OUTLOOK ENERGY EFFICIENCY FOR BUSINESS - WWW.AIB.IE/OUTLOOK ISSUE 5. DECEMBER 2013.
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OUTLOOK
WWW.AIB.IE/OUTLOOK
ISSUE 5. DECEMBER 2013.
ENERGY EFFICIENCY
FOR BUSINESS
In association with:
IRISH GREEN BUILDING COUNCIL
OUTLOOK ENERGY EFFICIENCY December 2013
Overview Average Cost
Key reasons cited by SMEs for not implementing
energy efficiency projects:
The average manufacturer
spends €114,000 per annum
on energy.
€114,000
They are time poor. They lack an understanding
of how energy is used.
The average retailer spends
nearly €50,000 per annum
on energy.
€50,000
Cash is required
for other priorities.
Challenges
54% expect their operating costs to increase over the
next 3 years. Some are planning on reducing... 33% of SMEs don’t understand
their electricity bills well at all.
45%
While of SMEs
don’t understand their gas bills.
23%
Margins Product Staff hours/wages
Range
of SMEs feel that energy costs are
preventing them from expanding
into new markets.
Opportunities
62%
86% 1 in 7
own their business
premises and are more
likely to initiate efficiency
measures, potentially agree there is potential will seek finance in the next 12 months.
leading to job creation. to reduce energy costs. The typical payback is less than 3 years.
OUTLOOK
CONTENTS
Foreword
04 Ken Burke, Head of Business Banking, AIB.
Executive Summary
05 While Irish SMEs are aware of the benefits and
opportunities of energy efficiency initiatives in the
workplace, they still face challenges and a lot more needs
to be done.
The Great Energy Challenge Challenging Times
06 An in-depth look at the findings of the latest AIB/
Amárach Research Survey on energy efficiency
within the SME sector.
21 AIB recently hosted a round-table discussion
made up of SMEs operating in the supply-side of
the energy industry. Outlook summarises their views and
insights.
An Energy Boost
The Fine Print
15 Three of Ireland’s leading energy experts share
their views on what needs to be done to
encourage SMEs to be more energy efficient. 24 Many SMEs don’t understand the small print in
their gas and electricity bills. Liam Relihan of
ResourceKraft explains what the various charges mean.
The Drive for Greater Efficiencies
Case Studies
19 Ray O’Neill, AIB’s Head of Energy and Clean
Technologies unit outlines the bank’s view on
lending for energy efficient projects and highlights the 26 Outlook takes a look at four separate SME case
studies that clearly demonstrate the cost-savings
bank’s new tailor-made energy finance solutions which that they have made by investing in and implementing
are now available through the bank’s branch network. energy efficient initiatives.
A Competitive Market
29 Deregulation in the Irish energy sector has led to
a competitive and transparent market and energy
prices are now on a par with the rest of Europe.
OUTLOOK ● ENERGY EFFICIENCY 2013 3
OUTLOOK
FO R E W O R D
A SENSE OF URGENCY
AT THE LAUNCH OF THE OUTLOOK REPORT ON ENERGY EFFICIENCY WERE HEAD OF BUSINESS BANKING, AIB, KEN BURKE, THE MINISTER FOR COMMUNICATIONS, ENERGY AND
NATURAL RESOURCES, PAT RABBITTE, TD AND DIRECTOR OF PERSONAL, BUSINESS & CORPORATE BANKING, AIB, BERNARD BYRNE.
W
elcome to the fifth in the series of provider to save money but this is only a Historically SMEs have tended to finance
Outlook reports covering key sectors short term measure and they need to look at energy measures through their own cash
within the Irish economy. how and when they use energy to achieve reserves. With so many competing demands
real and sustainable savings. SMEs need to on their cash, energy efficiency fails to get on
Energy costs have a significant impact on break away from thinking that energy costs the agenda and with payback periods often
every SME in Ireland. Reducing energy are uncontrollable and move towards a more less than 3 years there are compelling reasons
consumption saves SMEs money and those positive action-oriented approach to reduce for all SMEs to proactively manage and reduce
savings go straight to the bottom line. costs if they are to remain competitive locally their energy consumption.
This report analyses energy consumption, and internationally.
the understanding of energy bills and the Our Energy Efficiency Finance propositions are
appetite to undertake energy initiatives to At a macro level Ireland’s second national supported by a new sectoral approach within
reduce costs. The report also provides expert Energy Efficiency Action Plan to 2020 AIB Business Banking. The Energy & Clean
opinion, guidance and advice from some of reaffirms our target to reduce energy Technologies team has been formed to ensure
the key stakeholders in the energy sector and consumption by 2020. Legislation around that our frontline staff have the information and
provides insights into how AIB is working to building regulations has improved significantly support required to engage with customers.
support the growth of energy efficiency. We as a result. However we know that many Irish
are pleased to partner with the Sustainable SMEs are operating out of old buildings that AIB wants to be the leading bank in Ireland
Energy Authority Ireland and the Irish Green require deep retrofits. This should contribute when it comes to financing SMEs and their
Building Council on this report. to the creation and sustainment of much energy efficiency projects. It’s good for
needed jobs within the economy. Ireland Inc, it’s good for SMEs and their
With some industries in our survey spending competitiveness, it’s good for the environment
over `110,000 per year on energy bills there AIB is launching new Energy Efficiency and it makes good business sense for AIB. We
is a real sense of urgency for SMEs to seek Finance solutions to support SMEs that are committed to playing our part in realising
assistance in assessing their options and take want to drive down their costs and increase the enormous potential that a focus on
the first steps towards reducing their energy competitiveness. A key part of our proposition energy efficiency can bring to our country.
consumption. is that the savings which will be generated
from the energy efficiency measure will KEN BURKE
In the past many SMEs have switched energy be factored into the repayment capacity. HEAD OF AIB BUSINESS BANKING
4 OUTLOOK ● ENERGY EFFICIENCY 2013
OUTLOOK
E X E C U T I V E S U M M A RY
BOOSTING IRELAND’S COMPETITIVENESS
E
nergy costs now account for around 9% of operating costs in most
KEY RESEARCH FINDINGS
businesses according to a survey carried out by Amárach Research
on behalf of AIB. In the case of manufacturers it amounted to 7% ● Over half of the buildings provider in the last 5 years for
while for retailers it accounted for 11% of operating costs. SMEs operate in are 10- cost savings.
