Innovative finance methods such as ‘Energy as a Service’ are enabling manufacturers to invest in energy saving measures without the need to commit capital, according to Siemens.
A new report from Siemens Financial Services shows how manufacturers can more easily implement energy efficiency solutions with smart finance initiatives now available on the market.
According to the report, average cost savings from energy optimisation programmes - such as LED lighting or equipment upgrades - are in the region of at least 25 per cent, but most cash-strapped manufacturers tend not to regard them as an immediate investment priority.
Energy as a Service
In response, new financing models have given rise to the concept of ‘Energy as a Service’ (EaaS), whereby companies pay for the outcomes of energy optimisation rather than having to invest their own capital in new equipment.
In other words, companies let a third party fund the improvements and then pay back using the achieved energy savings. A variety of different financing models are now available on the market, some offering a low or zero net-cost for the manufacturer.
‘Savings as a funding source’
Gary Thompson, UK sales director at Siemens Financial Services UK, explained: “UK manufacturers currently spend in excess of £8 billion per year on electricity and gas, and the long-term trajectory of industrial electricity prices is upwards.
“Innovative financing methods regard energy savings as a source of funding – to effectively pay for the conversion to optimised energy generation, transmission and consumption over a given period. The beauty of these schemes is that they eliminate the main obstacle to smart energy conversion – the need to raise and commit scarce capital which is under pressure to be deployed elsewhere.”
