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Will government pay businesses to be more energy-efficient?

The government is proposing a scheme that would mean businesses would be paid for being more energy-efficient.

The scheme is one of a number of proposals that have been announced alongside the Energy Bill, which had been criticised for not doing more to reduce our national energy usage.

The proposals are:

  • ‘Premium payments’ for each kWh of energy that a business saves through energy-saving measures like installing energy-efficient lighting;
  • A business energy supplier obligation which would give them a specific target for electricity demand reduction (this scheme is due to start in the domestic market next month);
  • Financial incentives to encourage businesses to invest in new, more energy-efficient equipment (some of which will be sector specific);
  • Voluntary schemes and better energy efficiency information, including an energy efficiency information ‘hub’ for the industrial sector and better labelling on products;

Regardless of your environmental credentials, reducing energy consumption is something all businesses should be trying to do. Cutting energy usage to the optimum level of efficiency could be the difference between a business surviving and folding if energy prices continue to rise.

So on the one hand, schemes to encourage efficiency are to be welcomed, but on the other, you have to wonder where the money to pay for these policies and incentives will come from.

It is vital that the cash savings from using less energy aren’t wiped out by the increase in bills to pay for these incentives.

With 7% of businesses saying that 15% increases to their energy bills could force them to close, it’s important to remember than even small increases can have a big impact on profitability.

Our advice, as ever is to engage in the market and take control of both your costs and consumption levels.

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