50 years old which has
According to the survey, excluding transport costs, the average implications for the quality of ● Almost 1 in 4 don’t know
manufacturer surveyed spends over `9,500 on energy per month, building in terms of energy how they compare to their
equating to over `114,000 per annum. The average retailer, efficiency including heating, competitors on energy
meanwhile, spends around `4,100 per month or around `50,000 per cooling and lighting. consumption.
annum. The average SME spends around `5,500 per month or around
`70,000 per annum. ● Many SMEs are not able to ● 1 in 7 SMEs expect to look
distinguish between different for bank finance to fund an
The survey also shows that the majority of SMEs don’t fully understand sources of energy costs energy project in the next 12
the drivers of their energy costs even though they know that cost savings with only 21% able to fully months. The majority expect
can be made by implementing energy efficient initiatives. quantify their lighting costs. to need less than `25,000.
One of the key findings from the survey is the degree of uncertainty with ● Only 21% of SMEs ● 9% of all SMEs plan to
business decision makers in Ireland. Most expect their energy costs to understand their electricity change/upgrade machinery in
increase but there is little clarity about how they will respond. Instead of energy bills very well and just next 2 years.
looking at how and when they use energy, some are looking at measures over half are satisfied with
which will cut costs in the short term but will also limit their business the information provided on ● 59% of all SMEs would
growth in the long term, e.g. cut-backs in their staffing requirements. ● their bill. consider an energy efficiency
solution if they could access
● The majority of SMEs have finance.
switched electricity energy
ENERGY EFFICIENCY FINANCE OPTIONS
A
ccording to the Amárach Research Irish SMEs realise investing in AIB has launched a `100 million fund for businesses wishing to invest
energy efficient projects will save them money. Many types of in energy efficient projects.
business, regardless of size can potentially reduce their operating ● Range of finance options available.
expenses through energy efficiency projects. These include high energy
users, businesses investing in new equipment or replacing it and ● Flexible repayment options that reflect seasonal changes in a SME’s
businesses that have significant lighting, refrigeration and/or heating cash flow.
requirements.
● We will take into account the additional repayment capacity resulting
The research also highlights that 59% of all SMEs surveyed would from the reduction in energy bills when assessing the credit application.
consider investing in an energy efficient initiative if finance was
available. ● A dedicated Energy & Clean Technologies team throughout the AIB
network.
To find out more about our energy efficiency finance options ask at any branch or Business Centre,
call 1890 47 88 33 or click on www.aib.ie/energy
OUTLOOK ● ENERGY EFFICIENCY 2013 5
OUTLOOK
AIB AMÁRACH RESEARCH
THE GREAT
ENERGY CHALLENGE
Energy costs make up a considerable part of a SME’s operating costs, yet spends over `4,100 per month
or nearly `50,000 per annum.
many Irish SMEs are still grappling with how they can save money by em-
bracing energy efficiency initiatives in the workplace, according to a survey Not surprisingly, energy costs
carried out by Amárach Research on behalf of AIB. account for roughly 9% of
total operating costs in most
R
ising energy prices are a For those using mains gas, a manufacturers, retailers businesses according to the
big challenge for SMEs as similar variation by sector is and other SMEs (excluding survey – rising from 7% for
they strive to manage their apparent. While the monthly transport) is analysed, the costs manufacturers to 11% for
cost base while trying to grow average gas bill is just over are substantial. The average retailers. The majority of
their businesses. At the same `2,000, it rises to over `4,000 manufacturer in the survey, for businesses surveyed -54%- also
time, however, it affords them for manufacturers, but falls to a example, spends over `9,500 on expected that their energy costs,
plenty of opportunities to take little over `1,000 for retailers. energy per month which equates as a percentage of operating
greater control of this cost base However, when the combined to over `114,000 per annum. costs, would continue to rise over
by embracing, and investing in, monthly expenditure of The average retailer, meanwhile, the next few years.
energy efficiency initiatives in the
workplace. METHODOLOGY With no fewer than eight
Amárach Research conducted a telephone survey of 451 SMEs different suppliers operating in
As the Amárach survey found, throughout Ireland in October 2013. The sample included booster the market for gas and electricity,
electricity is a significant cost samples for two sub-segments, including 75 manufacturers and 75 competition is rife and thanks
for most businesses with retailers. The balance of 301 SMEs were then randomly sampled to deregulation, consumers and
the typical SME spending an from a range of other business categories. businesses now enjoy greater
average of `4,200 per month choice, more competitive pricing
on electricity, rising to around Interviews were conducted with those responsible for managing as well as a fair degree of
`6,000 per month for a typical operating costs – including energy costs – in their organisation. transparency. However the bulk
manufacturer. The majority of respondents were CEO/MD/Financial Director level. of Ireland’s energy requirements
are still imported which means
that the local retailers have little
control over the international
wholesale prices. Irish SMEs have
to contend with the vagaries of
the international market as global
demand intensifies and ultimately
dictates retail prices to Irish SMEs.
Managing future energy cost
increases may prove to be
difficult for many SMEs and
most of them have given some
thought to how they will deal
with this eventuality. According
to the survey some 23% of those
manufacturing companies that
expect energy costs to increase,
indicated that “they would have
to accept reduced margins while
6 OUTLOOK ● ENERGY EFFICIENCY 2013
26% said that they would have retailers that expected energy costs of most businesses, when it According to the survey’s
to hike the price of their product to increase, 28% said that they comes to actually managing findings, only 31% of retailers
or service. Furthermore another might be forced to accept reduced and identifying them, it would and 17% of manufacturers are
15% indicated that they were margins while 17% indicated that appear that Irish SMEs are facing able to fully break down their
likely to shop around more for they may be forced to pass any a number of issues. costs when it comes to lighting
new suppliers and/or review costs. increased costs on to the customer. their premises. In addition just
A small minority also said that Once again, a small minority of Arguably one of the biggest issues 19% of retailers and 25% of
they might have to review staff retailers said they may have to is the inability of many SMEs to manufacturers can break down
costs either through a reduction review staff costs and employee distinguish between the different their heating and ventilation
of wages or a reduction in the numbers. (Figure 1) sources of energy costs arising costs.
