Press Release: Financing lighting energy efficiency in the public sector

Submitted by Salix on Tue, 17/07/2018 - 14:17

For local authorities across the country, there is considerable potential to make significant energy spend and carbon emission savings through the installation of energy efficient technologies.

Upgrading street lighting is one way that councils can effectively reduce their long-term energy and maintenance costs, while at the same time improving the quality of light.

Such energy efficient upgrades are readily available, and often repay their initial capital cost within just a few years, providing councils with additional funds to utilise in other areas.

There is a strong case for investing in energy efficiency, however, despite the benefits, the possible absence of available budget or finance can be a key factor preventing local authorities from investing in such schemes.

Fortunately, there are numerous funding options available to lighting professionals working within the public sector if internal capital is not available. Various bodies and schemes, including government loans, are available to support public sector organisations and help them to overcome the limitations that access to finance can present.

Salix funding

There is finance available from companies such as Salix Finance, a not-for-profit, government funded organisation that provides 100% interest-free loans to the public sector for energy efficiency projects including street lighting. Funded by the Department for Business, Energy and Industrial Strategy, the Department for Education, the Welsh Government and the Scottish Government, Salix is dedicated to improving the UK public sector’s energy efficiency and reducing its carbon emissions and energy bills.

Salix funding is available to local authorities wishing to pursue energy efficiency schemes, covering a range of technologies including street lighting replacements, indoor LED lighting upgrades, lighting controls and floodlight replacements, in addition to general heating, ventilation and insulation improvements. The upfront capital is repaid through the project savings making this a cost neutral approach for public sector bodies looking to improve their energy efficiency.

Since 2008, Salix has funded over £75.5m worth of street lighting projects, working with over 57 local authorities across England, saving an estimated £16.8m and reducing carbon emission by approximately 70,000 tC02e.

The application process

To be eligible for funding in England, projects are required to meet certain criteria, including payback periods and costs per tonne of carbon saved. As part of the application process, Salix’s project compliance tool, available on the company’s website, allows candidates to check that their project applications meet the Salix compliancy criteria for their respective loan programmes. For projects outside of the compliance criteria the Salix team is happy to discuss options with the candidate, such as part-funding projects.

To apply for funding, interested parties can submit an expression of interest, outlining their ideas, via the Salix website. Following this, a Salix representative will make contact to discuss the project in depth, assess its eligibility and run through the process. An application is then submitted through the website, with the company’s technical team on hand to offer guidance with any queries.

Once an application is received, Salix will undertake a technical assessment, awarding finance when successful. This process typically takes around two weeks. In addition to the above, projects over £100,000 must also submit a business case, which Salix provides as a template along with detailed guidance.

Successful applicants will be provided with a dedicated client support officer throughout the duration of the project and will also have access to a client support area online, offering additional information including technology guides, presentations and general guidance documents.

Funding in practice

Grendon Parish Council is an excellent example of a public-sector organisation to have benefitted from Salix’s interest-free finance. The parish in Northamptonshire has invested more than £9.5k into an energy saving LED street lighting upgrade as part of a wider programme to reduce its spend and carbon emissions.

The improvements, including the replacement of 34 outdated mercury lanterns with highly efficient light emitting diode (LED) fittings that are six times more efficient, have generated annual savings of around £970, paying back the upfront investment in just over five years.

While the existing lights run a wattage of 94 W, the new LED fittings have a wattage of between 37-26W, reducing the amount of energy used without compromising on the quality of lighting output provided. In total, the switch has helped to reduce the parish council’s energy consumption by an estimated 9,431 kWh a year - equating to almost 70% - and achieved annual carbon savings of approximately 424 tonnes of CO2e, in line with its emissions reduction targets.

Grendon Parish council was able to make the improvements thanks to part-funding of £4,800 interest-free loan from Salix and will be pay back the loan over the course of five years from the savings recouped from the reduced energy bills. Once the council has paid off the loan, it will be able to reinvest the savings in other areas.

Ian Denton, Chairman of Grendon Parish Council said: “This project has had a fantastic impact for the village as a whole. It has been a win-win situation for all - not only have residents benefitted from better lighting of the footpaths within the village, but the funding from Salix and the resulting savings achieved have also meant that the council has not had to dip into reserves. This has allowed us to continue to channel resources into supporting local clubs and associations, along with enhancing the environment of the village.

“Upgrading our street lighting has been a great success for us. I would urge any other parish councils who are looking into financing the upgrading of street lighting to certainly consider Salix Finance as a source of appropriate funding.”

The funding from Salix part-financed the £9,500 programme, covering more than half of the total project cost, providing Grendon Parish Council with the financial capital to be able to undertake the scheme.