The Government stated in Budget 2007 that it wanted to encourage investment in SRF combustion capacity by offering more generous tax allowances. The scope of the ECA regime has now been expanded to include certain additional items of capital equipment.
The ECA scheme allows businesses to write off 100% of their investment in those energy saving technologies that are listed in the Energy Technology Criteria List (ETCL) against the taxable profits of the period during which they make the investment. ECAs are claimed in the same way as other capital allowances on the Corporation Tax Return for companies and the Income Tax Return for individuals and partnerships. One of the qualifying technologies is GQ CHP plant and equipment.
For the purposes of CHP, ECAs are available where the main intended business will be to provide heat and power for clearly identified users on site or to known third parties, and not to generate power for sale to or via unspecified third parties. Thus ECAs will not be available for companies whose core business is electricity production, insofar as they use the CHP system to produce electricity to be sold to unknown end users.
The SRF-related equipment eligible for ECAs is set out in the ETCL. The role of the CHPQA certificate in the overall procedure for CHP schemes applying for ECAs including those firing SRF is described in Guidance Note 4215.
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15 https://www.chpqa.com/guidance_notes/GUIDANCE_NOTE_42.pdf