New report shows uptick in post-Brexit efficiency investment

Large-scale energy efficiency projects have become more popular with businesses post-Brexit, according to the latest Energy Efficiency Trends report from EEVS Insight.

The quarterly report, supported by Bloomberg New Finance, finds that over half of respondents are undertaking projects over £100,000, rising from 27 per cent in the first quarter of 2016.

Suppliers have also seen a significant increase in orders in the third quarter of this year, with none having reported any £100,000 orders in quarter two of 2016.

High efficiency lighting retained the top spot in terms of investment in individual technologies, however Building and Energy Management Systems (BEMS) were used within 43 per cent of the projects undertaken by consumer-side respondents in the last six months.

Confidence in the government’s management of energy efficiency policy has dropped to its lowest level since the survey began, which the study indicates could be influenced by a recent decline in sentiment regarding the government’s management of the wider economy.

Ian Jeffries, Director of Advisory Services at EEVS, states that in the run up to the Brexit vote, uncertainty and a prudent ‘wait-and-see’ attitude contributed to particularly low levels of consumer spending within the sector.

“Today, in a post-Brexit environment, uncertainty in relation to the economic impacts of Brexit look to have precipitated an increase in spend,” he said.

“In the short term, this will of course be tremendous news for suppliers, but such volatility does point to the prospect of bumpy ride in the months and years to come as the political and economic realities of implementing a form of Brexit crystallise within the energy efficiency marketplace.”

Payback expectations have continued to loosen, with the report estimating an average (median) reported payback of almost 4 years. Quarter three of this year saw the largest volume of projects within the 3-5 year payback banding. By contrast shorter payback projects of up to three years continued to contract.

Amongst energy efficiency suppliers responding to the survey, supply-side industry confidence recovered slightly from the previous quarter but remains in negative territory.

The market monitor, which combines trends in supplier order books, staffing levels, sales prices and government action, improved from -38 to -14 points, which the paper suggests could indicate a relaxation from the initial shock of the Brexit vote.

Richard Singleton, Group Strategic Assets Director at Bellrock, commented: "Brexit has undoubtedly created uncertainty.  As a provider of property and facilities management services we are seeing a renewed focus on cost savings, particularly for those organisations affected by the adverse exchange rates.

“Energy is one area where organisations can reduce overhead costs and deliver straight to the bottom line."

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