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Why Are More Small Businesses Not Making Energy-Efficient Improvements?

Why Are More Small Businesses Not Making Energy-Efficient Improvements?

Energy-efficient measures could save smaller businesses money, but a recent roundtable discussion presented by The Guardian determined that many of these businesses aren’t take advantage of these resources.

The roundtable, which was sponsored by ScottishPower, gathered experts in the fields of small business and energy. The group discussed ways in which small and medium enterprises (SMEs), a classification used by the European Union, could improve their efficiency, thereby reducing their energy costs.

The discussion comes at a time when businesses, especially startups, need to save money more than ever. A survey by the Forum for Private Businesses found that 87% of companies reported increased energy costs in 2013, yet the Business Energy Index found that 53% of UK small businesses had no methods in place to curb their energy consumption.

Hannah Mummery, who handles small business policy for Citizens Advice, said that unpaid energy bills can lead to big problems for small enterprises. “We see around a thousand or so small businesses a year… facing big debt problems or having been disconnected,” she said of her organization.

Another member of the roundtable, policy chairman Mike Cherry of the Federation of Small Businesses, pointed out that 58% of FSB members surveyed found energy bills difficult to understand.

And some startups don’t have the right resources. Valeria Mizuno-Turner wanted to make her bakery as “green” as possible, but was unable to work with energy-saving organizations right away. “You need to have two years on your books before people will talk to you,” she said.

Another issue for SMEs is the type of property in which they operate. A 2010 study from the Department of Energy and Climate Change in the UK found that 60% of small businesses in commercial sites rented from commercial landlords — which means that some owners aren’t even sure what their exact energy costs are.

This creates serious problems for employers looking to upgrade their facilities. Brian McNulty, CEO of financial regulation consultancy DBFS, explained that his landlord manages the service for his firm. “It has been a struggle to even get the basics in place,” he said.

Upgrades like solar panels and double glazing with more environmentally-friendly recycled glass, which is just as strong as new glass, can be impossible in these situations.

Mummery’s organization confirmed the issue; a recent Citizens Advice survey stated that 17% of small businesses aren’t responsible for those bills because they go to the landlord. “How do you even begin to talk to businesses like that about energy efficiency?” she asked.

Some energy companies also handed out “Smart Meters” to help business owners track their energy usage. But the Citizens Advice survey found that 84% of the 2,000 business owners who had them hadn’t been able to make any actual savings so far. Mummery called them a “missed opportunity.”

However, there are businesses making changes, especially as solar energy is poised to become the largest source of electricity by 2050, according to the International Energy Agency. Solar panels are a popular option for businesses because they can fit onto a rooftop or in a large field, and their prices have dropped 64% since 2010.

Overall, the roundtable concluded that businesses were slow at making changes, and that they’re especially frustrated with the challenges in their way. But the number of small businesses taking advantage of energy-efficient programs is steadily increasing, even here in the U.S., which means that changes could come for those who have encountered obstacles.

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