Why going green is a smart move for cost conscious businesses
It’s time to think differently about how you buy and manage energy. That’s what savvy businesses are doing to cut both their costs and carbon emissions.
Just like the UK’s large corporations, medium-sized businesses are now seizing the chance to go green and save money at the same time.
Exploit energy saving opportunities
It comes as little surprise that energy efficiency is top priority for medium sized businesses (SMEs) we interviewed. After all, the lowest carbon, cheapest unit of energy is the one you don’t use. That’s why driving out energy waste can pay fast, long-term dividends.
What’s more surprising is that relatively few business leaders are exploiting the cost saving benefits of going green. Nearly half of the enterprises we surveyed don’t have an energy strategy to identify and action cost and carbon reduction opportunities.
Another unexpected finding was that fewer than 1 in 5 of the 545 business energy decision makers we interviewed have a plan for purchasing renewable energy. This is an easy, cost effective action that all organizations can take to immediately reduce their carbon emissions and do their bit for the environment.
Why going green matters for everyone
The successful countdown to net zero 2050 needs the contribution of all organizations – not just big business. The climate emergency poses a major environmental and social threat and urgent action is needed now.
Right now, many businesses like yours are doubling down on cost efficiencies as they seek to recover from the COVID crisis. Fortunately, sustainability and success go hand-in-hand. Even the medium-sized businesses can take small, affordable steps to manage energy more efficiently. By building energy sustainability into your business strategy, you can balance both financial and environmental goals.
Demonstrating environmental responsibility is increasingly expected by your employees, customers, suppliers. It’s also becoming a pre-condition of winning new business, which is another reason to go green.
Where to get started on carbon reduction
It’s very clear from our interviews that SMEs support net zero goals, but they want to cut through the noise and complexity to find the most cost-effective carbon reduction solutions.
For most organisations this will be about making small, incremental sustainability improvements over the next decade and beyond. But what are the best energy saving solutions for SMEs? How can you reduce your carbon footprint without it costing lots of money or taking too much management time? Where’s the best place to begin?
We explain 7 practical ways you can take action on climate change and develop a sustainable energy strategy that can balance both your economic and environmental goals.
7 practical steps to improve your cost and carbon performance
1. Buy your energy from 100% renewable sources
The fastest way to go green is to purchase electricity and gas sourced from renewables. Any business of any size can do this and instantly reduce their carbon footprint. If you select a Carbon Trust certified green business energy tariff you can be sure that you’re using 100% renewable power that comes with renewable energy guarantees of origin (REGO).
Some larger customers even combine this type of utilities contract with Power Purchase Agreements (PPAs). You can also decarbonise your heating by buying green gas – backed by Renewable Gas Guarantee of Origin (RGGO) certificates.
2. Understand how you are using energy and how much it’s costing
The most successful green businesses know that you can’t get very far without understanding your energy use.
Next generation smart meters, which are free to businesses, can get you started on your energy saving journey. With near real-time information about your energy consumption and where you’re using most, you can identify the biggest savings opportunities. And the breakdown of daily and monthly costs means that you can also check that your bills are accurate. Government estimates1 show that smart meters could cut UK carbon emissions by 45 million tonnes.
In addition, low cost energy insight technologies can expand your carbon reduction strategy by providing a view of what’s happening beyond the meter at equipment and process level. By gaining full visibility of your entire site, you can use this accessible data to pinpoint where energy and operational waste is occurring and inform efficiency improvements and investment decisions.
3. Eliminate waste by thinking energy efficiency first
With better understanding of your energy usage, you can break down your carbon reduction plan into small manageable steps that won’t cost a lot of money. The average commercial building wastes 20-30% of its energy supply, which means the scope to save money and carbon by tackling inefficiency is huge.
According to the Carbon Trust, most businesses can cut their energy costs by at least 10% and often by 20% with simple actions, so start first with the quick-win energy efficiency actions that pay for themselves in lower bills.
Involving your employees in energy saving initiatives cost nothing and can make a big difference, or you can invest in inexpensive measures such as installing energy monitoring and control systems, or improving building insulation. The most popular technology among the SMEs we interviewed for our survey is LED lighting, which is up to 90% more efficient than traditional lighting and can last 50 times longer – thus delivering an impressive return on investment.
Investing in a virtual or physical energy audit of your offices or site can also pay big dividends in identifying and costing savings opportunities. The savings can often be big enough to fund other low and zero carbon projects with a longer return on investment.
4. Clean up your transport emissions with electric vehicles
UK road transport accounts for around 22% of total carbon emissions. By switching your business to electric vehicles (EV), you can improve your environmental performance and make long term financial savings from lower running costs.
Installing workplace electric vehicle charging is affordable for organisations of all sizes, especially with the availability of EV charge point grants up to £14,000. There are also grants available to support the roll-out of charge points at your employees’ homes. When you factor in other financial and tax incentives, shifting to EV is a sound economic and environmental move for business. You can even generate a revenue from your charge points by opening up public access out of hours or making them available to customers and suppliers visiting your site.
In the countdown to the 2030 UK ban on sales of new petrol and diesel vehicles, the EV market is growing fast and technology costs are falling. Transitioning your business to EV makes a visible statement that you are a green, socially responsible organisation.
5. Generate carbon savings and revenue from low-cost solar
Sharply falling costs of solar photovoltaic (PV) technologies mean that it’s affordable for growing numbers of businesses to self-generate renewable electricity on-site. Unlock carbon reduction and energy bill savings by using your roof or spare ground to install solar panels. With a lifespan (usually backed by warranty) of 20-25 years and minimal maintenance requirements, you’ll benefit from long term savings.
Combining solar with battery storage means you can save even more money and generate revenue from your surplus electricity. You can store energy for the times when grid prices are higher, which means you also avoid additional peak demand charges on your electricity bill.
Generate an income by selling your stored power back to the grid in the most lucrative demand side response markets. The fast response time of batteries also means that if there’s a grid outage, you have an instant uninterruptable back-up power solution, which is much greener than using diesel generators.
6. Decarbonise your heat and cooling
Heat pumps provide a proven low and zero carbon solution for both heat and cooling. They are fast becoming more cost effective due to falling technology costs and the government’s green stimulus grants.
By coupling heat pumps with other on-site generation technologies, there is potential to further improve cost and carbon performance. For example, in combination with solar PV, heat pumps become carbon neutral.
7. Access finance, grants and tax-breaks to realise your green ambitions
Lack of budget and manpower don’t need to block your energy saving goals. Our flexible finance options remove the cost and risk burden of investing in green energy projects. You re-pay the project costs (which can also include project delivery and ongoing maintenance) from ongoing operational savings.
Other ways to minimize project costs include grants and tax incentives, such as the new Super Deduction tax break that extends the Annual Investment Allowance capital relief on machinery and equipment.
Together with our specialists in Centrica Business Solutions, we have the capability to deliver end-to-end projects – removing the financial and management burden from time and budget-pressed businesses.
Turn your green business vision into action
British Gas business and Centrica Business Solutions can provide all the support and expertise you need to realise your cost and carbon reduction goals.