Small Scale CHP Units: an Introduction to Funding Cogeneration

Posted by Ian Hopkins on 26-Aug-2014 10:00:00

This guide will inform you about the advantages and disadvantages of funding for small scale CHP units 

animated GIF

This infographic introduces the funding options for small scale CHP units and will offer guidance to help choose the most appropriate source of finance.

A good choice of funding option may affect the overall installation economics, particularly influencing the payback period.

In many cases, the choice of funding option will be driven by the state of the organisation's balance sheet and the tax position.

Money matters – but where could it be sourced from ?

 

Organisation's own resources
(aka 'on-balance-sheet’)

Capital purchase

Advantages:

  • Greater control and flexibility of operation
  • Potentially attractive tax treatment

Disadvantages:

  • Need to commit resources which might be better employed on alternative investments

Access to capital

Organisations have a further choice under this option of whether to use cash held internally (where available) or make use of debt, either from a traditional bank or a newer 'peer-to-peer' lending source

 

Partner or contractual counterparty's resources
(aka 'off-balance-sheet')

Discount Energy Purchase

Energy Services Agreement

Public Private Partnership

Advantages:

  • No need to commit own resources
  • Predictable flow of costs, energy savings and carbon emissions savings for term of contract

Disadvantages:

  • May be less flexible in situations where the business/energy strategy is liable to change in future

 

Make sure that your organisation's choice of CHP scheme in terms of

  • Technology
  • Size
  • Funding type

is consistent with underlying business and energy strategy.

Discover more about purchasing CHP units with your free eGuide: Purchasing CHP: What financing options are available?

                   

Topics: Energy Buying, CHP / Cogeneration

Ian Hopkins

Ian Hopkins is a technical sales professional and business leader with more than 15 years’ experience in delivering energy efficiency projects and strategy in Europe and the United States. Ian currently heads up the Sales and Marketing function as one of the board directors at ENER-G Combined Power Ltd.