Most businesses know to recycle and swap to energy efficient lightbulbs – what’s the next step? 

‘Energy efficiency is the most sensible place to start, and organising an energy audit to set the baseline and identify the quick wins is a great first step. The saying ‘the greenest kWh is the one you don’t need’ is very true and obviously applies to cost as well. 

Possibly overlooked by some businesses is how effective encouraging employee behavioural change can be. Simple things like switching off lights or heating when they’re not needed can make a big impact. 

Other energy efficiency measures could include draft-proofing windows, roof insulation and automatic lighting controls.’ 

What are the lesser-known renewable energy solutions that businesses may want to explore? 

‘Solar panels are by far the most popular technology, but it’s not the only one, and it doesn’t tackle the major problem we have in the UK: how to sustainably generate affordable heat without the need to burn something. Air source heat pumps are an increasingly popular option to deliver space heating as they’re able to turn one unit of electric energy into three units of heat. Batteries can also be a sensible option alongside solar. These would allow energy to be stored for future use. It’s important they’re sized correctly, though, to make sure you’re not storing too much energy that would ultimately go to waste.’

We know it's not one size fits all, but what are the key factors that determine the best sustainable solutions for businesses? 

‘Understanding your energy consumption profile is all-important, and this is becoming much easier to do with half-hourly metering in place. 

Once you’ve got a handle on your consumption it’s key to understand how the energy generation from different technologies correlates with your energy consumption to create the ideal outcome. The goal is to match the potential generation of energy on-site with your demand, avoiding a situation where excess energy is generated.’

What do you think is preventing businesses from making the changes needed to decarbonise? 

‘The biggest perceived barrier OnGen comes across is the cost involved. That’s why we focus on demonstrating the economic business case for renewables, and the options available to implement cost-saving measures without an upfront capital investment. 

Knowing where to start the process and assessing the feasibility of onsite renewables are also often cited as barriers, and hopefully this conversation can help answer some of those questions.’ 

What’s the biggest misconception around the process of decarbonising?  

‘That decarbonisation and making profit are mutually exclusive. 

Yes, there are upfront costs and overheads involved in the transition. But if done correctly, it’s a win-win in the long run: businesses can save money and reduce their carbon footprint.’

Can small- and medium-sized businesses really make a difference by switching to renewables?

‘Small businesses often have relatively low emission footprints at an individual level – but it's estimated that collectively they account for around half (43-53%) [1] of greenhouse gas emissions by UK businesses.  

One of the reasons it's so important for SMEs to take steps to reduce their carbon emissions is that they form part of their customer’s scope 3 emissions. Many of these (often larger) organisations are making a commitment to net-zero carbon emissions as a condition of continuing to trade, so SMEs will have to follow suit.’

How can businesses find and use the data they need to make smart decisions around renewable energy? 

‘Using energy consumption and tariff data in a smart way is the key to assessing which onsite renewable energy technologies could be used and what size they should be. 

About half of the 2.2 million non-domestic meters in the UK [2] are already smart meters that can record energy consumption every half hour (the meter point administration number (MPAN) will indicate if the meter is recording half hourly consumption). This rich data belongs to the energy consumer and can be accessed from the energy supplier. 

Businesses can also work with energy specialists like us, for example, who have tools and data models that can help them understand what renewable energy options would work best in their individual case.’ 

What would you say to businesses who can’t justify investing in renewables in the current economic climate (if they’re worried about rising costs)?

‘There are funding options available that negate the need for upfront finance. The availability and cost of funded solutions will ultimately depend on the credit worthiness of the business, but given that electricity and heat generated onsite is cheaper than grid supplied energy it should help improve their bottom line – and importantly, their cash flow.’

What next? 

Our thanks to Chris for taking the time to share these insights. To learn more about the services that OnGen offer, visit ongen.co.uk.*

Now that you’re armed with more information, we could help your business take the next step. 

Our NatWest Carbon Planner app could help you assess your current energy consumption and identify possible carbon and cost savings.  

Try our Carbon Planner

And if you want to explore finance options for moving to possible energy alternatives, our Green Loan or Green Asset Finance solutions may be of use.** 

Our Green Loans and Green Asset Finance aim to help eligible UK businesses finance business assets to support their sustainability ambitions, such as solar panels or electric vehicles.

Explore green lending options 

You can find all our climate support for business on our Climate hub. 

*This article is intended to bring you information and advice from relevant experts in the field. It’s not a promotion or endorsement of any third-party products or services. Please explore a range of options and use your judgement.

**Green Loans - Eligibility criteria apply, and security may be required. Fees (other than arrangement fees) may apply. Over 18s only. Subject to status, eligibility, turnover and approval. Business use only. Specific assets only. Any property or asset used as security may be repossessed or forfeited if you do not keep up repayments on any debt secured on it. Terms apply.

NatWest Group Green Asset Finance is available to over 18s which meets the NatWest Group Climate and Sustainable Finance Inclusion Criteria for your business size. Security may be required. Fees (other than arrangement fees) may apply. Available to UK customers for business purposes only. Available for borrowing over £25,000 and less than £10 million. Subject to status, eligibility and approval. Finance provided by Lombard.

[1] British Business Bank, 2021.

[2] Gov.uk Smart Meter Statistics, 26 May 2022.