By Dominic Busher – Sustainability Writer
More than ever before companies are switching to renewable energy to save money whilst mitigating their environmental impact. Small and medium-sized enterprises (SMEs), in particular, are taking advantage of renewable resources to discover huge savings, tax breaks and even extra income.
We detail 7 ways renewable energy can make financial sense for your business.
1. Reduce your energy bills
Firstly, behavioural change can provide long-lasting energy bill reduction. Train, incentivise and educate your workforce to encourage a culture of conscientious energy and resource use. A well-thought-out sign is an aide-memoir and you’ll soon see your utility bills tumble.
You can also generate your own energy. Install a solar photovoltaic system or wind turbines on your premises to reduce the amount of grid energy usage. Solar panels in particular have become more affordable and could also add value to your property.
Another option is to retrofit your building. This can reduce heating, cooling or ventilation costs while also improving staff comfort and productivity. For most UK businesses, the cost of managing the building’s internal environment is a significant expense. By insulating the building, less energy is required and the savings pay off the capital investment over time.
The UK Government’s SME Energy Efficiency Scheme funds energy audits and building improvements for SMEs in the Tees Valley. The basic principle is to audit buildings to assess the cost, feasibility and benefit of improvements.
2. Sell green energy back to the grid
Yes; you can earn money from energy sales. The Smart Export Guarantee (SEG) enables you to sell excess electricity back to the grid or energy supplier. This applies to electricity generated by renewable energy sources including solar photovoltaic, wind, micro-combined heat and power, hydro and anaerobic digestion.
The installation must be certified by the Microgeneration Certification Scheme (MCS) and you need to install a smart meter. Any reputable renewable energy company will provide this as standard and will also estimate the energy generation and return on investment for your company.
3. Tax breaks – super deduction
Take advantage of the UK Government’s tax relief by investing in renewable generation equipment. An investment in solar and/or electric vehicle charge points made between April 2021 to March 31st 2023 could save you 25% on corporation tax. This is basically 25p for every £1 invested! Find out more on the government’s website.
4. Reduce your susceptibility to energy price increases
Green energy companies increasingly offer more competitive tariffs and greater price stability. Renewable energy is becoming cheaper than electricity generated from fossil fuels sourced for the grid and is less susceptible to geopolitical shocks.
Collaborations with innovative energy organisations could guarantee your energy costs for the long term. For example, Bristol Energy Cooperative have partnered with SMEs to fund renewable energy systems. In return they guarantee a stable cost per unit of electricity for the lifetime of the project, protecting companies from energy price fluctuations.
5. Lower transport costs
Protect your business from rising petrol costs and avoid emissions charges in UK cities by making your fleet electric. The result: cheaper commutes and business travel. Additionally, electric vehicles could cost less to maintain.
Thankfully, the number of charging points in the UK is increasing while some businesses are opting for solar panel-charged points. And, don’t forget the super deduction!
A greener car will also avoid emission charges in the UK’s biggest cities. Carbon-intensive vehicles entering London’s clean air zone have to pay £12.50 per day. Birmingham, Bath, Portsmouth and others have a variation of this law and many UK cities will soon follow.
Let’s be honest, petrol and certainty diesel cars are a thing of the past. So why not go one step further? Promote cycle-to-work and car share schemes or encourage employees to work from home. Go ahead, embrace the virtual meeting.
6. Reduce your offsetting costs
The UK Government is applying a mixture of incentives and legislation to increase the pressure on SMEs to lower greenhouse gas (GHG) emissions.
Emissions that can’t be reduced will have to be offset (see our key terms blog). And this costs money. Compensating for emissions means purchasing carbon credits from certified organisations. Lowering energy consumption (as above) will cut this. What’s more, it will ease environmental damage.
7. Reduce your Climate Change Levy (CCL)
Companies liable to pay the Climate Change Levy (CCL) could enjoy huge discounts by switching to renewable energy. You could be discounted by 90% on electricity and 65% on all other fuels.
To qualify, you need to make a Climate Change Agreement (CCA) to reduce your business’s carbon emissions. Meet the emissions targets to enjoy this significant discount along with cost savings from reduced energy bills.
Next steps…
Still don’t feel ready to develop robust renewable energy business ideas in-house? A consultant can help you define a clear climate action plan for your business, using the green energy revolution to your advantage. By implementing a simple and consistent strategy you could become a renewable energy example in your industry.
You will also save money in the short term and you’ll create long-term resilience as the UK transitions to a zero-carbon economy.
Get in touch with KGM Climate today for a free 45-minute consultation.
