen customers of all sizes trying to understand the $ 189 billion stimulus package provided by the Morrison government. Companies have stopped spending on equipment upgrades until they understand how the new support will subsidize capital expenditures. This will turn out to be very important in the context of energy efficiency as there is no better way to cut operating expenses than to minimize one of the biggest culprits: electricity costs?
The three main government grants to companies are:
Manufacturing efficiency scheme – compressed air and steam supply
Particularly important for manufacturers and suppliers of air compressors with more than 30 kW, the government of New South Wales will fund a review of their compressed air and steam systems until April 30. The grant includes a compressed air review to determine if there are better options for pneumatic tasks ($ 5,000 per site) and a compressed air leak test ($ 3,000 per site).
In May, up to $ 70,000 of available funds will be available to repair equipment identified in the air leak audits. Only $ 5 million was provided for these repairs, which are awarded to eligible companies on a first-come, first-served basis.
As one of only 10 approved service providers for this state audit, Energy and Carbon Solutions suggests that every company with an air compressor with> 30 kW uses the available air leak tests. Since COVID-19 has not yet disclosed all the economic implications, the savings on these audits can range from thousands to tens of thousands of dollars in energy costs: savings that can make a difference to your business as EOFY approaches.
Solar panels and batteries
Does your company see solar energy as an environmentally friendly alternative to conventional electricity? As of March 12, small businesses can purchase eligible assets up to a value of $ 150,000 and can claim them until June 30 this fiscal year (assets purchased between April 2, 2019 and March 11, 2020 can will immediately be written off from property tax $ 30,000). To request either of the two thresholds, the company must make the purchase and use the asset in the same year in which it requests the deduction before June 30.
This amortization is a great way for small businesses to make important purchases without having to wait to make a claim. It has expanded to include companies with sales of up to $ 500 million (from $ 50 million). This is good news for higher-revenue companies that need larger equipment purchases, such as: B. for solar photovoltaic systems (PV), as this significantly shortens the payback period.
However, timing is crucial. Energy and Carbon Solutions has determined that the shortage of solar modules from China due to COVID-19 will lead to increasing component costs. In connection with falling AUD exchange rates, we expect an estimated increase of 20 percent for solar PV systems by the end of April. With instant small business tax depreciation set to reset to $ 1,000 starting July 1, businesses must act now to find the best cost-effective solution.
Industrial and commercial lighting
NSW government energy-saving certificate prices have hit a 12-month high of $ 29 per certificate, an increase of 25 percent since January. The value of this increase cannot be overstated in terms of companies wishing to upgrade to 200W or 400W metal halide lamps. These older lights not only create a poorly lit environment for the staff, but by upgrading to 150 W LED lights with motion sensors and dimming technology, lighting costs can be halved. All with very little to no cost, courtesy of the NSW Energy Savings Scheme.
A recent lighting upgrade project for a major transportation infrastructure company saved $ 61,491 by replacing 299 metal halide units with LEDs. This meant a 65 percent reduction in on-site electricity consumption and 191 tons of CO2 emissions.
Energy and Carbon Solutions recommends that industrial and business premises that have not dealt with lights for more than five years use the opportunity now available to reduce the impact of COVID-19 on daily cash flow.
Mario Silvera is the National Business Development Manager for Energy and Carbon Solutions in Sydney. With a background in finance and marketing, he switched to the energy sector more than 12 months ago to revitalize the energy efficiency perspective.