Government unveils potential efficiency scheme for small businesses

The government has revealed that small businesses could assist in the saving of £2.5bn per year through a proposed energy efficiency plan.

A call for evidence has been opened by the government, which is open until 8th May 2019. This will examine a number of proposals for a new Business Energy Efficiency Scheme focused on SMEs, after Chancellor Philip Hammond’s announcement during his Spring Statement speech.

SMEs account for 99% of UK business and are said to have a “very low awareness” of the benefits of energy efficiency due to a lack of information and access to finance as well as the high upfront costs of installing some measures, which have led to them missing out on the savings.

The new scheme is expected to help towards the government’s target to ensure all businesses make energy efficiency savings of at least 20% by 2030.

The Department for Business, Energy and Industrial Strategy (BEIS) is proposing three possible options, including energy efficiency auctions, a growing access to finance options and a business energy efficiency obligation (EEO).

The auctions would involve the government setting up voluntary auction targeting measures for smaller companies, which would then compete on the basis of price to win funding to deliver energy savings.

The business energy efficiency obligation (EEO) would act in a similar fashion to the domestic ECO scheme, under which suppliers must fund the installation of energy saving measures in households. This would require an obligated party to deliver a set amount of energy savings a through measures such as insulation.

The government could also explore the expansion of access to finance options, which would involve support from financial institutions and/or partner organisations.

A spokesperson from BEIS said: “Through the modern Industrial Strategy, we’re creating the right conditions for small businesses to thrive and exploiting the global shift to clean growth.

“These proposals could help firms from hairdressers to pubs save up to a total of £2.5 billion a year on their energy bills through energy efficiency measures while reducing emissions – a win-win for the environment and the UK’s dedicated entrepreneurs.”

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