Enhanced Capital Allowances

Enhanced Capital Allowances allow 100% first year writing-down allowances on certain expenditure qualifying as Energy Saving Plant and Machinery and Environmentally Beneficial Plant and Machinery, and which qualifies as “First Year Qualifying Expenditure” under CAA 2001. These include:-

Expenditure on Energy Saving Plant and Machinery incurred on or after 1 April 2001 (17th April 2002 for leased plant and machinery), and
Expenditure on Environmentally Beneficial Plant and Machinery incurred on or after 1st April 2003

Energy Saving Plant and Machinery – is Plant and Machinery that is unused and not second hand, and must be a qualifying technology or product that appears on the Energy Technology Criteria List and the Energy Technology Product List. However, certain assets are only included in the Energy Technology Criteria List and not covered by the Product list, but may still qualify for ECA’s if they satisfy certain performance measures.

Assets that must meet the conditions of the Energy Technology Criteria List and which are specified in the Product List include:-

Boilers
Motors and variable speed drives
Refrigeration equipment
Heat pumps
Warm air and radiant heaters
Compressed air equipment
Solar thermal systems
Air to air energy recovery equipment
Compact heat exchangers
Heating, ventilation and air-conditioning equipment
Uninterruptable Power Supplies

The following assets are not covered by the Product List, and therefore must meet certain performance measures:

Combined heat and power.
Automatic monitoring and targeting equipment
Lighting
Pipework insulation

Environmentally Beneficial Plant and Machinery – is Plant and Machinery utilised for improving water quality and reducing water usage. The Plant and Machinery must be unused and not second hand, and must be qualifying products that appear on the Water Technology Criteria and Product Lists.

The Water Technology Criteria List sets out the environmentally beneficial technology classes, with the Product List including those assets that have been accepted as meeting the criteria of the Water Technology Criteria List. The technology classes include:-

Meters and monitoring equipment
Flow controllers & leakage detection equipment
Efficient toilets, taps, showers and washing machines
Rainwater harvesting equipment
Water re-use systems

The Energy Technology Criteria and Product Lists and the Water Technology Criteria and Product Lists can be found at www.eca.gov.uk