Energy efficiency barriers costing businesses £720m in potential cost savings

Many businesses are exploring ways to improve energy efficiency through heating and boiler upgrades, but don’t feel that Government incentives or external audit advice are adequate enough, with research warning that they could miss out on around £720m in energy savings annually.

Energy efficiency barriers costing businesses £720m in potential cost savings

Many business and households are unsure of when their boilers were last checked

A new Cebr report ‘Powering Energy Efficiency’ published today (22 November), created in collaboration with Grundfos, surveyed 2,000 UK residents and 500 business owners to gain an understanding of how they are dealing with the cost of living crisis.

It found that 14% of businesses have either never had a boiler service or have not had one in the last five years, which could add to the energy costs of the winter. That’s despite three-quarters of business owners stating they are interested in making their heating system energy efficient, while more than 50% claimed they want to focus on energy efficiency to tackle the costs associated with the energy crisis.

The report notes the barriers to energy efficiency upgrades. Just 37% of businesses cite checking eligibility for business grants as a key measure, while 33% believe that government incentives are needed to help fund heat upgrades. Additionally, 32% claim they would seek advice on how to improve energy efficiency via an energy audit.

Rather than investing in energy efficiency upgrades, businesses are promoting other methods to save on costs. One-third of surveyed businesses have shifted to a remote working model of sorts to save on energy, while 26% claimed they would consider reducing employee wages in order to recoup costs lost due to the energy crisis, and 15% have already resorted to this measure.

Grundfos claim the business would be able to save around £720m in annual energy savings by overcoming the barriers to energy efficiency improvements. When households are also accounted for, more than £3.1bn could be saved across the UK.

Grundfos’ UK country director Glynn Williams said: “At a time when the UK faces a precarious economic outlook, homes and businesses cannot afford to be losing out on more than £3.1bn in energy efficiency savings. Yet, there is a clear gap between the barriers and benefits that must be overcome.

“Whilst there is plenty that the Government can and should be doing, particularly around regulation and enforcement of energy saving measures, there is clearly a large gap in knowledge that must be addressed. We, therefore, call on the Government to launch a public awareness campaign that will finally dispel the damaging myths around energy efficiency improvements and lead to the cost savings our households and businesses deserve.”

The report also found that 52% of businesses are most concerned about rising energy prices, which ranked above inflation (49%) and reduced consumer spending (35%).

In regards to household energy efficiency, almost two-thirds of people are most concerned about the rising costs of energy this winter, followed by boiler breakdowns (25%) and blackouts (22%).

The report finds, however, that 12% of people don’t know when they last had their boiler services, with 23% unsure as to when their system was last checked for potential efficiency upgrades.

Additionally, more than 25% of people in rented accommodation are sure if their heating systems have been checked, despite 70% wanting to make their living arrangements more energy efficient. However, 43% feel they can’t make changes as they’re not responsible for the heating systems.

The findings chime with warnings earlier this year that the Government’s proposals for decarbonising heat and buildings in line with long-term climate targets were not ambitious enough – and that its approach was alienating and confusing the general public.

The BEIS committee warned, as trade bodies and environmental NGOs have argued repeatedly, that the level of funding and the targets for technology roll-outs detailed in the Strategy are not in keeping with the Government’s own commitments. For example, the Government has committed to delivering 600,000 heat pump installations annually from 2028, but the Strategy contains grant funding for just 30,000 homes.

edie Explains low-carbon heating

What is net-zero carbon heating? Why is net-zero carbon heating important? What are the different forms of net-zero carbon heating? What are the business benefits of net-zero carbon heating? This explains guide answers all of these questions and more.

Currently, fossil fuels dominate heating, so transforming how heat is generated in both homes and businesses is an urgent challenge. According to National Grid, around 85% of households use gas for heating, making it one of the most important sectors to decarbonise.

Whether your organisation is looking to deliver key infrastructure work across the UK or hoping to decarbonise the heat it uses for its operations, this guide lays out all the key considerations and recommendations.


Comments (1)

  1. Philip Aspinall says:

    “External Audit advice is inadequate” – so why is ESOS still required? Companies and Business are expected to waste valuable money on yet another report on carbon emissions and savings potential. Consultants and sales basing heat pump efficiency on a COP of ‘up to 5’ or 500% efficient compared to a condensing gas boiler at 105%. No wonder these external consultants are being doubted. Lots of these companies need LED lights and a boiler service which includes pumps that probably need a VSD – keep it simple stupid!

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie