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SMEs losing out on business energy efficiency, says new research

SMEs are losing out on substantial savings, despite wanting to become energy efficient.

The vast majority of small businesses (90%) want to be energy efficient and see the direct benefits of energy efficiency (86%), according to recent research from the Federation of Small Businesses (FSB). The majority think energy efficiency is important for saving money (78%), protecting the environment (70%) and increasing profits (67%).

While the research shows that many small businesses have started to take steps to become more efficient, there is a yawning gap between desire and action: a lack of information, funding and/or motivation means too many do little or nothing.

Cheaper business energy

Improvements to the energy efficiency of the business have been made by 58%, with most widely reported measures the installation of more efficient lights, lamps and bulbs (40%); switching off/ turning down energy using devices (23%) and improving insulation (23%).

Still, many companies are making little more than token changes to their operations. The main issues preventing small businesses becoming more energy efficient are leased/rented premises (45%) and lack of concern around energy costs (45%). Many also cite access to finance and available capital.

Apart from costs, the two key things that small businesses said would encourage energy efficiency were enhanced tax relief (61%) and environmental protection (56%).

Small businesses require a fairly quick return on their energy efficiency investment. Most small businesses surveyed (55%) require a return on their investment within two years. Over a third (39%) would require a return on their investment within one year.

Smart meters

As we have previously explained, smart meters are critical for helping small firms understand and take control of their energy use, and reduce costs. Energy companies must roll out smart meters for all homes and small businesses by 2019.

The real-time business energy consumption information smart meters provide offers far more granular insight into business energy usage and draw attention to the cost of different appliances.

This knowledge can act as an important motivation to reduce costs by increasing business energy efficiency.

The FSB argues that the Government must do more to incentivise and support small and micro businesses to use energy more efficiently. At we agree and have previously campaigned for better regulation to help SMEs. But we understand that time poor SME owner-managers may be able to save more money more quickly.

The Department of Energy and Climate Change (DECC) estimate that the average SME could reduce its energy bill by 18–25% by installing energy efficiency measures. Our average customer saves 26% on energy with a call that takes just 20 minutes. Give us a call on 0330 0100 251 (or request a call back using our form) now.

Our dedicated page has lots more information about business electricity.


Key business energy efficiency statistics

  • 31% of FSB members highlight the cost of energy as a barrier to growth
  • Energy efficiency can reduce bills by 18-25% with an average payback of less than 1.5 years
  • 90% of small businesses want to be energy efficient
  • Only a fifth of FSB members say their energy supplier has offered energy efficiency advice
  • 45% of small businesses say leased/rented premises prevent further efficiency
  • 61% of small businesses say enhanced tax relief would encourage energy efficiency
  • 56% of small businesses are motivated by environmental protection

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