At a time when the way in which businesses want to acquire high-value products and solutions is transitioning to a heavily serviced model, Robert Macklin, Chief Financial Officer at Powerstar, discusses ‘Powerstar as a Service’, the company’s recently developed funding model that enables its award winning energy saving technology to be acquired without capital outlay.
The full article was published by Robert on LinkedIn on Friday 4th May 2018.
Powerstar as a Service: minimal risk, maximum reward
In recent years, ever-rising energy costs is something all businesses in the UK have been forced to come to terms with as the cost of electricity for business users has more than doubled in the past ten years.
Combined with ever-mounting pressure from the Government to implement energy efficiency strategies, reduce energy consumption and cut carbon emissions, many UK businesses are looking for manageable ways to fund new energy efficiency projects that can add value to their processes by saving money and providing a competitive advantage in the market.
The problem with the network
A leading contributor to the uptake in energy efficiency projects, even before the latest green targets announced by the Government in late-2017, is problems caused by the UK energy network supplying excessive levels of voltage, leading to excessive consumption, emissions and electricity costs to businesses for energy that isn’t actually required or utilised.
Due to the ageing energy infrastructure in the UK, which dates back to the 20th Century, the average voltage supplied in the UK is within the range of 225V-253V, despite European design characteristic standards meaning that the majority of UK & EU made electrical equipment is designed to operate at optimal efficiency at round 220V.To correct this issue at the source, within the transmission network, it would require a multimillion pound overhaul of the energy network, not to mention considerable disruption, so today the oversupply of voltage remains a problem, especially as businesses are charged for the amount of voltage they are supplied, not just what it consumes, resulting in overinflated energy bills, CO2 emissions and wasted energy. such as the ability of leading-edge energy storage solutions to maximise renewable generation which is achieved by first storing the generated energy when it is available and storing it for later use, but then, by supplying this energy to the grid as demand requires, this will negate the curtailment of renewables to the grid as it removes the intermittency of the supply whilst increasing the amount of green energy in the UK’s energy mix reducing reliance on fossil fuels and CO2 emissions
However, as technology advances, so does the efficiency of electrical equipment, although newer electrical equipment still faces the same issue of overvoltage due to conflicts in design characteristics and the supply from the National Grid. Additionally, older equipment will not run as efficiently as newer equipment from the outset, meaning even more energy is wasted to further inflate electricity costs and increase carbon emissions, not to mention the negative impact it has on the equipment adding unnecessary wear and tear and leading to premature failure.
A solution with added benefits
One solution to combat all parts of the problem is voltage optimisation technology. It is a well-established solution that enables facilities to reduce energy consumption, lower electricity costs, and offer sustainable benefits by reducing the excessive supplied voltage to an optimal level.
Voltage optimisation, as a bespoke solution, has the ability to reduce the incoming supply to an optimal level depending on a business’ current voltage profile, equipment, and requirements, and can correct an unstable profile by intelligently and automatically adjusting the voltage output at times of voltage spikes and dips.
Through optimising, cleansing and conditioning the incoming supply to reduce the amount of wasted energy caused by overvoltage, voltage optimisation reduces the overall electricity consumption of a site, thereby minimising a business’ electricity costs and protecting corporate social responsibility and reputation by curtailing CO2 emissions to shrink its carbon footprint.
In addition, the solution boasts further advantages to the efficiency of electrical power consumption and on-site equipment by enabling it to run at a level close to its design characterises, therefore prolonging its lifespan, in addition to reducing harmonics and improving power factor, helping to reduce future financial investment into equipment.
Pay for the benefits, not the equipment
Investing in energy efficiency technology, such as voltage optimisation, requires capital investment at the project’s conception. Although typically the system will pay for itself through energy consumption savings within 2-4 years, it can still be deemed unviable to businesses that have reserved their capex for activities core to the business’ operations, or are restricted by funding rules or third parties.
Therefore, despite the numerous benefits that the technology can deliver, it can end up deprioritised or being slowly implemented on a roll-out schedule, delaying the advantages to the business. But what if businesses could take advantage of the benefits without the capital outlay?
Powerstar has introduced a service that allows business to do exactly that, take advantage of the benefits without investing a significant portion of capital expenditure through its latest offering Powerstar as a Service (PaaS).
Powerstar as a Service allows businesses to implement its market leading voltage optimisation technology as a service. This involves a service contract being agreed between Powerstar and the benefactor, which specifies length of service term and payment structure providing a straightforward, flexible funding option to the client.
This allows businesses to reduce barriers by reducing or even completely negating upfront costs, and the terms can scale up or down as required, at any point in the agreement. This means the project in place can easily respond to accommodate changes to the business’ requirements, (a) without the need to raise further capital to secure additional equipment, or, (b) if the equipment is suddenly no longer required, without significant financial loss, providing a future proof solution that offers a level of security not available with outright purchases.
PaaS is available on Powerstar’s full range of voltage optimisation solutions and does not require any capital outlay from the client, meaning working capital can be utilised for projects core to the business’ activities. In addition, the fixed regular payments of the PaaS agreement are based on the economic benefit of the voltage optimisation solution; these payments will always be less than the savings achieved through the installation of the solution, meaning the customer is cash positive from day one. Additionally, implementing Powerstar technologies through PaaS is still protected by the 100% savings guarantee and its 50-year warranty.
As with all Powerstar solutions an engineering-led, bespoke and concept to completion approach is utilised meaning the PaaS agreement will be tailored specifically to the client’s needs, priorities and the characteristics of the facility, allowing for flexibility to ensure maximum value for the customer.
Contact Powerstar to find out more
To learn more about Powerstar as a service, or the full range of flexible funding options available to customers, contact Powerstar on 01142 576 200 or by emailing [email protected] to discuss your needs with an expert member of the team. Powerstar also offers a free consultation to businesses interested in its range of award-winning technology, and technology demonstrations are available at the head office in Sheffield upon request.
 Source: DECC survey of energy suppliers; Carbon Trust analysis.
04th May 2018