INFORMATION
Electric motors consume more energy than is recquired for their output
Switched-on energy saving
With rising energy costs, Leon Ball, Sales and Account Manager at Ilkeston-based Inverter Drive Systems, which specialises in the application of inverter technology to save energy in industrial plants and commercial buildings, asks whether it is time to look at using inverters to control motor speed.
Energy costs are still rising and are predicted to double in the next 15-to-20 years. With new legislation companies that exceed their available capacity levels will be financially penalised. Electric motors play an important role in our everyday lives which most of us are unaware of. They move and run most things we need for business and pleasure, including heating and ventilation systems in hospitals, warehouses, factories and offices, pumps in our swimming pools, spas and plants. It is estimated that electric motors consume approximately 67% of all industrial electrical power and that around 90% of electric motors are over-specified meaning they are consuming far more energy than is required for their application. All these motors need a
corresponding amount of energy to provide the torque or speed needed. If the torque or speed is too high, mechanical controls such as reducing valves or dampers are used to control the output. A motor’s speed should match exactly what is required by the process, otherwise the result is inefficiency with a lot of wasted materials and energy. This makes about as much sense as driving your car with your foot to the floor and braking at the same time. A way to control these motors,
which not only saves energy, but improves productivity and reduces maintenance costs, is to use an inverter. Inverters offer speed or torque control of electric motors and can reduce energy usage and lower carbon footprint with short payback times – often less than two years. For example, a hotel group saved
nearly £500,000 across its sites by fitting inverters to air handling units, pool, spa and other pumps. An additional benefit was a reduction in noise, an important factor in a hotel - especially at night.
Similarly, a 17-storey office
complex in London saved £15,000 in six months after fitting inverters to their hot water and chilled water pumps and extraction fans. The £48,000 project paid for itself in 18 months. Additional benefits include
longer plant life, due to the reduction in start stops which apply mechanical stresses to the motor and its windings reducing its life. This also means a reduction in motor downtime and maintenance. There is financial support
available from the Government- funded Enhanced Capital Allowances (ECA) scheme and, if you are based in Derbyshire, the D2 Energy Efficiency Grant is available to help fund capital projects.
R&D tax relief myths busted
By Sheetal Sanghvi
In last month’s article the myth ‘R&D tax relief is only for companies that employ people in white coats’ was busted. This month, RSM’s Sheetal Sanghvi busts another two myths:
MYTH ONE: My company hasn’t invented anything, so we can’t claim
MYTH BUSTED: HMRC has clear rules on the type of activity that qualifies for R&D tax relief. While they cover groundbreaking products and processes, companies don’t have to invent something radical to make a claim. The fundamental purpose of R&D is to create competitive
‘The fundamental purpose of R&D is to create competitive advantage’
advantage - if your company’s R&D puts you ahead of your competition and creates a technological advancement in your sector then it will qualify. More often than not, relief is claimed by companies that spend money on improving or modifying existing products or internal or external processes. Across the automotive sector, for example, a significant amount is
spent each year to design and develop more fuel-efficient cars. A leading car manufacturer recently made a successful claim for extending its existing model range to include a car that has lower emissions and is faster and lighter than the previous model. It led to an HMRC repayment in excess of c£750k.
MYTH TWO: We can’t claim as our customers have funded our R&D
MYTH BUSTED: Some companies carry out R&D work following a request from their customers. Others may act as a subcontractor and deliver R&D work for another company. However, both activities can still qualify for R&D tax relief. There are two options available: SME relief and research and
development credit relief (RDEC). If a company does not meet the SME criteria, it may still be able to claim under the RDEC rules, although the relief may not be as generous. However, some form of tax relief is better than none. It can be difficult to determine what qualifies as subcontracted
work, so each case must be determined on the individual facts. However, the main indicators typically fall into three areas: the degree of autonomy of the subcontracted company; the ownership of intellectual property and the economic risk in the arrangement. The relief claimed can be significant. A company that was
subcontracted by a retailer to develop in-store payment software made a successful SME claim that reduced its corporate tax liability by £400k.
NEXT ISSUE:
Two more myths will be busted: 1 We don’t pay corporation tax so we can’t make a claim. 2 HMRC will start investigations into all our tax affairs if we make an R&D claim.
business network June 2018 59
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