In 2019, business energy consumption in buildings in the UK was responsible for approximately 93 megatons of carbon emissions annually (approximately 20% of total emissions). This highlights the importance of businesses, particularly SMEs (Small & Medium Sized Enterprises), to reduce energy consumption through efficiency measures as part of the UK Government’s policy to achieve net zero by 2050. City Science, as part of a consortium led by Hoare Lea alongside other members including Hildebrand and SE2, won a competition to obtain funding from the Department for Business Energy and Industrial Strategy to develop a feasibility study (Phase 1) aimed at Boosting Access for SMEs to Energy Efficiency (BASEE). The study focused on establishing current constraints and developing new business models to support companies to improve energy efficiency.
Phase 1 of the project focused on developing zero carbon pathways for SMEs. This comprised of an initial literature review and primary research process which demonstrated that historic feed-in-tariffs for renewable energy have masked an underlying low uptake by SMEs in energy efficiency and conservation measures.
This initial research process was followed by in-depth stakeholder engagement with SMEs to ascertain existing constraints and opportunities of current non-domestic energy efficiency funding models. This focused on establishing underlying reasons behind the low uptake which identified that that energy efficiency in SMEs is often constrained by high upfront costs, a reluctance to borrow, limited accessibility to finance and the disconnect between SMEs and building landlords.
The outcomes of this initial user research were then used to form potential new solutions, including using cutting edge technology to create standardised products that can be rolled out to SMEs in all industries through both self-financed and externally financed means. The standardisation element of the process reduces the risk for external or internal financiers, providing reliance in returns, savings and the security required by SMEs to invest.
Our technical capability in Phase 1 of the project was proven by the extensive evidence we developed; our research was successful in developing new innovative insights and understanding across several areas including financial mechanisms, user needs and financial modelling and investment case design. Our success is also evidenced through being successfully awarded Phase 2, with our consortium partners, which will seek to build on Phase 1 through piloting standardised contracts, specifications, and processes to minimise friction within the energy efficiency marketplace for SMEs.