Public sector bodies, including schools, can access a government-backed scheme that pays for installing energy saving LED lighting.
In a previous blog, we shared real examples of a primary school that recouped nearly £6,000 a year, and a secondary school that recouped more than £20,000 a year, as a result of switching to low energy LED lighting.
However there is an upfront installation cost – replacing outdated fittings and fixtures and swapping inefficient bulbs for LED lights – that can be a deterrent for some schools.
The good news is that the government has recognised the benefits of helping public bodies make energy savings. It set up a programme – Salix Finance – to provide interest-free Government loans to the public sector to improve their energy efficiency, reduce carbon emissions and lower energy bills.
This means that public sector bodies like schools can install energy efficient, LED lighting with no upfront cost. Salix provides an interest-free government loan for the installation, which is paid back over time from the savings made on energy bills.
How does it work?
The main criteria for the funding is that the project must pay for itself within eight years, through the predicted annual energy savings. Let’s look at an example of how this would work.
The Green Primary School undertakes an energy survey which demonstrates that replacing its current lighting with LEDs will save £5,000 on energy bills each year. The initial installation will cost £25,000. Through Salix, the school accesses a 0% interest loan of £25,000 to pay for the installation. Once the new lights are fitted, it pays the £25,000 back over five years in £5,000 yearly instalments.
During that time, the school benefits from reduced maintenance costs – which can be significant – and improved lighting quality, as well as a reduction in carbon emissions. After the loan is paid, the full savings go back into its budget.
One question is what happens if the predicted energy savings are not as great as anticipated. In reality this is unlikely, as Salix will only fund applications where they are confident that the savings are achievable. Salix determines the calculations used in the application process, which use conservative estimates of energy usage and cost per kilowatt. In addition, schools often make savings on maintenance, which are not included in the calculations.
Salix will audit the project once it has been approved to make sure the installation has met the criteria. The scheme has been going since 2004, so it has a long track record of funding successful, cost effective projects. See the Salix website for more information.
Who can apply?
Maintained schools and other public sector bodies (NHS premises, for example) can apply at any time for Salix Finance. The situation is different for academies in that there is a time-limited window which varies each year. The funding is on a first-come, first served basis, so smart academies will undertake a survey that shows the work required and the potential savings, so that they are ready to go when the next funding window opens.
As the loan approval criteria is so rigorous, it is important to work with an LED company that understands the Salix funding model and application process, so that the bid has the greatest chance of success.
Save Energy 2 Day has worked with schools and other public bodies around the country to secure Salix funding and carry out the installation of high quality lights and fittings. Please contact us today for more information or to arrange a free, no obligation survey to assess the savings your school or organisation could make.
* The Salix Finance scheme is open to schools, further and higher education institutions, local authorities, and NHS trusts and foundation trusts. If your organisation falls into one of these categories and you would like to know more about accessing funding, please contact us today.