headcount. from the different activities within
Given that energy costs make their business. In addition many The survey also shows that only
Retailers are also in the same boat, up such an important part of companies have difficulty in 21% of those responsible for
according to the survey. Of those the overall operating costs understanding their energy bills. monitoring energy costs felt that
Figure 1: Impact of High Energy Costs on Business
30%
28% Other
27% 26%
Retail 24%
24%
23%
24% 23%
22%
21% Manufacturing 21%
21%
18% 17%
15% 15%
15%
13% 13%
12%
10% 10% 10%
9% 8%
7%
6%
6% 5% 5% 5%
4% 4%
3% 3% 3% 3% 3%
3% 2% 2% 2%
0% 0% 0%
0%
Reduce Increase Review Reduce Become Reduce Reduce Improve Effect Close Other Don't
margins prices costs wages/ less staff production/ energy ability to down know
hours competitive numbers operating efficiency provide
hours services
Base: All who expect energy costs to increase in next 3 years. Manufacturing 39, Retail 47, Other 157
OUTLOOK ● ENERGY EFFICIENCY 2013 7
OUTLOOK
AIB AMÁRACH RESEARCH
nowadays (across all sectors),
ENERGY INSIGHT
followed at some distance by
Energy is a significant cost
lighting, heating, ventilation and
of doing business, averag-
air-conditioning (HVAC) and by
ing nearly `70,000 a year
electric power for appliances and
for the typical SME in the
machinery.
survey. However, there is
limited transparency for
Another complicating factor
most SMEs about the drivers
for energy management is the
of their energy costs. Given
variability in their energy needs.
the continuing high prices
For example, a third of businesses
for electricity, gas and mo-
have regular energy consumption
tor fuel, SMEs will have to
peaks (on a daily, weekly or
get a better handle on their
monthly basis), rising to 39%
energy costs if they are to
of retailers. On the other hand,
remain competitive locally
two thirds have fairly steady
and internationally.
energy consumption patterns
throughout the year, which makes
their planning and budgeting
more straightforward. Best THE ENERGY CHALLENGE
practice would suggest that SMEs Despite the challenges they
that have peaks in their energy face, Irish SMEs are not passively
consumption should look at local waiting for price rises, nor have
generation or process changes they in the past. Indeed the
they actually understand their The one energy expense that to manage the offset peaks survey finds that many have
electricity bills very well, rising is more clearly delineated in and reduce associated costs. already cut energy consumption
to just 25% for manufacturers. business operations, however, is Indeed, the survey shows that in the past two years while some
Around 42% of them feel they the cost of petrol and/or diesel those with consumption peaks have trained staff to be more
understand their electricity bills for transportation. Indeed, this are slightly more likely to use energy efficient. In other cases,
quite well. However, somewhat ranks number one when it locally generated energy (broadly SMEs have actually invested in
worryingly, a third don’t comes to ranking the different defined) – though some two energy-saving equipment and
understand their bills well at all. energy costs that SMEs face thirds don’t. technologies.
Moreover, this rises to 38% of
manufacturers and these are the Figure 2: What Would Encourage Adoption of an Energy Efficiency Project
(Next 2 years)?
companies that spend the most,
on average, on electricity. Availability of
grants / incentives 87%
A similar picture emerges for
gas – even though it tends to Understanding of
potential savings 83%
have fewer applications within
businesses. Almost half, or More information on the
45%, of gas users admit they solutions available 80%
don’t understand their gas bills.
Not surprisingly the level of No disruption
to my business 70%
satisfaction with information
from gas providers about their An improvement
organisation’s consumption is turnover/profit margins 69%
weak as well.
Availability of finance
from a bank 59%
On the plus side, however, a slim
majority of 53% of businesses Upgrade/expansion
of buildings 56%
are actually satisfied with the
information provided by their
Replacement of
electricity provider regarding equipment/vehicles 55%
their organisation’s electricity
consumption and there is little 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
change across the different
Base: All SMEs. Total 451
sectors.
8 OUTLOOK ● ENERGY EFFICIENCY 2013
As for how they will respond them to adopt energy efficient When it comes to their own reduce energy costs. Indeed
to rising costs over the next solutions in the next two years, levels of preparedness, however, 86% of SMEs agree there are
two years, their options are less the availability of grants and a slim majority of just 51% opportunities for their businesses
certain. Many, in their opinion, other financial incentives top admitted that they would know while 23% of them feel that
have already done all they can the list for nearly 90% of those what to do if an energy audit their energy costs are actually
to reduce energy consumption. surveyed right across all sectors. was required of their business. preventing their expansion into
The most common response They could also be persuaded This falls to just 43% of new markets. That said, most
is that they will do something by better clarity and information manufacturers. feel their energy consumption
but, they’re just not sure what about what can be done and, is similar to their competitors,
exactly that will be. In this regard, more importantly, how much According to the survey, although it would appear that
the concept of offering SMEs a money they can save their SMEs recognise that there are manufacturers are less certain
simple menu of energy efficiency business. (Figure 2) immediate opportunities to about this. (Figure 3)
options, as discussed in the AIB-
hosted “round-table” discussion Figure 3: Attitudes to Energy Efficiency
on Page 15, could be crucial.
100%
Yes
Business owners and managers
also understand the importance 90%
of responding to the energy No
80% 86% 74% 74% 67% 51% 23%
challenge. While some
companies have already picked Don’t know
70%
at the low hanging fruit, they
are also open to persuasion
60%
when it comes to doing more.
Asked what would encourage
50%
40%
“SMEs will have
to get a better 30% 10% 45% 66%
handle on their 20%
12% 25% 25%
energy costs if 10%
2% 1% 1% 23% 4% 10%
they are to remain 0% Potential Our Our organisation Energy Organisation Energy
to reduce organisation is aware of consumption would know costs prevent
energy actively strives businesses that is similar to what to do if expansion
competitive locally costs to reduce its provide energy
carbon footprint efficiency solutions
that of our
competitors
an energy
audit was needed
into new
markets
and internationally” Base: All SMEs. Total 451
OUTLOOK ● ENERGY EFFICIENCY 2013 9
OUTLOOK
AIB AMÁRACH RESEARCH
Figure 4: Types of Energy Used ENERGY INSIGHT
SMEs are somewhat
conflicted about energy. On
the one hand they see the
Electricity
97% issue in terms of efficiency
and environment, but on
the other hand when ‘push
comes to shove’ the decision
Petrol/Diesel to buy equipment is based
54%
on the sticker price and
not the combination of the
sticker price and cost of
Mains Gas running that equipment.
36%
SMEs are not armed with
nor seek out the running
cost information of
Oil
31% equipment they buy. Even
with this information the
cash may not be there to do
the most sustainable thing.
