According to the British Government, their new energy efficiency scheme for small businesses could help them save up to £2.5bn per year.
They have launched a Call for Evidence, in which they have claimed that improving energy efficiency is one of the most cost-effective mechanisms for businesses to reduce their energy use and associated bills, while also reducing their carbon emissions.
This Call for Evidence was issued on 13th March 2019, and it must be responded to by 8th May. It sets out some possible delivery options for the scheme and asks for views.
The rationale behind the scheme is to help small businesses in their growth. SMEs are central to the UK’s economy – at the start of 2018, there were a record 5.7 million SMEs, accounting for 99.9% of UK businesses. Overall, the number of SMEs has increased by over 1.2 million since the start of 2010, and SMEs employ 16.3 million, accounting for 60% of total UK private sector employment. It’s a fantastic Government initiative.
UK Businesses are said to have ‘very low awareness’ of the benefits of energy efficiency, due to a lack of information on the topic. Furthermore, the relatively high upfront costs of installing some measures have had financial implications – something which the scheme is looking to combat. In fact, the new scheme is geared towards helping the Government achieve their target of all businesses making at least 20% energy savings by 2030.
There are three options being put forward:
Energy efficiency auctions – a voluntary auction set up by the Government targeting measures for smaller companies. They would compete on price to win funding to deliver energy savings.
Business energy efficiency obligation – a business equivalent of the domestic ECO scheme.
Increasing finance accessibility – an initiative whereby the Government could explore support from financial institutions or partner organisations.
There is a considerable level of energy efficiency abatement potential available for SMEs, but there are significant and persistent barriers preventing action. Most SMEs do not have the time to engage with this issue, instead they are concentrating on delivering their day-to-day business. This means that energy efficiency rarely becomes sufficiently high priority – something which this initiative is looking to change.
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