SIP bonus incentive improves your business case
Submit lighting, compressed air upgrade projects by December 31, 2014
Right now, BC Hydro is offering bonus incentive funding for energy efficiency projects submitted to the Self-serve Incentive Program (SIP).
The bonus incentive helps you build a better business case: an even shorter payback on lighting and compressed air projects that will continue to cut costs over time.
Submit your energy efficiency upgrade project between now and December 31, 2014, for a project to be completed prior to March 31, 2015 — and get long-term savings with a lower up-front cost.
Up to 25 per cent additional funding
The incentive bonus can add up to a 25 per cent increase on top of the standard incentive you already qualify for. Your project may be eligible for funding up to the following maximums:
- a maximum incentive of $500,000
- an incentive maximum of 75 per cent of project costs
- an incentive maximum required to reduce the project payback period to one year (project cost less annual bill savings).
Sample project* demonstrates value: 6-month shorter payback period
Company: Industrial Refrigeration Company
Project: Energy efficient air compressor upgrade
|Project Cost||$ 45,000|
|Annual Electricity Savings — KWh||80,350 KWh/yr|
|Annual Electricity Bill Savings||$ 7,745|
|Equipment Lifespan||10 years|
1. Standard incentive calculation
The standard SIP incentive is calculated by multiplying lifespan electricity savings by the incentive rate.**
Annual savings x Lifespan x Incentive rate = Standard incentive
80,350 kWh/yr x 10 years x $0.01818/kWh = $14,607.63
With no additional bonus incentive, this project qualifies for an incentive of $14,607.63, giving a payback of about four years.
2. Assessment of project maximums / caps
If the standard incentive does not meet any of the maximums, the project is eligible for the time-limited SIP bonus incentive offer: up to 25 per cent additional incentive, or up to the next project maximum, whichever is less.
Incentive maximums (no maximum may be exceeded):
- Overall incentive maximum: $500,000
- 75% of project costs: $45,000 x 75% = $33,750 maximum project incentive
- Payback period maximum: Amount needed to reduce project payback to one year, calculated as project cost less annual bill savings: $45,000 - $7,745 = $37,255 maximum
This project's allowable incentive is capped at $33,750 — the lowest of the project maximums.
3. Calculation of bonus incentive
Standard incentive increased by 25% = total incentive (subject to project maximums)
$14,607.63 x 1.25 = $18,259.54
With the additional bonus, this project qualifies for a total incentive of $18,261.58, giving a payback of about 3.5 years.
Business case improved: 40 per cent of upfront costs, $77,450 savings
Because the standard incentive plus SIP bonus incentive does not exceed any of the project maximums, this project receives the maximum bonus: 25 per cent additional incentive.
- With the bonus offer, the total incentive pays for approximately 40% of upfront project costs.
- The electricity savings are estimated to pay for the balance of project costs in about 3.5 years.
- The more efficient lighting system is estimated to save $77,450 in electricity costs (not including potential rate increases) over the next 10 years.
*Sample project numbers are taken from a real project but calculations presented have been simplified for illustrative purposes. The incentive calculation is dependent on many factors including, but not limited to interest rates, incentive rates and the electric tariff. Actual project incentives may differ. This example calculation is provided for information purposes only.
**The bonus offer applies a 25% increase to the standard SIP incentive rate range ($0.015 to $0.029 per KWh); the exact range is determined after a financial evaluation by BC Hydro.
Don't miss out: are you eligible?
Act now to gain your incentive bonus if you fit the SIP eligibility requirements:
- BC Hydro industrial customers with annual electricity consumption of more than 500,000 kWh (about $25,000).
- Projects must focus on one of the following systems:
- Applications must be received by December 31, 2014. It's important to wait to receive your SIP Incentive Offer approval (via email) prior to starting your project and equipment purchases. We are not able to award Power Smart incentives to projects already underway.
- Projects must be completed and invoices must be received by March 31, 2015.
How to get started
- Assessment: Ask your lighting or compressed air vendor for a system assessment to identify potential savings and project costs. Don't have a vendor? Complete the online referral request form for a referral to one of our trusted Power Smart Alliance members in your area.
- Receive approval: Register by starting an online application and submitting your project information. Wait until you receive your SIP Bonus Offer and approval to proceed. Your vendor will help to complete the application steps.
- Incentive: Get your SIP Bonus Offer cheque by submitting the project completion declaration and invoices by March 31, 2015.
Apply before December 31, and keep on saving
Savings upon savings don't come along everyday. Get your SIP application in before December 31 to qualify for this time-limited incentive bonus offer. You'll save on project costs — and you'll keep saving every month when you see the difference on your energy bill.