LPG
14%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Base: All SMEs. Total 451
One gauge of the importance would suggest that SMEs often
of energy efficiency to an take a short-term view when it
organisation is the things they comes to energy efficiency and
consider and prioritise when the view can be clouded by the
buying new plant and machinery. immediate desire to conserve
According to the Amárach survey, cash.
one in four SMEs has bought
new machinery over the past ENERGY CONSUMPTION
two years, while a further 10% Not surprisingly, most of
have leased plant or machinery. the SMEs surveyed rely on a
Not surprisingly, manufacturers combination of energy types
dominate this trend. (electricity, gas or oil) on a day-
to-day basis. While electricity
This is a sizeable share of SMEs. is ubiquitous, petrol and/or
So how important was the energy diesel is regarded as the second
efficiency of the machinery when most important energy source
they bought it? The findings for SMEs, most likely because
of the survey show only one many of them have company
in ten chose on the basis of vehicles on their books. Mains
energy efficiency alone. Many gas is also important for around
made the decision on the basis 36% of SMEs in this survey
of a combination of efficiency although this rises to 44% of
and cost, while nearly as many the manufacturers surveyed and
made the decision on the basis 19% of retailers. (Figure 4)
that there was no alternative
equipment available. Retailers The mains gas issue is important
were more likely than other for those businesses that are
sectors to buy solely on the actual not connected to the national
sticker price without factoring in gas grid (evidenced, perhaps,
the future running costs of the by a high dependence on LPG
equipment or machinery. This and oil). As noted in the supplier
10 OUTLOOK ● ENERGY EFFICIENCY 2013“roundtable discussion” on
Page 21 of this report, extending
Figure 5: Age of Business Premises
the gas grid and connecting
businesses to it, will create a real
opportunity to develop combined
heat and power (CHP) production
in Ireland, by substituting out
LPG and oil consumption. There
is also the opportunity for CHP
owners to benefit from rebates
for each tonne of CO2 avoided in
Less than 10 years
their emissions although, to date, 20%
the number of new CHP licenses
that have been issued has been
somewhat disappointing.
TYPES OF PREMISES
The type of premises a company 10 - 50 years
occupies is also an important factor 53%
when it comes to its energy costs.
According to the survey, 68% of
50+ years
the Irish SMEs are operating out of 27%
standalone buildings, whether it’s a
standalone office, factory or retail
unit as opposed to occupying part
of a larger building complex. This
varies little across manufacturing,
retail or other business types but
it has obvious implications for
the energy requirements of the
SMEs, particularly those companies
that are tied into leases or those Base: All SMEs. Total 451
occupying older, and more
expensive to heat, premises. have done nothing to reduce gains in terms of energy cost ENERGY PROVIDERS
energy consumption in the past savings are not ‘shared’. When it comes to choosing
This is borne out by the fact that two years. By comparison 14% an energy supplier, Irish SMEs
those in leased premises are less of the SMEs that fall into the The age profile of the buildings have never had it better. The
likely to have implemented any owner occupier category haven’t that SMEs occupy is also an energy market in Ireland has
energy efficiency measures over done anything either. important consideration and the been transformed in recent years
the past two years. In fact 20% research shows that just over by deregulation and greater
of those who lease their premises Around 36% of the SMEs half, or 53%, of the buildings are competition between energy
surveyed fall into this category 10-50 years old while just 20% of providers. Some providers
ENERGY INSIGHT while the remaining 62% actually them are less than 10 years old. have expanded their offering
There is a worrying degree own their premises, again with The remaining 27%, however, to provide both electricity and
of uncertainty among many little variation across the different are over 50 years old and this has gas ‘combo’ bundles. In the
business decision makers in sectors. implications for the quality of the survey, over a third of businesses
Ireland. Most expect their buildings in terms of their energy using both electricity and gas
energy costs to rise, but The issue of whether or not efficiencies. (Figure 5) source their electricity and gas
there is little clarity about an SME owns or leases its requirements from the same
how they will respond premises is an important one As can be seen in Professor provider. This falls to 31% of
beyond hoping they can from an energy perspective. Owen Lewis’s interview on page manufacturers, and rises to 46%
‘weather the storm’. While Indeed there appears to be a 16 of this report, there is a of the retailers surveyed.
many have undertaken widely-held belief amongst disincentive for landlords to invest
initiatives in the past two the survey’s participants in retrofitting their properties as Despite a high level of uncertainty
years, there is clearly room that neither landlords nor they feel they will not realise the – and the apparent weak levels of
for more in the next two tenants have any incentive to upfront costs back from tenants satisfaction – about what drives
years. improve the energy efficiency and tenants feel that they may energy costs, 72% of businesses
of their premises as the not be getting the full benefit. have switched their electricity
OUTLOOK ● ENERGY EFFICIENCY 2013 11OUTLOOK
AIB AMÁRACH RESEARCH
provider in the past five years The primary motivation for in the role of direct sales in driving more likely to take the initiative
while 45% of gas users have also switching either gas or electricity switching. For example, 54% of themselves. According to the
made the “big switch.” supplier is, of course, price. The SME electricity switchers did so as survey, 49% of manufacturers
vast majority of switchers did a result of a direct approach from said they made the approach to
Retailers tend to show a greater so because of lower prices and a new provider, according to the a new electricity supplier while
propensity to switch than better value. Other factors such survey. This was also the case with 42% said they approached a
manufacturers or other business as customer service or a supplier’s gas switchers, with 53% saying new gas supplier. Of the retail
types, which may reflect the fact green image had little influence that they switched as a result of a SMEs that made the switch
that many are managed and run on the decision-making process. direct approach. (Figure 6) to electricity, 38% said they
by their owners on site, so it is approached the provider while
easier for energy sales people to The impact of deregulation and Of the SMEs that did switch, 43% of those that switched to
get to the ‘decision maker’. greater competition is also evident however, manufacturers were gas say they made the approach
to the supplier.
Figure 6: How was Energy Switch Made? However, one of the more
100%
remarkable findings from
We approached
new provider the survey is that despite
90% deregulation and competition,
New provider
approached us many SMEs have not switched
80% 43% 41%
their providers. This can be read
Don’t know/Switch
70% made before I worked here as indicating a high level of
satisfaction with the incumbents
60% or it may indicate that managing
energy costs are beyond their
50%
control. Indeed, there is relatively
54% 53% little difference, say, in the
40%
average monthly electricity bill
30% of a business that has switched
electricity provider, and one
20%
that hasn’t. Some SMEs could
10% have found that switching is
4% 5% only a short term measure and
0%
Switched Electricity Switched Gas that real gains are only made by
implementing internal projects to
Base: All SMEs. Electricity 315, Gas 73
reduce consumption.
