Green technology and hire rate implications
7 February 2022
Talking to a number of tool hirers and manufacturers about battery powered equipment recently, a common theme was the idea of hiring out such products in new ways.
It basically boils down to the cost of the new environmentally friendly technology and how hirers can achieve a fair return on the products that contractors and end users will increasingly have to adopt in order to meet new regulations.
If the new, green solution costs twice as much as its fossil fuel equivalent, then the hire rate must surely reflect that.
However, as has been pointed out frequently, unless some kind of scrappage scheme is introduced – which seems unlikely – older equipment will remain in fleets for some time, especially if it is relatively young and has yet to achieve the right return on investment.
Recognising this, some customers might well ask for a fossil-fuel powered machine with a lower hire rate instead of the newer eco-friendly one, unless they are forced to meet carbon emission regulations.
“Hirers have to get the right rate,” said a sales rep from one power tool manufacturer. “The body alone of a new eco-friendly tool, without the battery, will typically cost as much as the equivalent petrol model and the battery is as much again on top. Charging the same hire rate as before just won’t add up.”
One approach is to emphasise that there are actually significant differences between the two.
“There are added benefits for the operator, site manager and hirer. Having no engine means no fuel to buy and store, no mixing with oil, no leakage or spills, reduced maintenance, fewer parts to stock and less strain on workshops. And some hirers and contractors grasp this immediately.
“Some rental rates will have to go up and perhaps some hirers will treat the hire of the battery separately, as if it was the supply of fuel. The tool body would be one element of the hire rate and the battery another. Some hirers that I’m talking to are exploring this concept.
“It’s like charging separately for petrol or diesel that the customer would previously have paid for separately anyway.
“And there is growing interest in green equipment. The number of enquiries we are getting from larger contractors is rising sharply, particularly from those working in urban areas with low or ultra-low emission zones in place like Birmingham, Manchester and Bath, and many individual local authority inside Greater London.
“We are doing a lot of demonstrations with contractors like these who are then approaching national hirers to supply them with this equipment. As we have seen in the past in areas like new health and safety regulations, the trend will trickle down the chain to other contractors, sub-contractors, jobbing builders and the hirers serving them.
“And again there are side benefits. For contractors working alongside busy urban pavements or in residential areas, the reduced levels of emissions and noise are appreciated by passers-by and local people.”
This is an important point for hirers to remember when talking to existing and prospective customers: the new alternative can offer more than the standard product it replaces - and should be priced accordingly.
● For more of the latest Site-Eco stories click here.
