Video Interview with Novalux at Ecobuild 2012
Author: David Thomas
Published: Friday, 18 May 2012
We interview the Directors of Novalux, a new energy efficiency company, about starting up a business in an industry that’s being blown about by the feed-in tariffs and by the incoming Green Deal.
Our final interview from Ecobuild was with Jamie Vaughan and Joseph Allcott, two young entrepreneurs using their backgrounds in finance, business, engineering and sustainability to build a green energy brand, despite the turbulence of the feed-in tariffs.
Interview with Jamie Vaughan and Joseph Allcott, of Novalux - a green energy start-up
The Eco Experts interview Jamie Vaughan and Joseph Allcott, MDs of Novalux, a green energy company that’s been started up at a challenging time for the industry. Jamie and Joseph talk to us about how they’ve fared with the feed-in tariffs, and their anticipation of The Green Deal.
The Eco Experts: Well, if you could please just start by explaining a bit about the company, that’d be great.
Joseph Allcott: “Yeah - we started about a year and a half ago, predominantly in energy efficiency: we wanted to try and capitalise on the funding model we’d developed, similar to The Green Deal which is coming out in October, whereby we supply funding for energy efficient upgrade projects in particularly commercial buildings, and then you pay back the funding through the savings you’ve been creating - so it’s kind of like an ESCO model – and we started that, and obviously starting up your own business is a hard slog, and we got our first few clients: we’ve just done a retrofit project manufacture distribution unit down in Wales.
“They supply horse feeds, all sorts of products for horses essentially. They had about a 60k square foot unit, and we went in there, audited the place, developed a load of solutions and upgrades for them that’s going to produce them energy. That came down to lighting, heating, insulation, building controls… And that saved them almost 50% on their energy bills, and they were spending about £30k per year on energy so we saved them around £15k.
“And on top of that, because we got MCS accredited come middle to late last year they were very interested in a solar PV system. It worked perfectly with what we’d just done so we installed a 50kW PV system on their roof and they’re generating about £10k per year in income from that and effectively kind of off-set the whole bill – well, £5k, they’re probably paying around about that.
“So that’s kind of a typical case study of where we’re at and what we’re doing and, yeah, it’s been really, really good. Especially as of late it’s started to pick up, just because I think once you begin to get traction for a young company, the hard thing is getting that first… getting over the line, getting that first deal. Just because without the experience you explain to people what you’ve done, albeit you’ve got a great idea, it’s kind of difficult to say, ‘Hey!’… Most people go, ‘Great, fantastic, but errr…. What’ve you done?’
So now that we’ve got traction it’s starting to just balloon, which is really good for us, really great.”
The Eco Experts: Well I suppose it’s been quite a turbulent first year: if ever you were going to start a company in this industry, with the feed-in tariffs I suppose going up and down, and yo yo-ing all over the place. Did you find that was a bit of a worry for you guys?
Jamie Vaughan: “Well, I can tell you what… We actually got accredited in October and (this is not a lie at all!) – that when we got accredited we went out to celebrate that morning, you know the assessor had come round. He'd said, ‘I’ve got to go and do the paperwork and you’ve passed.’
“We go out and have a bit of a celebratory drink, get an email through about the leaked documents of the feed-in tariff changes - that morning! Literally as we were celebrating! – going, ‘Oh Christ, can’t believe this… the feed-in tariff’s just been cut!’
So it was a bit of a shock to the system but actually it still works. I mean we knew the feed-in tariff was going to be cut, we didn’t know when. It needed to be cut. I guess it was anybody’s guess as to how much it was going to be cut by but it was a bit of a shock that it was a 50% cut.
“But it still works. You know, the manufacturers have cut their prices, the tariffs - well I guess the returns - were getting slightly extortionate and were extorted, and they’ve come down to sort of reasonable amounts. I mean we’re still getting, for our commercial clients, between sort of 10-13% returns so, you know, depending on their roof orientation and pitch and just a few other bits ‘n bobs, yeah it can still be right up there, and we’re still pretty competitive so…
Joseph Allcott: Again obviously you’ve got August and the feed-in tariff going down again, so… And we’ve spoken to a lot of our suppliers and manufacturers and they’ve been running at losses really. So we can’t really expect much more reduction in the price of manufacturing of the panels and the inverters. It may even go up, so if the feed-in tariffs are coming down prices are maybe going up so there’s going to be a squeeze and it’s going to be more difficult come August.
“Again, when you’re in energy efficiency… So we’re looking to capitalise on The Green Deal when that comes out. In fact when we first started out we had our eyes on The Green Deal, and we’ve just had our eyes on it for 2 years now! Just waiting waiting waiting… Yeah just really anticipating some good things from it, with any luck.”
The Eco Experts: And where can people find out about Novalux? Do you have a website?
Joseph Allcott: Yeah come and check us out on our website: www.novaluxenergy.com and yeah, come and check it out. It tells you exactly what we do, the different sides of the business that make energy and save energy… and yeah – hopefully you’ll see us in more places in the future!”
Many thanks to the boys at Novalux for granting us this interview.