Lancashire businesses with less than 49 employees could make combined savings worth at least £5 million and cut climate change emissions by more than sixteen thousand tonnes a year, but they lack the inspiration, tools and access to affordable advice needed in order to do so.
According to the most recent data available, there are 44,270 micro businesses (with 9 or fewer employees) and a further 5,110 small business (10-49 employees) located within the Lancashire Enterprise Partnership area, making up 97.9% of all businesses in the County.
Research conducted for Ofgem, the official energy markets regulator, found that micro businesses spend £4,000 a year on electricity on average and, where they use it, £2,700 on gas. Small businesses spend £10,000 a year on electricity, on average, and £5,100 on gas.
Managing director at Remsol, Lee Petts, said: “Even just a 2.5% annual electricity cost saving through efficiency (£100 and £250 for micro and small businesses respectively) would add-up to £5.69 million a year in extra profits if they all acted together.
“For a micro business to realise a £100 a year cost saving, it would need only reduce its electricity consumption by 895 kWh a year or just 3.44 kWh a day assuming a 40 hour working week—that’s the equivalent of simply leaving four 5ft twin fluorescent lights switched off for a year.”
But he says this large pool of the smallest employers don’t seem to be engaging in efforts to cut costs and carbon emissions, a problem he puts down to a lack of targeted local support coupled with misconceptions and fears about costs.
“Since the demise of business support programmes like Envirolink, nobody has really acted to engage and inspire Lancashire SMEs to think about business energy saving, or provide access to affordable advice and guidance.
“Where attempts have been made, they’ve typically been framed around climate change and a move to a low-carbon economy – that’s important, but leaders of small businesses also need to see that it’s good for the bottom line too, and that savings can often be made through simple changes that don’t require capital investment.
“SMEs make purchasing decisions differently to their larger counterparts, and need more assurance that paid consultancy will actually add value and that investments made in equipment will actually pay off in the form of savings – if these financial concerns aren’t overcome, it acts as a barrier to change.”
Lee points out that the advantages of embracing sustainable energy initiatives don’t stop at direct financial benefits, and says that businesses can also reap additional rewards that include improved resilience, a more engaged and productive workforce, enhanced reputation, and more growth, all of which could benefit the economic performance of the County as a whole.
“There’s a big gap here but also a big opportunity. It’s why we plan to launch a series of guides and other resources that SME owners and managers across Lancashire can use in order to start tapping into energy, cost and climate savings.”