Small businesses key to UK low-carbon transition, report claims

A tenth of UK small businesses now produce their own electricity, according to a new report which calls on the Government to make it easier for small firms to contribute to green energy generation.

Research released on Wednesday (4 January) by the Federation of Small Businesses (FSB) shows that on-site energy is produced by 12% of the 1,996 surveyed members, primarily through solar panel installations. According to the FSB, almost 60% have made changes to improve the energy efficiency of their business. Efficient light installations represent the most popular measure, having been undertaken by 40% of small businesses.

The report highlights that, with improved incentives and fewer barriers, small firms can be key to closing the national carbon gap. A new carbon plan that reduces the UK’s reliance on imported energy and includes a specific strategy on microgeneration, efficiency, storage and demand response would help the small business community further invest in low-carbon solutions, the FSB states. In turn, this would help to meet carbon targets and make the UK more self-sufficient with energy supplies.

FSB’s national chairman Mike Cherry said: “The UK energy sector is facing the greatest transformation since the Industrial Revolution. But the whole system for incentivising and subsidising infrastructure lacks transparency, consistency, direction and ambition. It needs a strategic overhaul.

“The Government should produce urgently an updated carbon plan, looking specifically at small businesses as an audience. Without the input of an engaged and empowered small business community, the UK risks failing to meet its binding emissions targets.”

‘Grave concern’

FSB conducted a survey showing that 86% of its members were concerned about import dependence, while security of supply (60%) proved the biggest concern for most small businesses.

In the past 12 months, the Government has made cuts to variety of green subsidies, namely to Feed-in-Tariffs (FiT) and the Renewables Obligation (RO) scheme. While the impact of these reductions on UK low-carbon capacity remains unclear, the FSB states that early anecdotal evidence from its members suggests the industry is “gravely concerned”.

In light of Britain’s recent vote to leave the European Union (EU), the FSB calls on Ministers to clarify access to the EU Internal Energy Market and provide reassurance about the continued commitment to UK carbon reduction targets.

“Our research shows small firms want energy security to be a priority,” Cherry continued. “Brexit raises yet more questions about the UK’s future power supply. Infrastructure costs must be shared out equitably with small firms playing a pivotal role in securing Britain’s energy future.”

‘Tepid confidence’

In recent months, the Government has been called upon by the business community to restore the “tepid” confidence in Britain’s future energy security by introducing reforms which increase the uptake of low-carbon technologies.

Today’s report reaches a similar conclusion to research by British multinational bank Barclays, which found that British manufacturers could invest £2.5bn in clean energy by 2025, but only if the Government takes immediate action to alleviate concerns over the UK’s energy supply.

That survey followed a similar one conducted by npower Business Solutions (nBS), which revealed that 87% of manufacturing businesses are worried about the impact of European energy policy in 2017, with almost two-thirds highlighting Brexit as the main concern for their companies.

George Ogleby

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