According to the latest report from the Federation of Small Businesses (FSB), government help is required to help SMEs green up their business energy.
Concern about going into the red is the major stumbling block to many SMEs otherwise keen to go green.
An expansion of the existing loan scheme for small businesses and creating more incentives for firms to make their buildings greener are just two of the FSB’s recommendations to help improve business energy efficiency. The Government needs to look at these schemes in order to meet the UK’s tough carbon emission reduction targets, says the report.
The UK is committed to reducing its carbon emissions by 20 per cent by 2020 and the report, ‘Making sense of going green – small businesses and low carbon economy’, looks at the many opportunities which will enable small businesses to play their part.
According to the FSB, economic viability is the key to encouraging small businesses to turn over a new, greener leaf. Many small businesses appreciate the benefits to be gained from green investment and wish to achieve more efficiency (and thus lower costs) for their business electricity and gas. But the level of upfront investment required is putting them off.
At the moment, a zero per cent loan scheme is available to small businesses in order to buy energy efficient equipment. This scheme runs on a ‘pay as you save’ basis, meaning there is not an upfront cost to be met and SMEs can see a genuine cost saving through business energy efficiency. The FSB wants this scheme to be reformed and expanded.
At present, 47 per cent of the UK’s carbon emissions come from buildings. One problem for businesses is that 44 per cent of SMEs rent their premises, and with many leases of less than five years, neither business nor landlord will see the benefits of making the building as energy efficient as possible. That’s a real disincentive and to tackle it the FSB recommends:
Incentivising private sector providers (banks, energy or construction companies) to pay the upfront costs of major building energy efficiency upgrades
Guaranteeing ‘pay as you save’ repayments through energy bills – by linking the responsibility of repayment to the building would help overcome the landlord/tenant divide
Supporting new business owners to green their buildings by encouraging firms in the worst G-rated buildings to take steps to move to an F-rating
Not penalising those who increase their rateable value through greening their premises by waiving the increased business rates.
For advice on saving on your business energy costs, contact Energy Advice Line.
Read the full report on the Federation of Small Businesses site