SMEs turning to renewables and EVs to fend off rising prices
2 May 2022
Research suggests that the number of UK SMEs generating their own renewable energy could more than double within a year, with energy prices set to remain significantly above average beyond 2030.
The findings come from NatWest’s latest Sustainable Business Tracker, which monitors sustainability action among a panel of around 850 UK SMEs.
On-site energy generation
The survey results indicate that just seven per cent of SMEs have invested in on-site green energy generation such as solar PV to-date. However, a further 10 per cent are now planning to begin investing within the next 12 months.
This means that around one in six SMEs in the UK could be generating their own energy by 2023, and that number could increase to more than one in four over the next five years as even more companies move to reduce their reliance on increasingly expensive electricity from the grid.
High energy prices going nowhere
According to newly-published figures by energy consultancy Cornwall Insight, energy prices are set to remain far in excess of historic averages for the foreseeable future.
While prices will drop from the current levels, they will remain well in excess of £100/MWh on average for the rest of this decade and beyond – significantly above the five-year pre-2021 average of £50/MWh.
The NatWest research also shows that there is an increasing interest in electric vehicles (EVs) among SMEs, which are now even more financially attractive than petrol or diesel vehicles due to rising fuel costs.
Around 15 per cent of SMEs say they have already invested in electric vehicles or charging infrastructure, and a further 20 per cent plan to join them in the next year. This suggests that around one in three UK SMEs could have invested in electric vehicles in some form by next year.
Notably, 21 per cent of the SMEs surveyed said they planned to invest in staff training or recruitment for sustainability roles in the coming year – a marked increase on the eight per cent that have already invested in this area.
Andrew Harrison, head of business banking at NatWest Group, said: “It’s great news that SMEs have recognised that sustainability measures can boost their recovery, fuel their growth and future proof their business. Energy prices and global supply chain pressure are leading companies to look for ways to increase efficiency, lower energy bills and invest in employees with green knowledge.”