The Business Case for Renewables

I recently read a report from the Carbon Trust about The Case for Renewables in UK Business, and basically it came to the same conclusions as Eco Outsource – it’s a no brainer!

Before the introduction of the Feed-in-Tariff the business case for renewables was not strong. However, it could be clearer now – investing in the right renewables for your businesses makes environmental and financial sense.

Businesses need to do two things:

  1. Demand reduce – introduce resource efficiency initiatives to reduce their energy demand,
  2. Clean supply – research appropriate renewable energy measure(s).

Key drivers 
The main motivations for businesses to develop their own on-site renewable generation are:

  • avoid expected energy price rises and increases in price volatility;
  • benefit from long term financial incentive schemes;
  • reduce Climate Change Levy (CCL) payments;
  • reduce energy costs.

Figures from The Department for Energy and Climate Change (DECC) estimate that between now and 2020 energy prices may grow by ~37%. That’s on top of the increases we’re all experienced in the last 10 years.

The work that the Carbon Trust has undertaken indicates average returns of 11-12%, with the potential for returns in excess of 20%. It’s clear; investing in renewables is an excellent way to protect your business against rises in energy costs.

Renewable energy generation will always make ‘carbon sense’, however it is the Feed-in-Tariff and the introduction of the Renewable Heat Initiative in 2012, that makes it them such a sound financial investment.  However, the funding for these two initiatives is capped so there is a strong case to act quickly. The project cycle for small scale renewable projects is between 6 – 18 months.

Businesses taking early action to introduce on-site renewable energy generation will be the best placed to mitigate risks associated with energy price hikes.

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October 6, 2011 · 9:01 am

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