Ignorance and finance hampering energy savings

UK businesses are missing out on cost savings worth £1.6 billion due to a lack of available finance for energy efficiency measures and leadership buy-in

A new report from the Westminster Sustainable Business Forum (WSBF) on energy efficiency in commercial buildings warns that firms, particularly small businesses, need more support to finance energy-saving measures and that there is a worrying lack of awareness of existing measures.

According to the report, a poll of firms occupying buildings managed by Centurion Properties, revealed that just 11% were aware of the non-domestic green deal.

Meanwhile, in firms where finance is available, uptake of energy efficiency measures is being hampered by a lack of skills and understanding of the commercial benefits from cutting energy consumption.

“Despite a compelling business case, the commercial sector is failing to link business growth to energy costs,” states the report. “Internal barriers stem from energy efficiency improvement not being aligned with the overall strategic goals of the organisation… and a lack of communication and buy-in in larger organisations.”

WSBF calls on the government to re-launch the non-domestic green deal without the “golden rule”, which states that the total cost of installing energy efficiency measures must be no more than the savings made on energy bills over the lifetime of the loan. The forum claims the golden rule is preventing firms from making comprehensive retrofits. It wants the Green Investment Bank to create additional funding streams for small business.

It also urges action to raise awareness among business leaders of the commercial benefits of energy efficiency, including forcing senior executives to sign off the independent energy efficiency reports produced by assessors in the mandatory energy savings opportunity scheme, due to launch in December 2014.

“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,” commented Lord Whitty, co-chair of the inquiry which produced the report.

“The government needs to be clearer about all of the non-domestic energy efficiency programmes available to the commercial sector and an energy efficiency ‘hub’ website must be created to guide senior executives through investment in energy efficiency.”

Other recommendations in the report include: national and local campaigns to raise awareness of the commercial green deal; using local enterprise partnerships to help drive installation of energy efficiency measures; and increasing financial penalties for commercial landlords that fail to produce energy performance certificates or display energy certificates for their buildings.