eEnergy Group (AIM: EAAS ) has launched the ‘Green Energy Initiative’, a scheme focused 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, efficient LED lighting.
The "Energy Efficiency-as-a-Service" (EEaaS) business operating within the UK and Ireland said the initiative will complement the Group's existing Light-as-a-Service ("LaaS") offering.
The Initiative has been set up by eEnergy to work in conjunction with the Public Sector Decarbonisation Scheme ("PSDS"), a UK Governmental entity which provides grants for public sector bodies in order to fund energy efficiency and heat decarbonisation measures.
PSDS is prioritising £1bn of grant funding to accelerate the decarbonising of public sector buildings, including state schools, academies and trusts, by upgrading to LED lighting.
Through the Initiative, the Group said its 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.
eEnergy will also provide qualifying schools with a more flexible funding package via its third-party commercial Funding Partners. This package will cover any funding shortfall while increasing the cost savings of a school through accelerated project timelines, it noted.
The Funding Partners will enable the school to pay eLight a fixed monthly service fee as opposed to an upfront capital payment. The group added that this allows for a ‘capital-light business model’ which doesn’t rely on its own balance sheet to fund these LaaS projects.
For independent schools who can’t apply for the PSDS, the Initiative will meet the full cost of the installation through the Funding Partners, enabling an improved return for the Group.
The Directors believe only 20% of schools have upgraded to date, and given the volume of public sector buildings, it is likely that many grants from the PSDS will not meet the full cost of the LED lighting installation, with schools not being awarded any money in some cases.
However, 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 its 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.
“Our proven model has already seen us complete over 1,000 energy improvement projects, saving over £16 million for clients,” said Harvey Sinclair, Chief Executive of eEnergy.
"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, reducing carbon emissions, as well as creating job opportunities for contractors across the UK,” he added.
Shares in eEnergy Group have more than doubled in value since September 2020 to open 3.91% higher this morning at 9.97p following the announcement.
Reasons to Follow eEnergy Group
eEnergy is a “Energy Efficiency as a Service” (EEaaS) business focused on helping schools and businesses across the UK and Ireland reduce their energy consumption through innovative funding packages to enable upgrades to LED lighting in exchange for a monthly fee, thereby avoiding any large upfront payments.
For customers, the energy savings are greater than the monthly service fee, which means the company allows them to unlock free cash-flow ‘from day one’ as well as to improve the quality of their lighting and reduce carbon emissions.
Its ‘EEaaS’ value proposition allows customers to re-purpose their existing utility spend and unlock net cash-flow savings from their infrastructure, without the need for capital investment, allowing them to upgrade their building infrastructure to comply with environmental legislation.
Innovation across the Energy Services Sector
eEnergy, which was admitted to AIM in January 2020, aims to become a leading energy services company and acquire other businesses in the energy management sector.
The EU energy efficiency services market was worth around €25 billion in 2017 and is expected to double by 2025. Since its creation, eEnergy has been awarded The Green Economy Mark by the LSE which in turn has recognised the company's work on sustainability.
The group is to develop an eLight App to allow client proposals to be generated directly from data capture. It believes an app, which grants third-party electrical contractors the ability to offer its LaaS solution to the SME market, will create a new market opportunity.
Harvey Sinclair, CEO of eEnergy, believes its recently announced exclusive OEM partnership with Venture Lighting will also help drive profitable growth for the Company.
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