12 OUTLOOK ● ENERGY EFFICIENCY 2013ENERGY FINANCE minority of businesses – about is particularly noticeable in the than half expect to need less
For those prepared to proactively 1 in 7 – do expect to look for manufacturing sector. (Figure 7) than `25,000. Not surprisingly,
undertake measures designed to some form of financial support manufacturers may need larger
tackle rising energy costs head from their bank over the next As for the sums involved, amounts than the average with
on, external finance may be 12 months specifically for an among an albeit small sub- 8% saying they would need
required. Indeed, a significant energy efficiency project. This section of businesses, more financing of between `150,000
Figure 7: Energy Efficiency Finance Requirements Next 12 Months
100%
Other
88%
90% 85%
83%
Retail
80%
Manufacturing
70%
60%
“Energy efficiency 50%
could prove to
40%
be a key element
30%
in sustaining
employment in 20%
Ireland, not just 10% 5% 5% 5%
8% 7%
5% 5% 4%
4% 4% 3% 3%
1% 0% 2%
the economy 0%
Change to A new Renew A new A new None
or the wider terms of leasing/HP existing loan overdraft of these
existing finance agreement finance
environment.” Base: All businesses. Manufacturing 75, Retail 75, Other 301
OUTLOOK ● ENERGY EFFICIENCY 2013 13OUTLOOK
AIB AMÁRACH RESEARCH
and `300,000 while another 8%
Figure 8: Likely Level of Funding Required
reckoned that the financing costs
would exceed `1 million.
100%
Other
Bank finance is not the only
90%
influence on energy efficiency
Retail investment. Accelerated
80% Capital Allowances are another
75%
Manufacturing important financial instrument,
70% though the survey shows that
62% just 3 in 10 businesses are aware
60% 57% of them while the figure for
manufacturing is just 1 in 3. ●
50%
40%
ENERGY INSIGHT
30% The fact that a sizeable
24% 23%
minority of SMEs are already
20% 16%
anticipating investment in
14%
energy efficiency measures is
10% 8% 8% 8% 8% a reassuring indicator of how
6%
well prepared some (though
by no means all) are for the
0%
€0-€50k €50k-€500k €500,001 + Don't Know
energy challenges – and
opportunities – that lie ahead
Base: All who will look for energy efficiency finance in next 12 months. Manufacturing 13, Retail 12, Other 37 in the not too distant future.
14 OUTLOOK ● ENERGY EFFICIENCY 2013OUTLOOK
E X P E RT V I E W S
AN ENERGY BOOST
THREE OF IRELAND’S LEADING ENERGY EFFICIENCY EXPERTS DISCUSS
THE VARIOUS INITIATIVES THAT ARE CURRENTLY IN PLACE AND
HIGHLIGHT THEIR OVERALL IMPORTANCE NOT JUST TO SMES BUT TO
THE WIDER ECONOMY AS WELL.
that smaller companies can also as a fixed overhead cost such as
benefit from energy efficient commercial rates.
initiatives. In many cases savings
of up to 10% of their energy Some SME decision makers
costs have been achieved are worried that the promised
which is significant for smaller savings from investments in
companies struggling to stay in energy efficiency are more
the market and maintain margins. illusory than a real business
Cumulatively this is equivalent to opportunity. Changing these
`50 million in cash savings. perceptions takes time, and we
TO VIEW AN INTERVIEW WITH
BRIAN MOTHERWAY, SCAN THE have found that peer-to-peer
BRIAN MOTHERWAY QR CODE WITH YOUR SMARTPHONE. However, when you are dealing influence and recommendations,
with smaller firms that are based on real SME experiences,
BRIAN MOTHERWAY The Large Industry Energy focused on sales and profitability, are usually the most powerful
CHIEF EXECUTIVE, SUSTAINABLE Network is a group of companies there are understandably a way to inspire action by others.
ENERGY AUTHORITY OF facilitated by the Sustainable number of barriers when it Typically, SMEs don’t want to
IRELAND (SEAI) Energy Authority of Ireland comes to prioritising energy be pioneers. Instead they want
(SEAI) that work together to efficiency. proof which is why we need to
T
he value of investing develop and maintain robust promote proven and common
in energy efficiency is energy management. There are Traditionally, the response to solutions that they can trust.
something that cannot now over 160 companies in the higher energy prices has been
be underestimated. Irish network including Glanbia, Intel to switch provider. But that The second most significant
householders have recognised and Vodafone and we facilitate only delivers a partial solution barrier is finance. The fact remains
this and over 250,000 of them them to implement continuous at best. Too often, business that businesses must pay for
have undertaken an energy improvement through learning owners and managers react to changes now that will deliver
upgrade of their home in the from energy experts and sharing energy costs as something over savings later. The banks are an
last number of years. These knowledge and experiences. which they have little control important partner in securing
developments have created a This delivers average annual and fewer options – they see it the gains from energy efficiency.
vibrant retrofit sector that is savings of 2% in terms of
worth hundreds of millions of energy efficiency; overall that’s
euro and employs thousands of equivalent to over `16 million
people. per annum in savings and adding
to bottom line profitability.
This opportunity to save money
on energy bills is not confined This has led to the growth and
to the domestic household. development of indigenous
Energy efficiency is one of companies to service these large
the key profitability drivers for international organisations in their
organisations and one of the energy improvements. For example
easiest to control and manage. Nualight in Cork, now provides
It is now a core topic for all most of the display lighting for
businesses as energy prices Tesco in the UK, delivering large
continue to rise and recognition energy savings in lighting.
grows that measures can be
taken to save money and Increasingly, SEAI has been
maximise resources. working with the SME sector so
OUTLOOK ● ENERGY EFFICIENCY 2013 15OUTLOOK
E X P E RT V I E W S
Perhaps understandably they have contracting and delivery.
been cautious in their approach. Collectively these exemplars will
A bank obviously has to lend on invest up to `55 million in energy
the strength of the company that saving measures. Projects vary
is borrowing, not just on the likely substantially but many will see the
savings from energy efficiency. pay back in under three years.
