Subsidies and financing of energy performance projects
For the concerned companies, the profitability of energy performance projects must evidently be evaluated against the price of energy and CO2 quotas. But there also exist numerous subsidy mechanisms which allow for the improvement of return time.
Beyond the easily identifiable national mechanisms, specific aids can be considered according to regional policies, project by project.
Three major national subsidy mechanisms
The certificats of energy economy (CEE), the heat fund and the guaranteed prices are three subsidy mechanisms proposed on the French national scale. Non-cumulative, these different solutions must be understood in order to be able to build solid files that can be retained.
- The certificats of energy economy are, for the state, one of the principal instruments used to master the energetic demand.
Based on standard files, revised every three years, the energy economies realised by individuals, companies or local collectives are remunerated by energy providers. These economies are accounted in ‘culminated and updated megawathours’ of final energy. It is also known as MWh Cumac (MWhc), the account unit specific to energy economy certificate corresponds to the quantity of energy saved over an estimated time of use of equipment or renovation action.
On 1 January 2018, the device entered into its’ fourth period of obligation for a new length of three years. This is a market in which the value of the certificate varies: the first tri-annual plans propose 3€ to 4€ of MWh cumac, only 1,5€ during the CEE crisis of 2015, 6€ in 2018. Depending on the market price, the incentive can make operations very profitable, with amounts sometimes exceptionally high by operation (for heat recovery on cold groups, for example). There are real opportunities not to be missed.
- Managed by the ADEME since 2009, the heat fund is intended to support the production of renewable heat (like the thermal solar projects) but also the projects of fatal heat recovery.
Destined to the collective habitat, to communities and businesses, the scheme subsidises studies and investments based on percentage determined by the ADEME.
- The guaranteed price or price complements are mechanisms linked to the production of renewable energy.
The third-party financing solutions
Three financing solutions are possible.
The energy performance contract (EPC)
This service contract allows a company to benefit from the optimisations generated by all the equipment which will have been invested in by a third-party. The latter will be remunerated on the basis of services rendered, the monthly amount to be paid will vary according to energy performance achieved.
The EPCs induce a big challenge for result measurement. Most contracts lean on the IPMVP methodology (International Performance Measurement and Verification Protocol) and sometimes involve a trusted third-party to measure performance.
Operational equipment lease
This contract allows to benefit from equipment (motor, pump, photovoltaic panel…) in exchange for rent, with the possibility to buy the equipment at the end of the contract.
Easy to put into place, it presents a major inconvenience for companies subject to the accounting European norms (IFRS) to see consolidated debt associated with this operational lease. For the companies subjected to the French accounting norms (ANC), this challenge disappears.
The energy sales system applied to renewable energy
In the framework of a corporate PPA on site, the company provides a space available for the production of renewable energy (photovoltaic panels, cogeneration…), and commits to buying back electricity or gas produced during a defined period.
This operation cannot be consolidated according to the IFRS norms. Its’ choice depends above all on the possible taxes associated with the sale of energy which reduces the profitability of this operation.
Orygeen can assist its customers in:
Putting into place the subsidy mechanisms (to detect the applicable subsidies, built subsidy files r or support mechanisms)
Signing PPA and CPE contracts (to assist the client in defining the purchase price and negotiate the contract, optimise the solutions put into place, play the role of trusted third-parties on behalf of parties in the EPC)
Implementing efficiency projects or renewable energy production towards third-party financing with Foncière verte.