Loans vital for public sector energy-saving projects

Government loans are ensuring that public sector energy-efficiency projects which otherwise would not have sufficient capital to progress are able to go ahead.

A research report carried out by University College London has shed light on the extent to which government loan programmes are enabling projects which would otherwise not be implemented due to upfront capital barriers. Such projects typically include streetlighting, boiler replacements and combined heat and power installations.

Funds are delivered by Government-backed organisation Salix Finance as interest-free loans. Streetlighting schemes such as LED upgrades are vital for reducing energy consumption and meeting national energy-efficiency targets. 

The UCL study finds that there is strong evidence to suggest that the projects funded would not have gone ahead without the loan funding being available. Public sector organisations were asked to consider whether they would use Salix funding for future projects and how they would utilise the funds. The results found that the majority of Salix loans will lead to energy-efficiency projects and subsequent savings, which could not progress without the finance being available.

“The success of the Salix interest-free loan model allows the funding to be re-invested in further projects,” says Annie Shepperd, chief executive of Salix. “The appetite for the funding indicates that loans, not grants, are the way forward for Government investment in energy-efficiency projects.”

To date, Salix estimates that its interest-free loans have delivered over £375 million in savings, with predicted lifetime financial savings of over £1.4 billion and 7.4 million tonnes of carbon savings from funded projects. 

Visit Salix on stand P58 at LuxLive  on 18-19 November at London's ExCeL.