CBI calls on Government to incentivise businesses to invest in energy efficiency

carrot incentiveThe Confederation of British Industry (CBI) has published a new report calling on the Government to adopt a more streamlined and integrated approach to energy efficiency policies, including those relevant for the UK’s commercial buildings. The report also addresses a range of related benefits and obligations for companies to help them cut costs, manage risk and open up commercial opportunities. The report argues that energy efficiency has been neglected for too long, despite the fact that Government figures show a domestic industry that is growing at 4 percent a year, is worth £17.6bn in sales and supports 136,000 jobs.

In ‘Shining a Light: Uncovering the business energy efficiency opportunity’, the CBI is calling for the Government to:

  • Re-assess all current business energy efficiency policies and ensure that any new initiatives add value to the framework. Bring together and streamline the various policy strands to create a coherent framework and set out plans to engage businesses on the ground when designing, implementing and communicating policies
  • Support large and energy-intensive users, implementing a coherent policy for Combined Heat and Power
  • Back mid-sized businesses by using the Business Bank to raise awareness among firms of the financial schemes available and begin to look at how the Green Deal could be successfully expanded to business users
  • Consider how Business Rates could incentivise investment in energy efficiency – by waiving rates for refurbishment of empty properties in the short-term.

Rhian Kelly, director for business environment policy at the CBI, said the current policy framework “provides perverse incentives” for landlords not to invest because tenants receive any benefits from spending on energy efficiency.

She said: “Energy efficiency has sneaked under the radar in the UK’s energy debate and is making a material contribution to UK growth. But there is so much economic and environmental potential that remains unfulfilled. With energy prices still on the rise, energy efficiency can help mitigate the impact on firms, particularly heavy users. Businesses are frustrated with the tangle of overlapping policies that are bureaucratic, complex and costly. Some firms will have to report their energy use and emissions in different ways under different schemes, so the Government should assess all energy efficiency policies that affect business and come up with a simpler approach, where any new initiatives truly add value.

“The Energy Efficiency Deployment Office will need to make its mark quickly if it is to spur higher spending on energy efficiency measures and it could start by talking more to businesses on the ground. The Government could explore ways of using Business Rates more innovatively to reward those who plough money back into improving the energy performance of buildings. Meanwhile, businesses also need to step up to the challenge. We have seen progress from many companies but others need to make the leap, showing strong leadership at the top with robust structures put in place to manage energy use.”