UK Businesses Continue To Support Investment In Renewable Energy
The solar PV market is often seen as a triumph for the UK, contributing nearly 10 GW to the energy mix in just over 6 years. However, the recent cuts have been the most extreme yet and have already put nearly 20,000 jobs at risk and stalled the long-term growth of the sector. Installation numbers have dropped dramatically and market uncertainty is rife. CleanEarth Energy has issued a report aimed at dispelling some of the myths that currently cloud the market. The report includes feedback[1] from over 300 SMEs[2] across the UK and provides valuable insight into investor confidence post the latest tariff cuts.
Particularly striking is the finding that nearly all (88 percent) of SME businesses feel that they have a duty to be environmentally responsible yet over a third (37 percent) feel that the Government is failing to introduce policies that will support them in combatting climate change. The CleanEarth Energy report shows that private businesses are taking it upon themselves to drive the clean energy agenda, rather than the national government.
This demonstrates a heightened green consciousness amongst SMEs, who are following in the footsteps of the influential RE100 group, suggesting that we are approaching a time when organisations invest in renewable initiatives not just for the financial incentives, but as part of their wider corporate social responsibility. When asked their reasons for adopting a greener approach to business, it wasn't all about profit. 70 percent claimed that it was important because of their own personal obligation to combat climate change and 37 percent said that it was beneficial to make a positive statement to customers.
This isn't to say that financial incentives are no longer a driver for UK businesses, however. The report shows that 60 percent of UK SMEs believe it still makes financial sense to invest in renewable energy. This is largely because energy price uncertainty remains one of their biggest concerns over the next 5 years. Over half (54 percent) of SMEs with more than 10 employees (and therefore higher energy consumption levels) believe that energy price uncertainty is either a medium or high risk to their business, whilst another 58 percent feel that reliance on a commercial energy supplier poses a similar risk.
Generating your own energy from a renewable source can mitigate these risks and uncertainties, therefore offering greater financial control to a business. Furthermore, though the benefits are not as immediately lucrative as they once were, solar PV in particular can still offer a rate of return of 12 percent or more; an attractive proposition for many companies.
The report also suggests cause for optimism within the market, pointing to efforts to diversify through revised business models and new technologies. With prices falling and lower upfront costs, ownership models look ever more attractive to businesses. Community owned schemes, when community money is used to fund renewable projects, are rising in popularity as it decentralises energy supply and gives the "˜power' back to the local area. Costs remain a hurdle for battery storage but are falling as research and development continues. Indeed, nearly a quarter (23 percent) of SME businesses who don't currently invest in solar PV would consider it if on-site storage was a viable option.
Dean Robson, Managing Director of CleanEarth Energy, said "What this report highlights is that despite an ever changing political landscape creating market uncertainty, the sector has great cause for optimism. UK businesses are behind a drive to combat climate change, and believe in the long term benefits of renewable energy. Never before has knowledge and backing of renewable energy been stronger.
The landscape and the goal posts may have changed, but the future remains the same. Projects and investment must be diligently and methodically planned but an efficient and stable supply infrastructure is in place. The sector knew it would have to transition to being subsidy free eventually and this has come sooner than expected but the industry is built on progressive pioneers who saw the big picture long before anyone else."
For the full CleanEarth Energy Report 2016, click here.
