Businesses missing out on £1.6bn energy efficiency benefits

Businesses across the UK are collectively missing out on savings of £1.6 billion by failing to invest in energy efficiency measures, according to a report by the Westminster Sustainable Business Forum and Carbon Connect.

The report said that businesses are missing out on “significant benefits, such as reduced energy bills, increased competitiveness, and improved worker productivity, because they are “unable” to undertake the energy efficiency improvements due to “significant barriers”.

These barriers include a lack of available upfront capital to invest in energy efficiency measures, and a lack of knowledge and understanding of the schemes and mechanisms available to help them improve their energy efficiency.

One solution put forward in the report is for the UK Green Investment Bank to fund a non-domestic subsidiary of the Green Deal Finance Company, under guarantee from the Treasury.

This could then offer low interest loans to small and medium sized businesses to help stimulate the energy efficiency market.

To overcome “split incentives” for commercial landlords to improve the energy efficiency of their buildings, the report called for strong penalties for non-compliance with minimum EPC standards.

It also urged the government to extend the length of time that landlords can receive empty property rate relief from Local Authorities to 12 months to allow landlords to make energy efficiency improvements to their buildings in the void period between former and incoming tenants.

Co-chair of the inquiry, Oliver Colvile MP, said: “The need to increase the resilience of our businesses against the threat of climate change, and energy price volatility could not be greater.

“The obvious cost savings, coupled with improved productivity that can be released form energy efficiency, makes it quite clear that now is the time to invest on a large scale.”

Fellow co-chair, Lord Whitty, added: “This report shows clearly a worrying lack of understanding across the UK commercial sector of both the benefits of improved energy efficiency and the ways in which companies can finance and engage in improvements.”