Singapore NEA Grants For Decarbonization Projects - Are they worth it?

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In this article, we will focus on the National Environmental Agency (NEA) and the grants it offers to support decarbonisation projects in Singapore.

For a complete list of NEA grants and funds click here.

At Centropi, we specialise in manufacturing investment-grade light fittings and

You might not need light fittings but we want to help businesses decarbonise, which means providing understandable, accurate information on how to fund LED lighting upgrades in large-scale real estate.

Help Me Decarbonise!

Why do the grants exist?

There are more than 60 statutory boards in Singapore. They are set up to contribute to the well-being, development, and prosperity of the country and its residents.

The grants offered by each board are there to encourage people or businesses to take action in a specific area important to the government.

Through an application process, it is possible to obtain “free” money from the government to undertake certain activities.

What is the NEA trying to encourage?

Lighting makes up around 18% of total energy use in commercial buildings in Singapore. Reducing this is a part of the government's aggressive environmental targets set out in the Green Plan.

Under the Energy Reset - Infrastructure and Buildings section, there are two main targets to achieve by 2030:

  • ​​80% of new buildings (by Gross Floor Area) to be Super Low Energy buildings from 2030
  • Best-in-class green buildings to see an 80% improvement in energy efficiency (over 2005 levels) by 2030 long term target:

Businesses need to play their part to hit these targets, but upgrades come at a cost. The NEA is offering these grants to help businesses reduce the cost implications while also pushing toward the 2030 target.

What grants are available from the NEA?

The NEA currently has four available funds, which is good news for those looking to lower capital requirements.

3R Fund - Read More

Call for Ideas Fund - Read More

Energy Efficiency Fund - Read More

Research Innovation and Enterprise (RIE) Funding Initiatives - Read More

For this article, we will focus on the  Energy Efficiency Fund (E2F)

What is the E2F?

As you might have guessed, the E2F fund targets energy efficiency projects.

It is an umbrella scheme consisting of 5 different grants to support businesses with industrial facilities to improve energy efficiency (EE)

(Source: NEA) - How the Singaporean Government are incentivising decarbonisation

The five grants are as follows.

#1 Energy Efficient Technologies

The Energy Efficient Technologies grant supports companies to adopt energy-efficient equipment or technologies. The grant supports manufacturing companies to upgrade their equipment ahead of the carbon tax increase.

Click here for more information

#2 FUNDING CEASED - Low-Global Warming Potential (GWP) Refrigerants Chillers

The Low-GWP Refrigerants Chillers grant supports companies in adopting low-GWP refrigerants for water-cooled chillers. Funding support for new applications will cease with effect from 1 October 2022.

Click here for more information

#3 Energy Management Information System (EMIS)

The Energy Management Information System grant supports companies to install EMIS to monitor and manage energy consumption in a structured manner.

Click here for more information

#4 Energy Assessment

The Energy Assessment grant supports companies to conduct detailed energy audits to identify potential areas for energy efficiency improvements.

Click here for more information

#5 Resource Efficient Design

The Resource Efficient Design grant supports companies to conduct design workshops to improve resource efficiency (e.g. energy, water) for new industrial facilities or industrial facilities with major expansion.

Click here for more information

Lighting Upgrades are Pre-approved

LED lighting upgrades are pre-approved under #1 for 70% coverage.  Upgrading your lighting to investment-grade light fittings will reduce your energy usage and using this grant will result in extraordinary ROI.  

What are the criteria?

Obviously, the NEA is not standing at their front door with an open cheque book so there are a few criteria to meet.

Your company:

  • generates less than $500M in revenue
  • is a Singapore-registered owner or operator of an industrial facility
  • has not commenced the project (i.e. the company has not signed contract(s) with suppliers).

What funding can you get?

  • Up to 50% for carrying out detailed energy audits
  • Up to 50% to conduct design workshops to improve efficiency for new facilities or major expansions
  • Up to 70% to invest in energy-efficient equipment or technologies
  • Up to 50% to install energy management information systems to monitor energy consumption.

The application is typically completed in 1 to 2 months, and funds are dispersed when your supplier invoices you.

Cash flow profile - Will the grants help with the investment?

Yes! By using the funds you will drastically reduce the required capex. Given you will be making the purchases upfront you will see your returns immediately and with a faster payback period.

Decarbonisation efforts can show immediate financial results

This sounds too good to be true - Are there any downsides to the grants?

We are taught to question everything so it is worth highlighting the pros and cons of using government grants.

Cons

Competitive:  Free money is attractive, so grant applications can be highly competitive, with no guarantee of approval.

You will have to fill in forms: The application process can be time-consuming and you may need to submit lots of documentation.

You have to have your ducks in a row: Meeting grant requirements and reporting standards can be demanding, adding administrative overhead.

Pros

Money helps: Grants provide you with cash, which reduces your financial burden.

Stimulate Innovation: As mentioned above, people will put off projects because of a lack of capital. Therefore government grants often encourage the development of new technologies and approaches in the energy sector.

It’s good to talk about: Securing a government grant can enhance a project's credibility and positive public perception. It can be used as a great marketing piece for your company.  

Get your cash quicker: The NEA in Singapore has recently streamlined the grant application process.  Several technologies are pre-approved (e.g. LED) and they have removed the requirement to show energy audits. The current (as of sept 2023) application process is now 1-2 months.

Singapore Public Utility Board (PUB) Grants

As an aside the PUB also has grants available. Albeit not specifically energy efficiency, lowering your water consumption will inherently lower your carbon footprint.

PUB Water Efficiency Fund (WEF) - Read More

The Industrial Water Solutions Project Unit (IWSPU) - Read More

So, are the NEA grants worth it?

100% yes. If you have funds allocated for energy-efficiency upgrades then assuming you meet the criteria these funds are a great way to improve the financial gains.

Even if you were not considering the energy-efficiency upgrades you may find that after the theoretical discounts are applied you can generate savings and free up cash in a matter of months.

Ready to take the plunge?

Ivan has helped many clients decide on the most suitable funding method for their energy efficiency projects as well as calculating the financial gains. Reach out to him to find out more.

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