Technological Investments
Climate technologies are widely available in the market. However, not all of them are commercially viable and proven. Prior to investing in certain technologies, SMEs are advised to consider the listed aspects below, and always refer to the official verifiers’ sources of proven technologies.
CONSIDERATIONS
Is the technology commercially proven?
Have you heard of the technology?
Is this a mature technology with multiple commercial applications e.g. LED lighting, variable speed drive?
Is this an emerging technology that is undergoing commercial trial (electric two/three wheelers) or scale-up (e.g. hybrid cars)?
Is the technology registered on green technology directories like the MyHIJAU Mark Platform and Singapore Green Labelling Scheme Directory?
Tip : Technologies that are registered in the below technology directories are commercially proven and would have met certain energy efficiency or green performance criteria.
CONSIDERATIONS
Is the technology commercially proven?
Have you heard of the technology?
Is this a mature technology with multiple commercial applications e.g. LED lighting, variable speed drive?
Is this an emerging technology that is undergoing commercial trial (electric two/three wheelers) or scale-up (e.g. hybrid cars)?
Is the technology registered on green technology directories like the MyHIJAU Mark Platform and Singapore Green Labelling Scheme Directory?
Tip: Technologies that are registered in the below technology directories are commercially proven and would have met certain energy efficiency or green performance criteria.
Climate mitigation
Technologies with low-carbon or high energy efficiency
Climate adaptation
Technologies that protect businesses against the physical impacts of climate change
CONSIDERATIONS
What is the upfront capital expenditure (CAPEX) requirement for the technological investment?
What is the dedicated budget for technological investment (e.g. energy efficiency or renewable energy)?
Are there any existing rebates and incentives to alleviate the upfront cost?
Are there energy efficiency financing options?
What is the payback period of the technological investment?
The payback period is the amount of time it will take you to recoup your original investment in the project. Below are the steps to calculate the payback period of your investment.
Step 1
Determine the Total Project Cost
If installing a LED lightbulb costs $20, and a company needs to retrofit 25 existing lightbulbs with LED lightbulbs for a 100 sq-metre retail store, the total project cost will be $20 × 25 LED lightbulbs = $500
Step 2
Calculate Annual Savings
If the monthly savings from the retrofit is $50 (based on the difference of the electricity bill before and after the retrofit), the total annual savings from the retrofit is $50 × 12 months = $600.
Step 3
Calculate Payback Period
The payback period will be $500/$600 = 0.83 years. This means that the capital cost is recovered in just ten (10) months from the energy saved from the retrofit.
Level of disruption
In addition to CAPEX consideration, the investment required to adopt new solutions should also consider the manpower hours required to oversee, implement, train, and integrate the necessary update to your data collection tool. This might lead to potential revenue loss in the short to medium term as the business adjusts to the new way of operating.
CONSIDERATIONS
Considerations prior to technological investments
CASE STUDY
Ampersand Gelato
Background
A woman-owned and led ice-cream manufacturer, retailer, and wholesaler operating in Bangkok. It has about 30 fridges and freezers.
Purchased a total of 4 units (1 fridge; 3 freezers) from YENERGY, an initiative of the ASEAN LCEP programme in Thailand to support F&B companies switch to energy efficient equipment
As part of the programme, she benefitted from a preferential payment plan: a 30% down payment plus the remainder paid in monthly installments over 3 years
Key reasons to join the programme
Keen to save on electricity costs – estimated at an average of 30-60% for the specific units purchased
Interested to reduce company’s greenhouse gas emissions
What she liked most about the programme
A delayed payment plan which allows small businesses to adopt new technology without a considerable upfront investment
A strong customer support to navigate questions and concerns
Key reasons to join the programme
Keen to save on electricity costs – estimated at an average of 30-60% for the specific units purchased
Interested to reduce company’s greenhouse gas emissions
What she liked most about the programme
A delayed payment plan which allows small businesses to adopt new technology without a considerable upfront investment
A strong customer support to navigate questions and concerns
Markets
Access to new markets (wider supply chain increasingly demand low carbon products and services)
Resilience
Resource diversification, use of renewable energy, climate adaptive resiliency
Quantifying GHG
