Tughans Solicitors

Energy Efficiency Capital Grant Open for Applications

Andrew Kirke
Partner

Sector: Contracts and Technology

T: +44 (0) 28 9055 3306

M: +44 (0) 78 2732 5049

From yesterday, Monday 29 April 2024, the Energy Efficiency Capital Grant (“EECG”) issued by Invest NI opened for applications. The EECG will aim to help Northern Ireland businesses reduce energy costs by offering support to buy and install energy efficient equipment that reduces energy and carbon emissions.

In this article we’ve taken a (non-exhaustive) look at the key eligibility criteria for the EECG and at the level of support available. For further information please refer to Invest NI guidance on the application process here.

 

Eligibility

To be eligible, businesses must be:

  • a registered company based in Northern Ireland;
  • trading for at least 2 years;
  • implementing the project at premises which are registered for business rates with Land and Property Services (property type – non domestic); and
  • the owner of these premises, or have a rental agreement that exceeds the payback period of the project.

Invest NI will be limited to providing support to organisations that are engaged in industry, business and commerce. The following business are not eligible to apply:

  • those with sporting, social or charitable activities;
  • health care providers delivering core services on behalf of the NHS or health trusts;
  • schools, higher and further education businesses / organisations;
  • franchises which are not autonomous enterprises;
  • businesses involved in primary agricultural production, fisheries, and aquaculture (production and processing);
  • steel, coal, shipbuilding, synthetic fibres, transport and its infrastructure;
  • energy generation and distribution businesses;
  • infrastructure businesses;
  • businesses that are fully or part funded by the government, are already in receipt of or intending to gain other government support for the project or have an outstanding liability to Invest NI brought about through grant clawback proceedings;
  • businesses subject to a bankruptcy or administration proceedings;
  • industries or businesses which Invest NI judges pose reputational risk, e.g. gambling; and
  • government organisations and bodies and government funded bodies or government part owned/supported businesses.

 

Level of Support

The EECG is a reimbursement grant – applicants must complete the project and pay the costs in full. They can then submit their claim for reimbursement. When Invest NI confirms the project is complete, the eligible grant amount will be paid to the applicant.

Grants of up to £150k are available. The rate of support covers the total eligible project costs and is based on company size. For the following company sizes, the grant rate will not exceed (per application):

  • Small & Micro (fewer than 50 employees and either an annual turnover and/or an annual balance sheet total not exceeding €10m) – 50% of eligible project costs
  • Medium (between 50 and 249 employees and an annual turnover not exceeding €50m or an annual balance sheet total not exceeding €43m) – 40% of eligible project costs.
  • Large (any other company which does fall into either small or medium sizes categories) – 30% of eligible project costs.

Note: If a company is part of a group, then the employee, turnover, annual balance sheet and ownership limits apply to the group collectively. Invest NI may request information on businesses (including to verify these categories), such as details on the number of employees and annual turnover.

Up to three projects can be included within one application, with the maximum grant per application limited to £150k. Only one entity within a group structure of companies can apply for an EECG at any one time. Companies are limited to 2 applications across the 5‐year grant eligibility period and there must be a minimum of 2 years between applications.

The EECG is subject to the UK’s Subsidy Control Act 2020 or, where such financial support could affect the trade in goods between Northern Ireland and the EU, Commission Regulation (EU) 2023/2831 – the de minimis aid regulation. The maximum amount of de minimis aid a company can receive in any period of three years is €300,000.

 

Types of Projects

To be eligible, projects must have a total eligible expenditure of at least £4,000, demonstrate energy and carbon emission savings and achieve a payback of between 1 and 8 years. A higher payback may be allowed but these projects will require a higher level of energy and carbon savings (≥ 10% for 1-8 years and ≥ 50% for 8-10 years).

Eligible expenditure includes the capital costs directly associated with the third‐party design, purchase, delivery, installation and commissioning of equipment that saves energy and carbon and reduces costs (potentially including legal costs involved in negotiating relevant contracts for supply). All projects must be located at a single site.

Examples of projects that will be considered for the grant include:

  • heating and cooling equipment (i.e. heating systems, heat pumps, recirculation and heat exchangers);
  • building fabric (i.e. energy management systems, insulation, glazing, process and pipe insulation);
  • manufacturing and processing (i.e. clean technology, variable speed motors, compressed air systems, refrigeration equipment, industrial heating, extractor fans, conveyors.);
  • lighting (i.e. LEDs and lighting controls);
  • onsite renewables projects (i.e. battery storage, solar PV); and
  • other energy efficiency measures and innovations (these projects will be assessed on a case‐by-case basis).

Examples of projects that will be ineligible for the grant include:

  • fossil fuel projects, e.g., oil to gas heating system conversions;
  • combined Heat and Power (CHP) technologies and biomass burners;
  • projects where the applicant is not the direct energy user.
  • new builds – only replacement projects will be eligible;
  • projects that cover on‐going software licensing cost;
  • subscription based equipment and projects;
  • transport related projects, for example, relating to vehicles, charging points, etc;
  • equipment leasing or hire purchase agreements – however, a company is permitted to use company funds, or other unsecured lending;
  • second‐hand equipment;
  • ancillary works or additional infrastructure works;
  • projects where indirect energy savings occur as a result of predominately material efficiency improvements; and
  • projects relating to business expansion.

The technology list will be reviewed by Invest NI on an annual basis and updated as necessary with additions for new technological advances or for removals where technology has become obsolete.

Projects must be completed within one year from date of the letter of offer. If a project is not completed within that period, the offer may be rescinded at Invest NI’s discretion.

 

Application Process

The EECG will be administered to eligible businesses on a first‐come first‐served basis throughout the year. The grant will operate in accordance with the annual budget available.

All applications must include supplier quotations for all the project costs and must be submitted on Invest NI’s Customer Portal.

 

Contact

If you or your business require any assistance in interpreting whether you are eligible for the EECG, understanding the application process or require any general legal assistance with your energy requirements (including power purchase arrangements, with renewable installations like solar panels or wind turbines) or anything else, please feel free to reach out to Andrew Kirke or your usual Tughans’ contact.

While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.