It isn’t often that the Inland Revenue gives money back, so it’s a good indication of the importance of energy efficiency in buildings that Government is making changes to the Enhanced Capital Allowances Scheme to reflect more accurately how much energy the equipment saves.

VRF heat pumps are the latest equipment to see a change in the way eligibility for ECA’s are calculated. Until recently, heat pumps qualified for the ECA scheme as long as they were labelled Category B or above on the ECU Directive. However, by April 2008 a new method
of assessment will be fully adopted.

The new method applies to air source VRF heat pumps in both split and multisplit systems and the new rules mean that the energy use of the indoor units and outdoor units in any combination has to be measured and accounted for. The latest Mitsubishi Electric Guide
explains how the new system will work, with details on where you can check for eligibility online.

The ECA scheme exists to encourage specifiers and building owners to invest in energy efficient technologies. In order to be eligible, you must select a product which appears on the EnergyTechnology List (ETL).

Manufacturers like Mitsubishi Electric must submit detailed information on the performance of their products and each product must undergo independent testing by a body such as BSRIA. The Carbon Trust then randomly requests a model on the list for various manufacturers.

ECA’s enable a business to claim 100% first-year capital allowances on their spending on machinery or plant that qualifies for the scheme. This means that businesses can write off the whole of the capital cost of their investment in these technologies against their taxable profits. Claiming for ECA’s is simple, because they are claimed in the business corporation tax return in the same way as other capital allowances.

Energy saving technology doesn’t stand still and there are new developments and improvements all the time. If you want to help customers make energy efficient choices then the ECA scheme is a great way for them to see quick payback on their investment.