Air
control products ventilation system
Food Industry Technical Ltd - Intelli-Hood Rental Plan
• Intelli-Hood from FIT provides
significant energy savings for our clients but requires an
initial investment. Often the lack of capital budgets means that
these potential savings are not achieved or are delayed.
• In recognition of this FIT has put in place arrangements
through Energy Saving Rental Specialist Sunrise Global Finance
to offer Intelli-Hood on a very cost effective long term rental
basis.
• Typically the rental agreement is for 5 years, and it is
structured as an operating lease. This means that the accounting
treatment is “off balance sheet” with the rental payments coming
out of the same operating budget as is benefiting from the
energy savings. (N.B. This is not the same as a finance lease or
HP agreements which are both accounted for on balance sheet.)
• With the rental plan not only does the client avoid the need
for capital investment but pay back is immediate.
Example
Energy saving potential of £10,000 a year has been identified at
a client’s site but an initial investment of £20,000 is
required. i.e. there is a 2 year break even on a capital basis.
But there is no capital budget available for this in the current
year, and the earliest this could be put in place is in six
months. This delay is effectively costing the client £5,000 in
lost energy.
However under the rental plan the client can immediately install
Intelli-Hood on a rental of £4,500 a year. This is paid out of
operating budget and is more than covered by the £10,000 a year
saving in the same budget.
So instead of a capital project which achieves a two year pay
back, the proposition becomes simply one of saving £5,500 per
annum in energy costs.
• The rental plan is specifically designed to encourage upgrade
of the technology in order to maximise energy savings and FIT is
always looking to develop even more effective savings devices.
At any time during the initial rental period the client may
exchange/ upgrade the products by rolling forward their
agreement at that time.
• Conversely if no roll forward has been effected, at the end of
the initial rental period the client has the option of canceling
the rental, or of continuing to rent, or of buying the
installation, at its “fair market value”, typically 10-15% of
the initial capital cost.
• The rental plan is offered subject to credit status.
Summary
Achieve immediate energy savings with Intelli-Hood without up
front capital investment. The rental agreement qualifies as an
operating lease and hence accounting treatment is off balance
sheet. The rentals are paid out of the savings in the operating
budget and the result is cash positive from the start. The
technology may be upgraded as it becomes available to maximise
ongoing energy savings.
Email:
claire.diffin@foodindustrytechnical.com