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How Can The Government Market Energy Efficiency Better?

Selling the concept of energy efficiency correctly is crucial. Doing so encourages businesses to get onside. But honesty is the key to embedding meaningful change.

Meeting the needs of environmental legislation like ESOS is hard for businesses. They have plenty of other priorities; increasing the resources required to comply is a concern for many.

A recent report casts doubt over how the Government is trying to build momentum on ESOS. The data, which surveyed 381 firms, finds the jury remains ‘out’ on how effective government support for energy efficiency is perceived to be.

Ironically, it’s not for lack of trying or goodwill. Government ministers clearly want to support the industry on ESOS. After all, the Environment Agency sent out some 13,000 ‘call to action’ letters last year. More went out this March. About 10,000 UK firms are affected by ESOS, so in theory, the EA has told everyone who needs to know.

The problem, according to EDIE, is that Government does companies, ‘No favours when they imply (or overtly announce) that energy efficiency is “free.”’

There’s no such thing as a free dinner

EDIE estimates the 10,000 plus firms affected by ESOS are facing total assessment costs of £165 million. That’s about £16,500 each.

Other recent industry research predicts an ESOS audit is likely to cost between £5,000 and £50,000. The research argues that if you spend £5,000 on an audit, the Government estimates you’ll find potential cost savings worth £120,000.

That’s an exciting Government figure. But getting to the £120,000 saving isn’t entirely free. You have to do the work to embed the measures. You have to source, negotiate and install new technology. Like any change, unexpected delays and challenges will occur. Some savings are quick wins, like upgrading lighting infrastructure or metering. Others require long-term investment and staff time to deliver.

Ultimately then, energy efficiency, whether through ESOS or otherwise, takes time and effort. These have a direct financial impact. ‘For companies that want to deliver it, the capital cost is significant and long-term behaviour change can require significant investment in time and energy to meet the challenge,’ argues EDIE’s report.

Then again, firms know energy efficiency measures require time and resources. ESOS gets them halfway there., so why wouldn’t they run with it. ‘Even at its simplest, the administration and opportunity cost of making change is considerable.’ EDIE concludes. But is that too simplistic a view?

Why does hearing the truth early help?

Against this backdrop, the Government should offer businesses the honest picture on what ESOS means for them. After all, compliance is mandatory for those affected, so let’s talk truthfully. If businesses don’t embed any improvements, ESOS is not an effective energy efficiency policy, but just another reporting regulation. So let’s have an honest debate about what is needed to implement a successful energy efficiency strategy.

Businesses don’t just want to know how much they could potentially save. They also want to know the timescales involved in savings and what they will cost, in man hours, thought-leadership or other sector-specific metrics.

Help us now, with detailed planning information

There seems scant Government information on any of this. DECC’s June 2014 assessment read: ‘By providing enterprises with tailored information about how they can make cost-effective savings, ESOS should increase the take up of cost-effective energy efficiency measures.’

What about a much needed hint at how hard such take up will be, and what it might involve? What about a strategy guide for planning ESOS implementation, not just on compliance, but on taking the next steps?

If businesses had this knowledge, they could start getting money back faster, because they would plan realistically for what ESOS means. Then they could really deliver environmental improvements and save their bottom line too.

Without it, they remain poorly armed for the realities to come. That breeds resentment, inefficiency and an overall dislike for the very measures aimed at securing their business futures. After all, green business is the future.

Knowing this, it’s plain ESOS is a major opportunity for businesses; it takes them halfway towards energy reduction. But only by supporting them and offering guidance and advice can we help them realise it.