Environmental & Financial Benefits

AmbiRad energy efficient heating systems offer a considerable number of energy and cost benefits. AmbiRad heating systems – such as infrared radiant heaters, space heaters and industrial heaters  – can help to reduce a building’s energy requirements and offer numerous benefits, including:

  • Lower running costs – achieve savings of up to 60%
  • Low level, even heat coverage
  • Controllability – systems can be easily controlled to provide varying zoned temperatures and operating times
  • Minimal heat losses through the roof of the building
  • Good aesthetic integration within the building
Climate Change Levy

Introduced in April 2001, the Climate Change Levy (CCL) is essentially a business tax on the use of energy sources that contribute to greenhouse gases and other polluting emissions.


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1. Why impose a levy?

Following the recommendations in Lord Marshall's 1998 report on economic instruments and the business use of energy, the Government decided that a tax on energy would be an effective way of promoting reductions in its use.


2. Why restrict the use of energy?

Following the Kyoto Climate Change Conference, the UK Government entered into a legally binding commitment to reduce the UK's total greenhouse emissions by 12.5% below 1990 levels, by the period 2008 to 2012. A domestic goal of 20% reduction in Carbon Dioxide emissions by the year 2020 was also set.


The Government has undertaken a commitment to reduce greenhouse emissions. Only domestic and transport sectors are exempt from the tax.

3. How much is raised by the Climate Change Levy and how is it used?

It is estimated that approximately £1.0 billion per annum is raised. The tax is intended to be fiscally neutral, being recycled back to business by cutting employers National Insurance contributions (NIC) by 0.3% and funding energy efficiency initiatives.

All other sectors of the economy are required to pay a levy


4. What is the structure of the levy?

Levy on electricity 0.43 pence per kWh
Levy on natural gas*, coal 0.182 pence per kWh
Levy on LPG 0.07 pence per kWh

*The levy on natural gas does not apply in Northern Ireland.

Note : Oil, good quality CHP schemes and renewable energy resources are exempt from the levy

This represents a 20% increase on gas bills based on average fuel prices.


5. What can the AmbiRad Group do to reduce the impact on business costs?

Help you prepare an energy audit and action plan which will identify various measures for reducing energy use.
Supply energy efficient products that provide 100% capital allowances in the first year under the Enhanced Capital Allowances scheme.

Clearly, businesses that are energy intensive and employ few people will see a net increase in energy costs.

Enhanced Capital Allowances

Enhanced Capital Allowances logo1. Why have Enhanced Capital Allowances been Introduced ?

To offer business an effective means of neutralising the impact of the Climate Change Levy (a business tax on the use of energy sources) introduced in 2001 with an incentive to adopt a more environmentally conscious approach when deploying energy resources.


2. What financial benefits are derived by claiming ECA’s?

  • 100% capital allowances in the first year, including the costs of installation.
  • Improved cash flow.
  • Taxation reduced in the first year.
  • Improved profit after tax.

3. Does warm air and radiant space heating qualify for ECA’s?

Yes, as of August 2002 high efficiency radiant and warm air heating systems are included as long as they meet the necessary efficiency criteria, and have been independently verified by an approved body.


4. What is the inclusion threshold for radiant heating?

  • Individually flued (or unflued) systems that achieve a net thermal efficiency of 86%.
  • And in addition have a radiant efficiency of 60%.
  • Multiburner or continuous systems that achieve a net thermal efficiency of 90%.

5. What is the inclusion threshold for warm air heating?

All units must have a minimum net thermal efficiency of 91%.


6. What impact will ECAs have on purchasing capital equipment?

Quite simply buying energy efficient systems will now cost less than standard efficiency options.

  Standard Efficiency Equipment High Efficiency Equipment
Capital cost
(inc installation)
£ 37,250
£ 44,000
Fuel costs £ 15,900
£ 14,700
Climate Change Levy £ 1,988
£ 1,838
Less Capital Allowance £ 2,800 £ 13,200*
TOTAL £52,338 £47,338

Notes
Fuel costs based on 1600 hrs per annum.
Fuel cost used for illustration 1.2p/kW.
Installation costs from actual data.
Based on Corporation Tax rate of 30%

* 100% capital allowance to be claimed in the first year including the costs of installation.


7. What AmbiRad products qualify for ECA? (subject to final verification by The Carbon Trust)

  • Vision herringbone combined radiant tube heaters
  • Vision VSO & VSXO UT unitary radiant tube heaters
  • VSO herringbone combined radiant tube heaters
  • Nor-Ray-Vac continuous radiant system
  • UESA warm air unit heaters

8. Where is more information available on CCL programmes and ECA’s?

Environment and Energy Helpline 0800 585794 www.actionenergy.org.uk