Could your business afford for your refrigeration equipment to stop working and not be able to be fixed?
If you don’t have a plan for your R22 Gas replacement then you’re risking your business – as this situation could become a harsh reality sooner than you think.
Here David Allan, Design and Installation Manager at ACE Refrigeration in Glasgow, explains why.
The use of virgin R22 gas is already prohibited and the use of recycled and/or reclaimed gas will be prohibited after 31 Dec 2014. With gas suppliers are already running down stocks of the recycled and reclaimed R22 gas in anticipation of the deadline, its scarcity and price are already having an impact. Just recently the Guardia Civil arrested and charged 97 people allegedly involved in the illegal trade in more than 150 tonnes of R22 refrigerant in Spain.
Thankfully, there is little need for such drastic action in the UK. There are ultimately two main options available to customers, large or small, dependent on the age and state of their equipment.
In the last 10 years, few refrigeration companies will have installed R22 equipment as even before the new legislation was announced, it was widely recognised that changes were likely. However for equipment installed 10 or more years ago, R22 has been the predominant refrigerant used.
If your equipment isn’t too old and has been well maintained, you could look at decanting the R22 from your existing system and safely disposing of the refrigerant. The system can then be converted to make it compatible with a replacement refrigerant. While this offers businesses a reduced capital outlay compared to full replacement, the downside could be that no replacement refrigerants offer an exact match to the thermal properties of R22 which could result in reduced capacity and/or efficiency.
The second option is to replace existing R22 equipment with a new system which is compatible with modern refrigerants. The obvious benefits of this include a significant reduction in energy consumption from the use of modern equipment as well as reduced maintenance costs and an increased service life over a refrigerant conversion, protecting you from increased breakdowns and potential impact on product quality or stock loss.
While this option means a larger initial capital outlay, this can be offset by the benefits.
As well as complying with the legal requirements of the legislation, replacing tired and inefficient equipment can have a major benefit on your bottom line - some of our recent installations have had a payback period of less than two years based on the energy savings received; some customers have saved up to 25% off their energy bills. And with energy costs on the rise, this is the ideal time to take action.
For some of our customers in the UK, we have been able to help secure substantial grant funding in the fish and seafood industry for the replacement and renewal of outdated plant.
The Enhanced Capital Allowance (ECA) scheme also has a list of products on its Energy Technology Product List (ETPL) which have been measured for their energy efficiency. Capital allowances enable businesses to write off the capital cost of purchasing new equipment against their taxable profits.
Normally the general rate of capital allowance is 18% a year on a reducing basis but if a business invests in new equipment from this list then it could claim an Enhanced Capital Allowance, giving a one-off 100% tax relief in the year the investment is made.
The key is to consider the capital cost and operational costs of each option before making a final decision. And if you take the right course of action for your business, you may ultimately reap long term benefits for your business.
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