Yet, too often, banks miss
opportunities to make profitable These projects, and others, will
loans to viable businesses that will show businesses and banks
become stronger customers as the way forward in terms of
TO VIEW AN INTERVIEW WITH
they gain from energy efficiencies. the range of initiatives that are PROF. J. OWEN LEWIS, SCAN THE
They just have to look at other possible, and the many ways in QR CODE WITH YOUR SMARTPHONE.
businesses that have made the which they can be funded. SEAI
investments to see the returns expects Irish banks to become
that are there. The banks also increasingly involved in energy PROF J. OWEN LEWIS the building stock more energy
need to recognise that investment efficiency, launching new loan CHAIRPERSON efficient.
in energy efficiency is a lot more products that will meet the IRISH GREEN BUILDING COUNCIL
tangible in its capacity to deliver a needs of a growing number (IGBC) The National Energy Services
return than money spent on other of SME borrowers. In some Framework is designed to
functional areas like advertising or instances, these will be backed We currently know too little help develop the Irish energy
marketing. up by proper performance about the buildings Irish SMEs efficiency market in the non-
measurement and monitoring occupy, in terms of their energy domestic sector. The Framework
There are a number of exciting through the auspices of ESCOs performance. The Building provides guidance on routes to
new energy finance initiatives and other similar arrangements. Energy Rating (BER) is now project development, together
underway around Ireland, mandatory for all buildings with sources of finance and
including Energy Services SEAI’s SME Support Centre being sold or rented, but while the support available from SEAI
Companies (ESCOs). With the provides advice and training for hundreds of thousands of to help develop projects in the
switch to ‘pay-as-you-save’ in businesses that are looking to ratings have been issued for Irish public and commercial sectors.
energy efficiency policy, there will reduce their energy spend and homes, so far there are far fewer The key aim of the Framework
be a major opportunity for banks benefit their bottom line. We can BER certs in the commercial is to develop robust projects
to be national leaders in the provide access to successful case building sector. Publicly and which are investment-ready
energy agenda. studies from other SMEs as well privately owned buildings for financing entities (such as
as provide an energy assessment over 500m2, frequently visited the National Energy Efficiency
The National Energy Services of your organisation or organise by the public, are required Fund). This will stimulate the
Framework being developed by training in energy management, to exhibit a Display Energy development of an Energy
SEAI will provide further clarity all of which is designed to show Certificates (DEC). With more Services Company (ESCO)
to businesses considering using smaller companies pathways information relevant to the SME market, consisting of small,
ESCOs and energy performance toward a less costly and more building stock, better quality medium and large ESCOs,
contracting to finance their energy efficient way of doing decisions can be made as to thereby supporting sustainable
projects. SEAI recently recruited business. what measures to target and employment in construction and
22 exemplar energy projects from incentives to provide. professional services.
across the public and private Improving energy efficiency
sectors, including companies like is a great opportunity for IGBC has been working The initial focus has been on
Tesco and Carton Bros as well SMEs. It takes commitment, with the Government on its providing guidance and tools
as hotels, hospitals and local knowledge, support and access ‘Better Energy Financing’ to support developing projects
authorities, to test our framework to appropriate finance to achieve (BEF) programme, due to be suitable for Energy Performance
and take them through from but the rewards are substantial implemented in 2014. BEF will, Contracting (EPC) and Energy
project initiation right through and SEAI will be there every step over time, transition from the Performance-Related Payments
to development, financing, of the way. current range of grants to new (EPRP). But smaller SMEs also
financing mechanisms. Given need training and guidance in
“SEAI’s SME Support Centre provides that energy efficiency remains relation to best practice energy
the cheapest way for Ireland management as the energy
advice and training for businesses to reduce our emissions and spend rarely gets the same
that are looking to reduce their lower energy consumption, and attention as other operating
that about half of all energy is costs such as staff wages, rent or
energy spend and benefit their used in making and operating materials. This is surprising since,
buildings, we must greatly in some sectors, energy costs are
bottom line.” intensify our focus on making the biggest outgoings.
16 OUTLOOK ● ENERGY EFFICIENCY 2013Investment in energy efficiency be found at Google Ireland
for most businesses is a ‘no “Investment in energy efficiency which has embraced the green
brainer’. Energy upgrades in a buildings opportunity as well
business can payback in two for most businesses is a ‘no brainer’. as the benefits of using healthy
years or less, providing the toxin-free building materials.
business with an attractive
Energy upgrades in a business can Google’s offices in Dublin
return on investment beyond payback in two years or less.” are some of the very first in
most competing investments. It Europe to have been built in
creates profits within a business accordance with the Living
by reducing “energy waste”. In the full benefit either as they management in general – can Building Challenge’s Red List. The
some cases, for example where don’t occupy the entire building also improve employee welfare Living Building Challenge sets
companies lease a premises, or may not plan on staying in and their productivity, boosting the world’s highest standards
disincentives can arise when the premises long term. New the overall competitiveness of of energy and environmental
it comes to investing in the York City through its Plan-NYC the company. I like to call these performance, and emphasises
building they occupy (insulation, programme has tackled this issue “hidden wins”. For example, the use of sustainable materials
heating, lighting etc). This is and now promotes an Energy- in offices a healthy indoor air which have no negative impact
because of a ‘split incentive’ Aligned Lease. This type of lease quality is a key concern, while up on human and ecosystem
problem. A building owner does bases the owners’ cost recovery to 85% of costs are wages, 10% health. This has entailed avoiding
not want to pay for a retrofit on predicted savings, but is rent and only 1% goes directly Red Listed building materials,
to reduce energy-related costs limits owners’ capital expense on energy. In offices, days lost to i.e. those materials that
as they are afraid they will not pass-through to 80% of such sickness resulting from poor air international agencies – including
realise the up-front costs back predicted savings in any given quality are likely to have a much the European Commission –
from the tenants. year (the 20% “Performance more substantial impact on the designate as harmful to living
Buffer.”). bottom line. creatures, including humans.
The tenant does not want to
pay for the cost as they may Apart from cost-savings, energy An example of a good energy There are a number of economy-
believe they are not getting efficiency – and smarter energy efficiency policy at work can wide benefits from tackling
OUTLOOK ● ENERGY EFFICIENCY 2013 17OUTLOOK
E X P E RT V I E W S
(Government, suppliers, banks,
“Apart from cost-savings, energy
energy retailer) into a cohesive
efficiency – and smarter energy strategy that makes the ‘menu’
of options for SMEs easier to
management in general – can also understand and financially a
no-brainer to adopt. Only then
improve employee welfare and their is Ireland Inc going to unlock the
savings and jobs potential.
productivity, boosting the overall
competitiveness of the company. I like There is still some potential in
Ireland for larger energy efficient
to call these ‘hidden wins’.” investments such as combined
heat and power (CHP) for hotels.
