A Green Deal for businesses?

DECC has today published a new consultation on the Green Deal, a government initiative which will invest £14bn in energy efficiency from October 2012.

Although the domestic market is the main beneficiary of the green deal, there are some benefits for businesses too.

The consultation says that every British business will be able to install energy-saving measures like insulation with no upfront cost; the repayments will be made from the savings the business makes on its energy bills.

While help with eenrgy efficiency is likely to be welcomed by many businesses, there is a flipside: the cost. The money to pay for the Green Deal has to come from somewhere and the consultation also includes an analysis of what impact the Green Deal will have on on business energy prices and bills:

Image courtesy of DECC

As the graphic shows, while policy will mean an eventual reduction in energy bills for domestic customers, it will lead to an increase for businesses.

The consultation emphasised that while it’s important that businesses play their part in the transition to a low-carbon economy, it’s vital that they remain competitive too. So before the end of the year, the government will be announcing a package of measures to help energy-intensive businesses. 

I asked our director, James Constant for his take on the Green Deal consultation:

“Any help to enable businesses to reduce their energy overheads and protect the environment is to be welcomed, however this should not be at the expense of increasing the transparency of the market and fair pricing for businesses.

“For too long domestic customers have been the sole focus of market improvements and businesses have been left to suffer in hopeless silence; as a way to raise business energy up the agenda this move is welcomed, but there shouldn’t a sting in the tail of price rises to support the benefit for the few who are able to make use of the energy efficiency measures being proposed.

“It would be far better would be to increase market transparency, encourage innovative new suppliers to enter the market and make smart meters and active energy management the cornerstone of business energy efficiency. This would not only reduce unnecessary energy costs, but also boost businesses’ cashflow with accurate billing.”