500 companies apply for energy efficiency grant, with many from food services sector

Founder Alan Tan of Rasel Catering Singapore, which saw a 40 per cent jump in its monthly electricity bill. PHOTO: ST FILE

SINGAPORE – Nearly 500 companies have applied for the Energy Efficiency Grant since it was launched on Sept 1, 2022, with more than half of them in the food services sector.

The grant provides local companies in the food services, food manufacturing and retail sectors with up to 70 per cent of financial support to invest in energy-efficient LED lighting, air-conditioners, refrigerators, cooking hobs, water heaters and clothes dryers.

Support for qualifying costs will be capped at $30,000 per company a year.

It was announced during the Budget debate in February that the grant, administered by Enterprise Singapore and slated to end on March 31, 2023, would be extended for a year till March 31, 2024.

This is to help businesses cope with higher electricity prices and a transition towards a low-carbon future.

Minister of State for Trade and Industry Low Yen Ling told Parliament last Tuesday that the majority of applicants are micro, small and medium-sized enterprises (SMEs) with annual revenue of less than $1 million.

Mr Alan Tan, founder of Rasel Catering Singapore, said the extension of the grant is timely. His monthly electricity bill jumped by about 40 per cent from $14,000 to $20,000 after his company switched power retailers in July 2022.

The company is keen on tapping the grant to offset part of its electricity bill and will be studying the cost-effectiveness of using more energy-efficient refrigerators and LED lights.

“We also need to make sure that existing electrical appliances are ready to be phased out, so that we can justify the additional costs of purchasing new ones,” Mr Tan said.

Given that many companies are focusing on attracting customers back and recouping their losses from Covid-19 and that business has more or less returned to pre-pandemic levels, he noted that it is apt to start looking into cost-cutting, energy-saving measures. 

Mr Chan Wei, managing director of Pine Garden’s Cake, said it had already switched to LED lights prior to the grant’s launch.

When asked if he will tap the grant for other electrical appliances, he said he found the grant to be “too restrictive” in its scope of eligible items and that the application process would be too much of a hassle.

“It doesn’t shift the needle much, given the marginal cost savings. Businesses are already losing money due to the rapid increase of electricity prices,” he noted.

He felt that more direct support such as subsidising the electricity bills of businesses could be helpful, apart from including more commercial equipment in the list of eligible items.

Mr Kurt Wee, president of the Association of Small and Medium Enterprises, said that while the cost-saving impact of the grant may not be huge, incentivising companies to go for energy efficiency could help nudge them towards reducing their carbon footprint and achieving longer-term sustainability goals.

With rising energy costs affecting many businesses today, he felt that the grant could be extended to more businesses in other sectors.

Ms Low said in Parliament that the grant complements the Government’s “wide range” of initiatives. For instance, the National Environment Agency’s (NEA) Energy Efficiency Fund supports businesses in the manufacturing sector, while the Building and Construction Authority’s Green Mark Incentive Scheme for Existing Buildings 2.0 covers building owners.

The Resource Efficiency Grant for Emissions, run by the Economic Development Board, targets emissions-intensive facilities such as manufacturing facilities and data centres, she noted.

On top of grants, the Energy Efficiency Technology Centre, a collaboration between NEA and the Singapore Institute of Technology, aims to help SMEs make informed decisions on the measures they can take to achieve their goals.

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