eEnergy: Launch of Green Energy Initiative to help schools
eEnergy launches Green Energy Initiative to help UK schools switch to LED Lighting
Initiative is designed to work alongside the Public Sector Decarbonisation Scheme to help schools complete LED lighting installations
eEnergy Group plc (AIM: EAAS), a leading “Energy Efficiency-as-a-Service” (EEaaS) business in the UK and Ireland, is pleased to announce the launch of a new Green Energy Initiative (“The Initiative”). The Initiative is complementary to the Group’s existing Light-as-a-Service (“LaaS”) offering. It will focus on helping more UK schools, which are eligible for part but not full Government funding, to reduce carbon emissions and save money by switching to cheaper, more efficient LED lighting.
The Initiative has been set up, by the Group, to work in conjunction with the Public Sector Decarbonisation Scheme (“PSDS”), created by the UK Government. The deadline for applications for the PSDS is 11 January 2021. Through the PSDS, the Government is prioritising £1 billion of grant funding to accelerate the decarbonising of public sector buildings, including state schools, academies and trusts, including by upgrading to LED lighting.
Through the Initiative, the Group’s LaaS operating business, eLight, will provide its usual end-to-end services, including carrying out the required energy audit, designing, installing and maintaining the lighting, as well as helping schools apply for the PSDS.
Via its third-party commercial funding partners (“Funding Partners”), the Group will also provide qualifying schools with a more flexible funding package. This package will enable these schools to cover any funding shortfall from the PSDS, with the benefit of increasing overall cost savings to a school, through accelerated project timelines, thereby lowering the effective cost of finance.
The PSDS will help raise awareness about the benefits of switching to LED lighting, however, given the volume of public sector buildings, including state schools, academies and trusts that are yet to convert to LED lighting (The Directors believe only 20% of schools have upgraded to date), it is expected that many grants from the PSDS will not meet the full cost of the LED lighting installation. In some cases, schools may not be awarded any money. In either eventuality, eLight expects to be able to increase its addressable market, and the Initiative will either make up any shortfall or fully fund the switch, using just the Group’s Funding Partners.
The Group hopes to win a greater market share of the schools making the switch to LED lighting, as schools realise the additional benefits, over and above just using the PSDS.
As per the existing eLight business model, rather than upfront capital payments, schools will pay eLight a fixed monthly service fee which will be more than offset by the energy savings generated from the switch. This is made possible through the Group’s dedicated Funding Partners, which allow for a capital-light business model and do not rely on the Group’s balance sheet to fund these LaaS projects.
For independent schools who cannot apply for the PSDS, the Initiative would meet the full cost of the installation of LED lighting through the Group’s Funding Partners, enabling an improved return for the Group.
Harvey Sinclair, CEO of eEnergy, commented:
“This Initiative aims to help schools that are not being fully funded by the PSDS and provide them with sufficient funding for their LED lighting upgrades. This approach will provide further opportunities for eEnergy to win new contracts and expand the overall addressable market.
“Our Green Energy Initiative will complement our existing LaaS business by helping to unlock thousands more pounds in savings for schools by upgrading their lighting, reduce carbon emissions, as well as creating job opportunities for contractors across the UK. Our proven model has already seen us complete over 1,000 energy improvement projects, saving over £16 million for clients.”
As outlined in the interview below Harvey Sinclair, the Group’s CEO, expects government policy and the savings clients can make from using their services, will continue to drive the business forward.
