SMEs overwhelmingly support energy efficiency

New research by the Federation of Small Businesses (FSB) has found overwhelming support for energy efficiency among small firms – with nine in 10 (90%) seeking to be more energy efficient in their own business. The FSB is calling for energy companies to offer greater upfront and ongoing energy efficiency support and investment to their small business customers.

The research found that four out of five (78%) FSB members questioned listed saving on energy costs as a motivator for carrying out energy efficiency measures. But the research also uncovered a growing trend for factors other than simple cash savings which are driving investment forward. Seven out of 10 (70%) small businesses said protecting the environment was an important motivator for action, while a quarter highlighted improved energy efficiency as a way to attract customers and help promote their business.

Smart meters will be a vital tool for giving small businesses the information they need to make the right decisions on energy use. The FSB has called for the hardware roll out to be supported by an ongoing package of information and support from energy companies.

John Allan, National Chairman, Federation of Small Businesses, said:

“Small businesses are really enthusiastic about energy efficiency and this desire should be capitalised on for the good of their business and the environment. However, what our research does tell us is a simple ‘one-size fits all’ approach will not work as different businesses are driven by a diverse range of factors.”

Looking at the action taken by small businesses, three fifths of small businesses (58%) said they had already taken small steps towards energy efficiency, such as installing energy efficient lighting and equipment. However, many said they were prevented from going further by a number of obstacles which include: not owning the premises where they operate (45%); a poor understanding of the options available (20%); and a lack of capital to invest (29%).

Timely return on investment was also seen as an important issue. Well over half of those surveyed (55%) said they would require a return on their investment within two years – with two fifths (39%) saying they would require a return within one year.

Two in three (60%) small firms suggested that enhanced tax relief would encourage them to become more energy efficient but many are not aware of support already available or find it hard to navigate. Small business also gave their backing to energy companies providing more support on how to consume less energy. Longer energy contracts in return for improved support and advice from energy suppliers were broadly supported by nine in ten (89%) of the companies questioned.

John Allan concluded: “The energy market will continue to fail small firms until it can help businesses reduce their energy consumption, as well as their underlying unit costs.

“There are several initiatives in place to help businesses become energy efficient, including the Green Deal. But Government and energy companies need to do more to understand the different circumstances and motivations of small businesses to help promote further action on energy efficiency.

“Most small businesses are on fixed term energy contracts, with a quarter on domestic tariffs. We want to see energy companies and Government come forward with innovative and targeted initiatives which reflect the diverse nature of small firms, and helping to reduce their consumption. For instance, if energy companies incorporated a support package with longer contracts then this might be one economically viable way for businesses and energy companies to work together to achieve a mutually beneficial result.”

The FSB is the UK’s leading business organisation with around 200,000 members. It exists to protect and promote the interests of the UK’s Real-Life Entrepreneurs who run their own business. More information is available at www.fsb.org.uk and follow on twitter @fsb_policy

On behalf of the FSB, Verve surveyed 1077 FSB members in January 2015 to better understand how to help small businesses become more energy efficient. Full details of this research are available from the FSB press office upon request.