Following an article published by Powerstar’s Chief Financial Officer, Robert Macklin, on 4 May outlining the benefits of funding an energy saving project through Powerstar as a Service, Powerstar has created the below business case to demonstrate how the ‘As a Service’ funding solution can work for multi-site organisations to save money in both the short and long term.
The Business Case
The way businesses seek to acquire high-value products and services is transitioning to a heavily serviced model, but it is important to explore exactly how these funding models work when subjected to the bespoke specifications of each business and their unique requirements. Powerstar as a Service was created to meet the shifting demands of Powerstar’s clients, who required energy and carbon reducing project through a flexible funding option that didn’t consume a large portion of the company’s available capex upon implementation.
To that end, below represents an example of how Powerstar as a Service could work for the first five years when compared with upfront purchase, where a staggered roll-out is required due to capex restrictions.
In the above example, Company B is seeing a much greater return on investment for the implemented project, whereas Company A will not start to benefit from the projects full benefits until after the final systems have been installed, 5 years after the project begins.
In addition, Company A is funding the project through their own capital, whereas Company B is utilising third-party capital, reducing risk and maximising on the cost benefits available through the energy saving project.
The inefficiency expenses displayed on the table represent the potential savings that Company A misses out on over the 5 years it takes them to implement the project.
Company B will also receive additional benefits from the project, such as:
- Comparability of all sites for Profit & Loss (P&L) / Cost Centre review
- Prolonged life-span of on-site electrical equipment for the full 5 years
- Fewer electrical equipment repairs and replacements
- Reduced risk as responsibility for the energy saving equipment lies with the provider
For more information about Powerstar as a Service and the benefits it can provide your company when delivered as a fully tailored funding solution, contact Powerstar on 01142 576 200 or by emailing [email protected].