Energy Technology List (ETL) and ECA
25/06/2019
The Enhanced Capital Allowance (ECA) scheme is a part of the Government's plan to tackle climate change and was introduced to encourage businesses to invest in energy-saving equipment. The system can provide your business with enhanced tax relief for investment in equipment that meets specific Government criteria.
Unlike standard capital allowances, the ECA scheme entitles your business to claim 100% of the cost of an eligible air conditioning or HVAC system in the first year, providing that the equipment is on the government-approved list of energy-saving technology (you can view this list on the official government website right here).
Simply put, your business could use the Enhanced Capital Allowance scheme to write off (against profits) the full cost of an air conditioning or refrigeration system in the very same year that system is purchased!
The first year's saving could be as much as £300 for every £1,000 invested. This windfall is a real opportunity to invest in new equipment while slashing energy costs.
The ETL (or Energy Technology Product List, ETPL) is a government-managed list of energy-efficient plant & machinery. It is part of the Enhanced Capital Allowance (ECA) tax scheme for businesses.
Buyers
If you are a business that pays income tax or corporation tax, you will be able to claim 100% first-year capital allowance on a product ... if it's on the ETL at the time of purchase.
Overview
The ETL (or Energy Technology Product List, ETPL) is a government-managed list of energy-efficient plant and machinery, such as electric motors, boilers and air conditioning and refrigeration systems that qualify for tax relief. For a product to be on the ETL, it must meet specific energy-saving or energy-efficient criteria. It is part of the Enhanced Capital Allowance (ECA) tax scheme for businesses.
The Department for Business, Energy and Industrial Strategy (BEIS) annually reviews the technologies and products that qualify for inclusion. The ETL is managed on behalf of BEIS by the Carbon Trust.
Products included
- Air to air energy recovery
- Automatic monitoring and targeting (AMT) equipment
- Boiler equipment
- Combined heat and power (CHP)
- Compressed air equipment
- Heat pumps
- Heating, ventilation and air conditioning (HVAC) equipment
- High-speed hand air dryers
- Lighting
- Motors and drives
- Pipework insulation
- Refrigeration equipment
- Solar thermal systems
- Uninterruptible power supplies
- Warm air and radiant heaters
- Waste heat to electricity conversion equipment
For more details about eligible product types and the amount of energy they save, see the technology factsheets about ETL product types.
The Department for the Environment, Food and Rural Affairs (DEFRA) lead on the Enhanced Capital Allowance Scheme for water efficient technologies and issues revised water technology criteria and product lists.
Enhanced Capital Allowance (ECA) scheme
The ECA scheme means that a business can invest in energy-saving plant or machinery that might otherwise be too expensive.
The first year allowances let businesses set 100% of the cost of the assets against taxable profits in a single tax year. This means the company can write off the value of the new plant or machinery against the business's taxable profits in the financial year the purchase was made.
An ECA is claimed through a business's income or corporation tax return in the same way as any other capital allowance. HM Revenue and Customs are responsible for the tax-related aspects of the ECA scheme.
