Coalition to make Small Businesses more Energy Efficient

The Government is preparing a radical multi-billion pound fund to finance the rapid “greening” of more than 4m small businesses.

Under the plans, firms will receive loans to replace old boilers, freezers and other pieces of energy hungry equipment, with the cash repaid from the savings made in their monthly energy bills.

Whitehall officials are talking to high street banks about the design and funding of the scheme, as well as to energy providers such as British Gas about how to administer it.

The scheme, which has the working title “The Green Deal for Business”, echoes the Government’s plan to loan around £6,500 to up to 14m households to pay for home insulation and new boilers.

Chris Huhne, the Energy Secretary, has had civil servants working on the plan for four months.

Kanat Emiroglu, managing director of British Gas Business (BGB), said: “There should be something in the Queen’s Speech in November, in the Energy Bill.

“We are talking to the Government about its energy efficiency scheme for SMEs [small or medium-sized enterprises]. They are very receptive about it. I am hoping it will be introduced in a way that’s not bureaucratic.”

British Gas is confident it can guarantee savings on the installation of certain types of modern, energy-efficient plant and machinery. This data could form the basis of a loan programme, giving the lenders confidence that they would be repaid while not costing the small business owners any cash upfront.

To fund the scheme, which could see tens of billions of pounds lent if it is successful, the Government is seeking to involve Royal Bank of Scotland and Lloyds Banking Group. The scheme would form part of their efforts to lend £94bn to British businesses by next February under legally binding agreements.

Mr Emiroglu said British Gas wanted to see the scheme up and running quickly, adding that the group would contribute up to £20m to prove the concept worked. He said British Gas was examining how to isolate the energy savings accrued by a piece of equipment to take into account the fact that energy consumption may rise or fall for other business reasons.

Existing government-funded initiatives, such as the Carbon Trust’s interest-free loans to small businesses, had not worked, he added.
“The Carbon Trust has only touched a tiny percentage of SMEs. I would guess its less than 1pc,” he said.

Separately, BGB has calculated that thousands of companies face fines totalling up to £15m for failing to register their energy use with the Environment Agency.
Companies that use more than £500,000 of electricity a year have to sign up the Carbon Reduction Commitment by September 30.

Source: www.Telegraph.co.uk

By Richard Tyler
20, Sep 2010

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