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Tax relief criteria updated for energy efficient equipment

New government guidance details updated criteria for energy efficient equipment qualifying for enhanced capital allowances, covering tech such as lighting, biomass and air conditioning.

New government guidance details updated criteria for energy efficient equipment qualifying for enhanced capital allowances, covering tech such as lighting, biomass and air conditioning.

The guidance covers equipment included in the Energy Technology List (ETL), an independently-assessed list of energy saving technologies which qualify for enhanced capital allowances. 

If a product is on the ETL at the time of purchase, companies can write off the cost of that product against taxable profits. 

The list of eligible products is constantly being updated, with nearly 24,000 products removed from the list up to 2014 alone.

Updated criteria

Qualifying criteria for over 40 categories of equipment were updated on 6 October, including biomass boilers and water heaters, heat pumps, close control air conditioning, lighting controls, motors and drives, and refrigeration equipment, among others.

For example, new criteria for lighting controls covers time controllers, presence detectors, daylight detectors and centralised control units.

New equipment in this category needs to be able to demonstrate a saving of at least 75 per cent on power consumption from automatic dimming controls, as well as the ability to automatically switch off at predetermined times.

The full list of changes is available here

‘Valuable resource’

With many companies now increasingly wary of energy saving claims made by product manufacturers, the ETL is being promoted as a trustworthy source of information that can be used to inform procurement.

Paul Huggins, associated director of the Carbon Trust, said: “The case for investing in better energy efficiency often seems blindingly obvious, but making good decisions depends on having good quality, reliable information. 

“In the last few months the performance gap between manufacturer claims and real world performance has become a prominent issue. This is why the ETL is such a valuable resource. It provides organisations with a vast database of independently tested energy saving equipment, where you can be confident of getting products that will deliver top quartile performance.”