Enhanced Capital Allowance (ECA) - Tax Relief
The Enhanced Capital Allowance (ECA) scheme is a key part of the Government's programme to manage climate change, and is designed to encourage businesses to invest in energy-saving equipment.
Why was it introduced?
The Government introduced the ECA scheme in 2001 to encourage businesses to invest in low carbon, energy-saving equipment.
What does the ECA Energy scheme involve?
The scheme provides a tax incentive to businesses that invest in equipment that meets published energy-saving criteria. The Energy Technology List (ETL) details the criteria for each type of technology, and lists those products in each category that meet them. At this time LED lighting does not need to be listed to qualify, however you will require a statement from either the manufacturer or supplier.
For more details, take a look at http://etl.decc.gov.uk/etl
Key features of the ECA scheme
- Open to all businesses that pay UK corporation or income tax, regardless of size, sector or location. (Loss making businesses may apply against income tax payments)
- Provides 100% first-year capital allowances on investments in energy-saving equipment against taxable profits of the period of investment
- Only spending on new and unused energy-saving equipment can qualify for ECAs
- Capital allowances are available for spending "on the provision of" plant and machinery. This can include certain costs arising as a direct result of the installation of qualifying plant and machinery such as; transport of the equipment to the site, and some direct installation costs. Please refer to the ECA website for more information
In summary LED luminaires are required to:
Have an efficacy after 100 hours of continuous operation of:
- Accent/amenity/display lighting >= 46 luminaire lumens per circW
- Interior Downlights >= 60 luminaire lumens per circW
- Interior Uplights >= 75 luminaire lumens per circW
- Interior combined up/downlights >= 75 luminaire lumens per circW
Have a colour rendering index that is at least Ra80 for interior general illumination
Have a power factor that is greater than or equal to 0.7 at all levels of product light output.
Do PhotonStar™ Fittings Comply?
LED lighting does not require a certificate to be issued or to be registered on the Energy Technology List. The manufacturer supplies a statement to confirm that products comply with the requirements.
For amenity, accent & display lighting units, all PhotonStar™ light engines comply with the efficiency, colour rendering and other requirements
For general interior illuminations, fittings using the following light engines comply:
The power factor is determined by the driver. The majority of PhotonStar™ drivers comply, however care should be taken to specify a driver that has a power factor equal to or greater than 0.7. This is stated on the driver tables.