A Businessperson’s Guide to Renewable Energy
What is renewable energy and why is it needed?
It’s best to start off with the basics. Renewable energy is the term used to describe energy that has been generated from a source that is not depleted after use, such as wind or solar. Not only are renewable energy resources endless, they’re also far less damaging to the environment than fossil fuels.
The UK has set a legally-binding target to reduce overall greenhouse gas emissions by 80% (set against base levels from 1990) by 2050, so it’s crucial that the country becomes less reliant on electricity that is derived from oil and coal. The proportion of the nation’s energy that comes from sustainable sources continues to increase, and as of mid-2019, renewables accounted for 33% of the UK’s energy output. You can keep track of these figures here.
What does the drive towards a green-power revolution mean for businesses?
Having spent so many years burning coal and oil in order to keep the lights on, the time has come for a drastic overhaul, and the only way to achieve this is to invest in the development of green power. It’s inevitable that the introduction of energy and climate change policies will have an impact on business electricity prices in the long run. The government believes that these policies will ultimately drive down energy bills in future, and it is predicted that climate change legislation will result in an 11% reduction in the average household energy bill by 2020 (compared with the price had these policies not been introduced).
The UK’s move towards a greener future has also spawned a new wave of business energy suppliers that pride themselves on sourcing their electricity from the most sustainable sources possible. Eco-friendliness is an increasingly key selling point, and the rise of smaller alternative energy companies has given consumers more choice than ever. You can check out an extensive list of business energy providers by clicking here.
How is the UK investing in renewable energy technology?
The UK has made several significant investments in renewable energy in the last few years.
As of March 2020, it remains a committed member of the Paris Agreement, a strategy founded at the United Nations Framework Convention of Climate Change (UNFCCC) designed to reduce greenhouse gas emissions across the world.
Investment into wind power also saw the UK rise into the world’s top 10 most attractive national markets for renewable energy. Offshore wind progress has been bolstered by the UK government’s Offshore Wind Sector Deal, which has seen companies within the sector commit to invest over £250m. It also commits the government to boost annual wind power experts by 500% by 2030, reaching a projected total of £2.6bn.
What is a Feed-in Tariff?
As a business owner, you know that it’s important to be as eco-friendly as possible, and you probably understand the importance of renewable energy technology as we strive for a society that creates far less pollution. But how can your business play its part? What are the logistics of embracing clean energy?
The Feed-in Tariff scheme is a government-led programme that encourages businesses to adopt renewable energy technology. Essentially, businesses that utilise photovoltaic solar panels or wind turbines to generate electricity can get paid for the power that they produce by their energy provider. So not only are you using your own electricity - which will help you to reduce your overall business energy bill - you can also earn money for any of your surplus electricity that is used elsewhere.
Unfortunately, the Feed-in Tariff scheme was closed to new applicants in March 2019. You can stay abreast of any changes by regularly checking Ofgem’s Tariff Tables page. Ofgem regulates the scheme, and you can read more about it here.
How businesses can use renewable energy to their advantage
There’s more than one way that businesses can use renewable energy to give their company a boost. Here are three benefits that renewable energy can bring to your small business, from real SMEs who’ve seen the results.
1. To generate an extra revenue stream
Choosing to invest in renewable energy can be an easy way to create passive income for your business.
Ashby Farm is a family business based in Daventry, Northampton, that was looking for a new venture to increase their annual turnover. Owner Roger Ashby turned to renewable energy generation.
“We’ve been here for generations,” commented Roger. “Farming is the basis of the business, but we’ve since diversified into renewable energy.”
Roger sought the opportunity to generate extra income for his family business by installing a small-scale wind turbine on his land. Now, it generates energy day and night that the farm sells back to Opus Energy, which then goes back to the National Grid.
Ashby Farms now also has solar panels and even an anaerobic digestion unit, making use of farm waste. The money they make from the sold energy is helping to grow their business.
2. Strengthen your local community
One innovative community in South Cambridgeshire pooled their ideas and resources together to reduce their impact on the environment while creating something positive for their residents.
The Gamlingay Community Wind Turbine was a project that the village decided to collectively invest in. Project organisers agreed that installing a wind turbine would be the best way to proactively give back to the community. Some of the energy would be used to power the village, while the rest would be distributed back to the National Grid and the profits used for worthy local causes.
“The initial reason for setting up the turbine was to reduce our impact on the environment. While we still see that as a huge benefit, there have also been numerous benefits to the village,” said project organiser, Mike Brettle.
“So far, the local football pitch has new goal posts and floodlights; the library has a new set of children’s chairs; the history society has a new projector; the church had LED lighting installed and conservation work has taken place at Gamlingay Wood.”
All of these positive changes were achieved with Gamlingay’s wind power profits.
3. Demonstrate social responsibility
It’s not just large businesses that have a corporate social responsibility as a key business objective.
Whether social impact or environmental awareness is part of your brand positioning or you’re simply the kind of business owner that wants your customers to know that you care about the bigger issues, choosing renewable energy is an easy way to make your mark.
St. Ascot’s Church is one such organisation that wanted to set a good example while contributing to a brighter, cleaner future.
“Many of us who belong to the church have a good awareness of environmental issues, and we’re committed to taking steps to address them,” explained Assistant Church Warden, Chris Gunton.
Chris deliberately chose an energy supplier that provided more renewable energy within their standard contract, meaning they didn’t have to pay extra for cleaner energy supply, but could still relax knowing their energy supply was almost or completely zero-carbon.
“In the future, we’re looking to continue our commitment to green energy by exploring LED lighting, destratification fans and replacing boilers,” continued Chris.
“In the long term, we’d also be interested in exploring the option of generating our own power via solar panels or even a wind turbine.”
A great and effortless demonstration of how to use renewable energy to practice what you preach.
What does the future hold for renewable energy?
Business energy customers will hope that as sustainable energy technology eventually becomes cheaper, their bills will fall accordingly. We’ve already mentioned that more green-focused electricity providers are entering the market, giving consumers more options when it comes to sourcing their energy. You can see all our green suppliers here.
The industry is likely to become even more competitive as these smaller organisations establish themselves, which can only be good news for those looking to find the cheapest business energy tariffs going.