NORMAN CROWLEY There are perhaps 50 hotels
CEO & FOUNDER and a further 100 SMEs that
energy efficiency head-on. Some of the objectives are CROWLEY CARBON have sufficient thermal demand
Firstly, we already generate to set up and agree national (greater, say, than 1 megawatt)
considerable export revenues qualification roadmaps to Operating since 2009, Crowley who could go down the CHP
from Irish businesses selling achieve the sustainable energy Carbon is one of the biggest route. Then again, the payback
their energy expertise abroad. policy objectives for 2020 energy efficiency consultants in period for CHP can be 4-5 years
For example, Ireland now and to support concrete Ireland. However, around 80% depending on scale etc. The
has a number of consultants qualification schemes on the of our turnover is outside of bottom line is that you could fill
who have worked with large basis of roadmaps to 2020 with Ireland, in countries like the UK, all the existing market for CHP
industries here and have identified needs and priorities. France and Dubai. We design, quite quickly in Ireland – grants
been able to leverage their finance and implement large or no grants.
experience abroad. Furthermore, The barriers to better energy scale energy efficiency initiatives
the ISO Standard 50001 for management and efficiency in for large corporates around the There are bigger opportunities
energy management systems Irish businesses aren’t primarily world. for SMEs in energy efficient
was largely based on Irish technical. Success, however, is lighting and space heating.
developments and is now a about co-ordinating and aligning We recently decided to pull out Upgrading these systems will
global standard for best practice. the incentives of a number of of the SME sector. The economics generate real savings where
players in the value-chain to of serving SMEs in relation to investments have not already
Secondly we have an opportunity make efficiency happen. We energy efficiency don’t add up been made.
to ‘retrofit’ Ireland’s building need to create awareness of for us right now. SMEs tend to
industry – from architecture the ‘energy waste’ that exists want bespoke solutions – which The banks can play a role in
to construction to energy within SMEs. SMEs also need are expensive to deliver – but supporting energy efficiency in
management – around the to take the time to consider in reality SMEs mostly need Irish SMEs. One idea might be to
emerging agenda for green their options and understand access to a range of standardised create an online self-assessment
buildings. The potential job the cost savings they can make. solutions. tool for SMEs, letting them
creation opportunity is huge. But In addition, financiers need to benchmark their performance
to do this we need to retool our recognise that energy efficiency Ireland is not unique in this against other SMEs, and
construction workforce. projects are a good opportunity regard: policies to encourage giving them access to a clear,
to help SMEs generate more SMEs to adopt energy efficient standardised set of options,
BUILD UP Skills is an EU profits and that their finance can practices have floundered with guidance on funding
wide initiative focused on stimulate an entire sector into in other countries as well, options. This will reduce the
the continuing or further action. Suppliers also need to sometimes for the same reasons. ‘cost to serve’ for SME energy
education and training of continue to provide best practice Germany and the UK have had efficiency needs, while providing
craftsmen and other on-site advice, services and technology some modest success, however, a valuable service that motivates
construction workers and to continue tooling up and through targeted incentives SMEs to take energy seriously,
systems installers in buildings, becoming expert in energy relating to heat pumps in the and not to delay decision
after their initial education efficiency solutions. Acting case of the latter. making indefinitely.
and training or after they have together, we can reduce the
entered working life. It aims to `6 billion annual haemorrhage Recently we have experienced Ireland needs its banks to lend
develop a National Qualification now required to import coal, a drop off in interest from Irish for energy efficient investments
Roadmap for each EU member oil and gas, and instead create SMEs due to a lack of incentives. – there is a real need out there
state (including Ireland, where new businesses in Ireland while Like the other countries, there is and the spin off in terms of job
it’s co-ordinated by Limerick enhancing the competitiveness the potential to co-ordinate the creation, exports and reduced
Institute of Technology). of Irish enterprise. stakeholders in the Irish market costs is very substantial. ●
18 OUTLOOK ● ENERGY EFFICIENCY 2013OUTLOOK
T H E S E C TO R V I E W
THE DRIVE FOR
GREATER EFFICIENCIES
AIB recognises the importance of supporting
its SME customers and the need for them to
invest in energy efficient initiatives if they are
to remain competitive. Ray O’Neill, AIB’s Head
of Energy and Clean Technologies, outlines
the bank’s view on the importance of such
investments, what customers can expect from
AIB and how the bank has responded with new TO VIEW AN INTERVIEW WITH
RAY O’NEILL, SCAN THE
lending solutions. RAY O’NEILL QR CODE WITH YOUR SMARTPHONE.
T
here is no doubt that the words, Ireland only produces price hikes are on the cards for amounted to `50,000 and for
global energy markets are around 11.1% of its total Irish businesses over the next few others SMEs `70,000
changing rapidly as demand annual energy requirements. The years.
increases from emerging markets average dependency rate for the At a time when many SMEs
in the Middle East and Asia. whole of the European Union in As it stands, energy costs around the country have had to
2011 stood at 54%. now account for a significant contend with the challenging
As a country operating on the proportion of the day-to-day economic circumstances over
periphery of Europe, Ireland is Our heavy dependency on operating costs of most Irish the past few years, with many
more reliant on imported energy energy imports means that Irish businesses. As the Amárach under pressure to cut costs, the
than almost every other country businesses, and indeed domestic Research survey for this Report opportunity to tackle energy
in the European Union. Data consumers, will continue to be shows, energy costs now amount efficiency is coming to the fore.
compiled by Eurostat shows that subject to the vagaries of the to 11% of total operating costs
Ireland’s energy dependence rate, international energy markets for for a typical SME. In the case The reality is that most SMEs do
defined as net imports divided the foreseeable future. Indeed of a manufacturer, the annual not have the in-house expertise
by gross consumption, stood at as global demand increases, it bill comes to around `114,000 to assess and implement energy
88% at the end of 2011. In other seems inevitable that further a year while for retailers it efficient initiatives. As our survey
shows, many SMEs are also
finding it difficult to understand
the breakdown of their utility bills
while others simply do not have
the time to devote to energy-
related initiatives. However, SMEs
know that they can save money
and boost their competitiveness
by changing consumption habits,
investing in retrofits, switching
providers or investing in newer
and more efficient plant and
machinery.
There is an abundance of
evidence that shows cost savings
can be made by SMEs that
invest wisely in energy efficient
OUTLOOK ● ENERGY EFFICIENCY 2013 19OUTLOOK
T H E S E C TO R V I E W
initiatives. However, as some of
the contributors to this Report
have pointed out, the various
stakeholders in the industry
together with the different
government agencies, need to
realign their respective messages
in a more structured, cohesive
and effective manner before
mass adoption takes place.
