UK businesses lack bank support for energy efficiency investment
23 May 2014
Research from Siemens Industry and the Energy Institute shows that businesses in the UK lack support from banks when investing in energy efficiency measures, with nearly 88% having a negative experience. Siemens is calling for a greater role for the Green Investment Bank in supporting the SME market.
A survey of over 300 senior energy specialists across the UK, showed that only 1% of respondents reported a secured financial investment from a bank when approached to help cover the cost of energy saving technologies. Half received little feedback to their proposals, with a further 38% saying their bank was not at all interested.
Stephen Barker, head of energy efficiency and environmental care at Siemens Industry, said: “With Britain striving to meet stringent carbon reduction targets by 2050, everything that businesses can do to help should be encouraged. This is especially true in major energy using industries such as manufacturing. Our findings show that businesses do want to reduce their energy consumption, and have ideas on how they could effectively achieve this. But, we are seeing barriers being put up from banks, which perhaps do not understand the payback that energy efficient technologies can deliver.
“Government, to a degree, has tried to alleviate these problems, by increasing capital allowances in the last budget for firms wanting to invest in energy efficient technologies and has created the Green Investment Bank. However, the actual effectiveness of these steps is limited due to the critical gap in the delivery of finance for investment.
“In the absence of ready financial support from banks, businesses could look to alternative methods of financing, such measures including innovative purchasing options such as energy performance contracts. These remove the need for upfront capital and allow for the investment to be paid back by savings achieved.”
The research also found that only 33% thought it was possible for Britain to meet its 2050 energy targets to reduce emissions by 80%, while more than half thought the target would not be met.
Louise Kingham OBE FEI, chief executive of the Energy Institute said: “To reach our carbon targets we must invest in energy efficiency. This poll suggests businesses still face barriers to doing so. Financiers need better knowledge around technology risk and return in different applications; signposting and access to good information for companies is a must; as are the skills to install, operate and maintain technology to deliver value from such investment. The EI can help on each issue but the scale of the task requires a collaborative approach from Government, financial institutions and industry.”
Contact Details and Archive...
Most Viewed Articles...