The Energy Technology List: beyond the Enhanced Capital Allowance scheme

Report

The Energy Technology List (ETL) is a government approved list of energy-efficient products across 56 technologies. Currently, products which are listed on the ETL (or meet the criteria in ‘unlisted’ categories) qualify for tax relief through Enhanced Capital Allowance (ECA), which allows the purchaser to offset the cost of the equipment against taxable profits. However, in the Budget 2018 it was announced that the ECA would end in April 2020 and that the revenue saved will be used for the Industrial Energy Transformation Fund.

The Department for Business, Energy and Industrial Strategy (BEIS), who oversees the list, are interested in hearing stakeholders’ views on what the future of the ETL could look like after April 2020. This report is a summary of stakeholder views from a series of four workshops, hosted by independent research agency Traverse, during May 2019. Workshops were attended by product manufacturers, purchasers, trade bodies, consultants (for example, tax consultancies, energy consultancies), and government bodies.

The majority of participants were aware of the ETL and ECA before attending the workshops and understood their purpose to be increasing the installation and use of energy efficient products, by influencing purchasing behaviour. Participants generally felt that the role of the scheme as an independent, credible source of information on energy-efficient products was its most important benefit. Most participants felt that the removal of the ECA will negatively impact demand for energy efficient products by removing a key incentive.

When discussing the current functioning of the ETL, participants felt that the largest barrier they face is a lack of awareness among purchasers, both of the scheme and the financial savings of using energy efficient products. Participants often felt this was exacerbated by a disconnect between those purchasing products (for example property developers or procurement teams) and those operating them (for example building occupiers).

Participants provided a variety of ways in which the ETL could be improved. Suggestions for the current operation of the ETL included improving website functionality (for example improving search functionality), simplifying the process for manufacturers to list products (including testing processes), and increasing awareness of the scheme to stimulate demand.
Participants also made broader, more aspirational suggestions, such as the ETL forming part of a wider movement towards decarbonisation, linking with other schemes or including other products such as renewable energy generation technology. Participants felt the ETL should be setting challenging standards to manufacturers, driving the market forward. They asked that government explore options for incentives or penalties for energy efficiency, which were seen as necessary in the absence of widespread awareness of the benefits of energy efficient technology.

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