As part of this Report, AIB also
hosted a round-table discussion
with suppliers to gauge the
challenges they were facing.
One challenge in particular stood
out and that was their sales are
hard won. Many of them felt
that they spend an inordinate
amount of time trying to reach business. This will also lead to
the decision maker within an an improvement in the quality of
“The bank will now take into account
SME and then trying to convince products and services on offer. the savings from the energy
them, sometimes via free
demonstrations, that savings can It is encouraging to see more and efficiency measure being
be made. When these views are more of our customers seeking to
reconciled with the findings of control how and when they use undertaken by the borrower.”
our survey, it is clear that both energy to provide cost savings in
supplier and end-user need to the medium to long term. payback will be reasonably quick. To put energy efficiency on the
do a lot more when it comes Often the payback is greater than agenda of every SME we will
to engagement, education and The research also shows us that the repayments and the savings continue to promote awareness
validation. there is appetite from SMEs to are still benefiting the SME. This with our partners, develop our
undertake an energy efficiency will be key to helping lots of internal capability to grow with
SMEs that complete energy measure with 1 in 7 SMEs stating SMEs access finance for energy the market and to refine our
efficient projects can cut their that they will look for some kind efficiency projects. offerings as we learn more and
energy costs, which contributes of finance facility in the next engage with our customers
to the bottom line and helps 12 months. With half of those The new application form takes around energy efficiency. AIB is
them remain competitive. Every surveyed saying they will looking into account what a borrower’s committed to working with SMEs
little bit counts, especially to for finance for relatively small energy bills are today and that want to cut their bills and
those companies that are reliant amounts of less than `25,000, it what they expect them to be ultimately grow their bottom
on the domestic economy and is conceivable that the market for in the future. Consideration line. For both SMEs and AIB, it
may have encountered difficulties energy efficiency related finance will be given to the savings in just makes sense. ●
over the past few years during amongst SMEs could be in excess tax from Accelerated Capital
the economic downturn. of `100m per annum. Allowances and the reduction Lending criteria, terms
in maintenance costs. It will also and conditions apply.
This Report has also provided AIB has developed a suite of capture qualitative information Credit facilities are
AIB with a greater understanding Energy Efficiency finance options about any other benefits the subject to repayment
of the issues facing SMEs when which are now available in all project may generate like capacity and financial
it comes to energy efficiency our branches, business centres a higher quality product or status and are not
projects and initiatives. Increased and through the direct channels. increased capacity. Payment available to persons
awareness and understanding The credit application process is holidays of up to two months in under 18 years of age.
of these issues within AIB will much the same as our normal any one year are available on all Security may be required.
enable the bank to lend more business credit terms but with the facilities to match off against Flexible repayment
into the sector. We now know one addition: the bank will now peak times. If the borrower is arrangements may
from the research that a lot of take into account the savings undertaking a particularly large increase the cost of credit.
energy efficiency projects have from the energy efficiency project, the bank can look at
short pay-back times leading to measure being undertaken by interest-only periods to help get Allied Irish Banks, p.l.c. is
increased cash flows which can the borrower. If the energy the project bedded in and the regulated by the Central
then be reinvested within the efficiency project is strong, the savings realised. Bank of Ireland.
20 OUTLOOK ● ENERGY EFFICIENCY 2013OUTLOOK
T H E PA N E L
CHALLENGING TIMES
AIB hosted a round-table discussion with a DECISION MAKERS technology risk is acceptable.
He/she who holds the purse There are countless examples
number of key figures from the supply-side of strings typically makes the of hotels, retail outlets, food
the energy efficiency and energy management decisions in most SMEs. The producers and offices doing
sector to flesh out some of the key issues and individual responsible for the projects, funded by bank finance,
facility or office typically has that create greater energy
challenges they face. Some of the main ideas been given a cost-cutting agenda savings than the cost of the bank
and points raised are summarised below. coupled with a small capital finance.
budget. As a result there is no
capacity for this individual to LIFE TIME COSTS
The panel included the a decision to invest in an make the decision to spend A typical electrical motor
following: energy efficiency project. “If company funds on an energy costs only 1% of the total
it isn’t broken, don’t fix it” efficiency project even if it paid energy that same motor
Donal Sugrue: DCS Energy would appear to be the policy for itself in less than a year. will use over time. Why is
Peter Egan: Emerson Industrial adopted by many SMEs and Therefore the suppliers need it then Irish businesses buy
Automation it is only when a piece of to engage with the CFO and the cheapest motor with the
Tony Lyons: Finning Ireland machinery breaks, and needs educate them on the potential highest energy consumption?
Tommy Tighe: Invertek Drives to be replaced, that they will return on investment (ROI).This The answer is probably two
Liam Relihan: ResourceKraft consider an investment in a challenge is easier when the SME fold. First, the ‘cash is king’
Alan Fox: HDS Energy Group new machine, even though a is spread over multiple sites as issue once again comes to
Brendan Lynch: Filtrex pro-active replacement strategy most measures can be scaled and the fore and if SMEs do
Michael Nolan: Patina Lighting a number of years before might the return amplified. not believe they can get
have justified itself based on the finance for the equipment
savings to the energy bills alone. With a strong ROI case and then the availability of cash,
T
he prospect of spending Another example of a crisis available bank finance a CFO is or competing demands
money on energy efficiency moment is when an SME receives armed with the required tools to for cash, will influence the
measures in order to save a shock bill from its supplier. make a decision, assuming the decision. Secondly, the level
money is not a sales pitch Irish of comparative information
SMEs respond to very well. There about the running costs of
“SMEs tend to wait until a ‘crisis’
are a number of reasons for this. each piece of machinery is
We have all heard the expressions moment before making a decision.” poor.
that “Time is Money” and “Cash
is King” and in today’s economic
climate these sayings have never
been truer. Suppliers, consultants
and state agencies need to get
better at advising SMEs on their
options and guiding the key
decision makers through the
process. At the same time a
proper finance offering, designed
for energy efficiency projects, can
help keep cash in the business
while it realises the savings from
an energy efficient project.
Opportunities to apply energy
efficient measures, with quick
paybacks, are abundant. In
a lot of cases, however, Irish
SMEs tend to wait until a
‘crisis’ moment before making
OUTLOOK ● ENERGY EFFICIENCY 2013 21You can also read
