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