Small companies could make a significant contribution to the UK's carbon reduction targets if the government provided the right policies, the Federation for Small Business (FSB) has said.
The trade body said small firms were keen to meet government objectives on reducing energy consumption. Its research found that the majority (86%) believe the UK is too reliant on imported energy, while 61% said that energy was a significant cost to their business.
One in ten small businesses generates their own energy, mostly from solar panels. More than a third (41%) of FSB members believe renewable and low-carbon energy will be less expensive than fossil fuels in future, compared to only 23% who believe it will never be as cheap.
The research also revealed that three in five (58%) small firms have made changes to improve the energy efficiency of their business. But many complained they were disempowered or not given enough incentives to make further improvements.
The FSB urged the government to develop a new carbon plan because the UK’s political and economic landscape has changed significantly since 2011, when the last one was published.
It wants the new plan to promote microgeneration, including for the 46% of small businesses that rent their premises. Subsidies and incentives should be reviewed to help small firms overcome the barriers to investing in energy efficiency and generation, it said.
The FSB found that small firms are optimistic about the potential for new business from the move to a low-carbon economy, with 27% believing there would be more opportunities than threats for their business. It wants to see small businesses gain from new energy policies as generators, investors, consumers and as suppliers of products and services.
However, there are relatively few appropriately-sized contract opportunities as supply chain frameworks frequently exclude small suppliers, the FSB said. Overly complicated supply chain processes, which often had complex prequalification requirements, excluding small companies from business opportunities in the energy market, it said.
FSB national chair Mike Cherry said: ‘The government should produce urgently an updated carbon plan, looking specifically at small businesses as an audience. Without the input of an engaged and empowered small business community, the UK risks failing to meet its binding emissions targets.
‘Our research shows small firms want energy security to be a priority. Brexit raises yet more questions about the UK’s future power supply. Infrastructure costs must be shared out equitably with small firms playing a pivotal role in securing Britain’s energy future.’
The organisation also pointed out that the investment being made in the UK’s energy infrastructure would be expensive for customers, so it was only fair that small businesses benefit from the transition.
Poor investment planning could place the greatest cost burden on those that can least afford it and restrict new opportunities to a lucky few, Cherry remarked.
