Voltex Lighting, with the full support of Eskom, has sought innovative ways to reduce
electricity demand by replacing inefficient lighting systems with new energy-efficient
lighting systems. Their solutions can be upgraded to the extent whereby entire buildings
can be managed to maximize energy efficiency.
Voltex Lighting a highly experienced Esco, will where applicable still present projects for Eskom DSM approval, but the introduction of the Voltex Lighting Rental Solution now allows companies to immediately benefit in terms of the energy savings offered.
1. WHY OPERATING RENTAL?
• Operating rental enables you to obtain cutting edge technology today and maintain the edge through upgrades as technology changes.
• You have the added advantage of securing current pricing.
• The implementation of the lighting technology will ensure savings on your electricity bill which can be offset against the rental payments.
• The annual increase in the rental agreement is agreed upon upfront and not subject to unknown inflationary and infrastructure increases. (i.e. It is expected that the operating expenditure in respect of electricity costs from Eskom will double over the next 5 years)
2. WHAT IS AN OPERATING RENTAL?
• An operating rental is, as its name suggests, a term payment plan, but classed as an operating expense. This means no requirement for capital budget by the board of directors in respect of the capital amount due for the equipment, if an operating budget is in place for the operating expenses of the company.
• Thereafter, if a company has an existing expense of say R840 000 per annum for electricity, they can redirect this expenditure to the rental of efficient lighting. The cost saving on the lighting will offset the rental without the company incurring additional expenditure.
3. IS THE RENTAL TAX DEDUCTIBLE?
• As with any expense in a business, the monthly/quarterly rental is 100% deductible from the company’s before tax income.
4. WHAT DOES ‘OFF-BALANCE SHEET’ MEAN?
5. WHAT ARE PAYMENT PLANS?
• Rentals are tailored to the customer and not the customer to the rental. This means that with the effective use of payment plans, we can maximise operating budgets.
• For example, if a company has budget that must be utilised in a specific period, a lump sum, fully tax deductible rental can be paid with reduced rental payments thereafter.
• Similarly, if sufficient budget is available, a reduced rental period can be applied.
6. VAT PAID MONTHLY?
• Because an operating rental is an expense to the company, VAT is raised as the rental payment is raised and not added to the capital value. rental solutions.indd 206 2008/10/22 11:02:17 AM RENTAL SOLUTIONS FAQ 207
7. UPGRADE OF TECHNOLOGY?
• This is one of the most important features of an operating rental. Once the Master Rental Agreement is in place, schedules are signed for the equipment supplied.
• This means that as technology improves, or if a phased approach to upgrading old technology is required, transaction schedules to the master rental agreement are signed.
8. WHO QUALIFIES?
• Given the nature of the equipment supplied by Voltex Lighting, only undoubted customers will be considered for the Rental Solution at this stage.
9. WHAT IS REQUIRED?
• A rental application giving the company’s details is required in terms of the Access to Information Act before a rental transaction can be assessed.
• Any additional information required will be done on request, as, given the target market for this product, most information required should be publicly available.