Alternative Financing the Choice for Energy Efficient Programs

SIEMENS Financial Services have released a white paper which reveals that many companies are increasing their investment in energy efficiency technology to reduce energy consumption and bills.

The report comments that spiraling energy prices are often the motivation behind these efforts, but obstacles have to be overcome to access loans for green, energy saving programs. Tough constraints are often enforced to such financing arrangements, restricting the choices for many in industrialized states - leading to different forms of loans and grants being chosen.

The study discovered that asset-financing, such as leasing or renting, is often favoured, allowing businesses to finance the whole or part of the costs for energy efficiency technology and upgrades.

These financing models allow enterprises to spread the cost of the investment without dipping into capital, generally with the cost savings from the resultant reduced energy bills covering the payments.

These financing models also protect the bottom line, allowing for changes in trading conditions while the energy saving actions reduce costs and have a positive effective on competitiveness.

As an example the white paper highlights that about 70 percent of Europe’s industrial electricity usage comes via electric motorized systems - highlighting the need for investment by industry in variable speed drives (VSD) as a major energy and cost saving strategy. VSDs would be suitable for around half of the motors in use, saving a substantial amount in Europe and even more globally.

Picture of Euros byTwid from da [GFDL or CC-BY-SA-3.0], via Wikimedia Commons

Friday 2nd November 2012

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