Over a third of businesses across England and Wales believe the most important thing government could do for them is provide grants towards the cost of installing energy efficiency measures, according to a new survey.
The British Chamber of Commerce (BCC), working alongside British Gas, surveyed over 2,100 businesses to find out how the government can help them install energy-saving products and found that 36% believe financial support would be the most effective strategy.
Mike Spicer, director of research and economics at the British Chambers of Commerce (BCC), said: “These results demonstrate that getting the economics of investment right for energy efficiency is crucial to promoting take-up.
“At a time when businesses face growing upfront cost pressures from other sources, grants and tax breaks have an important role to play in offsetting the cost of new energy efficiency measures. On its own, more information won’t do the job.”
Only 8% of respondents, predominantly from SMEs spread across a number of sectors, believed more information would help them. However, 15% stated that potential savings from energy efficiency measures would not be worth the cost of investment, suggesting more work needs to be done to overcome this common barrier to energy efficiency.
Speaking to Clean Energy News earlier this year, experts from across the energy management sector agreed that efficiency projects were not viewed with enough value by businesses and therefore required extra incentive support.
Alex Rathmell, managing director at EEVS Insight, said: “It’s kind of fashionable in energy efficiency circles to say you shouldn’t be dependent on subsidy, you shouldn’t be hanging your business case off a government incentivisation scheme and it should stand on its own two feet as an economically rational thing to do. But the facts think for themselves; people don’t do that.
“Organisations do not behave in an economically rational way when it comes to energy efficiency otherwise they’d be far more activity than there is. The fact is these government schemes do work and they work as a carrot or a stick or a combination of both.
As well as a lack of finance, the BCC and British Gas survey also found that property ownership acted as a key barrier to deployment of measures. More than a quarter (27%) of the businesses who rent or lease their premises feel that they have no influence over energy efficiency improvements on their site, suggesting landlords hold sway over these investment decisions.
Gab Barbaro, managing director of UK business at British Gas said: “It’s clear from this research that businesses in rented and leased premises need more help from their commercial landlords, and new regulations to tackle the least energy-efficient premises can’t come soon enough.”
Spicer agreed, adding: “Commercial landlords also need to do more to support leaseholders and renters who are looking to save money and make their energy use work for them.”
Despite the findings of the report, commercial support is likely to grow over the next two years as the industry prepares for new minimum energy efficiency standards due in 2018. New regulations will prohibit new leases on properties that fail to reach an EPC rating of E and are estimated to affect around a fifth of commercial properties.
Barbaro continued: “I’d urge all businesses to seek help from their supplier or landlord, and start with the basics. For example, by applying for a smart meter, businesses could much more accurately work out what’s driving their energy use and make considered decisions about how to reduce it.”
However, the survey also found that only 6% of businesses believe the wider use of smart meters is the most important thing that government and suppliers could do to help firms.
Non-domestic smart meter rollout is due to pick up speed this year as the government seeks to offer equipment to all business premises by 2020. However, progress in rolling out around 27 million non-domestic gas and electricity meters by this date is considered to have been slow to date, although deployment rates are not readily available.
While the government undertakes a comprehensive review of business energy efficiency policy, firms are being left to themselves to conduct improvements and lower their energy use. However, the research also found that only 13% of businesses have seen a decrease in their energy costs over the last three years, compared to 35% that have seen prices rise.
