Energy efficiency and renewable energy are well-known drivers of growth and sustainability amongst large firms. Nevertheless, smaller companies can also benefit from using a similar approach with some key points to consider outlined below.
Why it pays to switch to renewable energy
Businesses can save money and boost their green credentials by introducing renewable energy into their business mix – just make sure you fully check government legislation to ensure you find the renewable solution that best suits you.
Renewable energy projects can benefit businesses in a variety of ways :
- Financially – payments from the government and energy suppliers can be received either through a feed-in-tariff (FIT), Renewable Heat Incentive (RHI) or Renewable Obligation Certificates (ROCs)
- Diversification – introducing renewables adds another, diverse income stream to your business mix
- Environmentally – investing in green energy helps to improve the local environment, reduces your business carbon footprint and can assist with accreditations
If you’re considering making the switch to renewables in your business there are five key factors to consider:
- Finding the right project
- Assess your current business and think about its future direction. You’ll need to decide how to link your business plans to your environment and the natural resources you have available.
- Assess the resources on site – both manmade and natural. If you have a large area of south-facing roof installing solar panels may be viable, if you have waste wood or require drying/heating as part of your value add process, biomass may be viable.
- Conduct a review of how energy is currently used within the business. If you produce your own energy do you need more? Or if your energy consumption is high, could you reduce costs by producing your own?
- Get onto the grid
This is a pitfall that often stops projects before they start. Investigate whether you can achieve a grid connection – some areas don’t have any spare capacity or have a cap on the amount of electricity that can be exported potential making your project not viable
- Planning and infrastructure
This could be another stumbling block. Achieving relevant permissions depends on local factors such as planning policy, the number of other similar projects in the area and the size of the proposed project.
Consider what local resources are available and the set-up of the local infrastructure as this may reveal which projects are more viable than others.
Having a local or neighbourhood plan is key in achieving the backing of the local community for a scheme as is asking a professional expert to outline the benefits.
- Solar, wind or biomass?
The choice of which power to harness will depend on the site and how the business operates. It’s important to match the technology with the demand for energy in your business.
Have a need for increased electricity supply?: By producing your own electricity and using that as an alternative to the electricity bought at market rates of up to 11p per kwh (https://www.ukpower.co.uk/home_energy/tariffs-per-unit-kwh), you save more money than you would recoup by selling it back to the grid for around 5p per kwh (http://www.energysavingtrust.org.uk/domestic/feed-tariff-scheme).
Have surplus heat as by-product of your business activities? Heating can be harnessed for biomass projects, which use a lot of organic waste that can be sold to energy companies or converted into energy for use within your business
- Reducing bills and increasing energy security
By producing your own energy a business is insured against future energy price rises. With the UK’s energy security far from strong this could be a very important factor to consider.
How can Lombard help?
Asset finance gives your business a way to tap into renewables by spreading the cost of the installation over time. Depending on the kind of investment you require we can create a bespoke funding agreement that will take into account up to 50% of the income you expect to get from the government’s Feed-in Tariffs and Renewable Heat Incentive Schemes.
Contact Lisa Kennery at Pierce Accountants for further details on 01254 688110.