Co-op CEO Shirine Khoury-Haq is calling on government to provide small and medium-sized enterprises (SME) with advice and low-cost loans to unlock their participation in renewable energy generation.
It comes after a new report by Green Alliance, commissioned by Co-op, found that electricity usage by SMEs was equivalent to 85% of all renewable electricity generated in 2024.
The convenience retailer said this demonstrated the potential demand for renewable electricity from these organisations and the critical role they could play in the government’s clean energy mission.
Green Alliance, however, found SMEs often lack the capital required to invest in renewables and energy-efficiency measures, and struggle to secure Power Purchasing Agreements (PPAs).
The report also highlighted there was a lack of transparency that can risk locking small businesses out of long-term, and often cheaper, clean energy contracts.
As a result, Green Alliance and The Co-op have set out a series of recommendations for the government and industry to tackle the issue.
These include creating a credit guarantee scheme for SMEs to increase the accessibility of PPAs, making the VAT holiday on energy savings materials permanent and providing every small business with a smart meter to improve energy efficiency. In 2023, over three million small businesses did not have a smart meter installed.
Clean energy support
Khoury-Haq is also calling on government to provide small businesses with support packages, including launching an equivalent to Business Energy Scotland which offers free energy auditing and low-cost loans to install renewables on site.
In the letter to energy secretary Ed Miliband, she warned businesses face “far-reaching” challenges when trying to decarbonise, and that the UK was at a “crucial juncture” on the path to net zero.
“The UK has made huge strides in the transition to clean energy and we need to continue work on delivering a cleaner, greener and fairer future,” said Khoury-Haq. “The opportunity ahead of us is significant and failure to act now will be irreversible in the future.
“As this important report shows, the role of businesses as energy consumers is a crucial part of the equation in delivering our climate and green growth targets. To deliver a better environment, create new jobs, and support our local community businesses, we must address barriers SMEs face in the clean energy transition.
“At Co-op, on the basis of scientific evidence, we believe that reducing our impact on the planet has never been more urgent. That is why we will continue investing in energy efficiency, unlocking embedded generation across our estate and maintaining our longstanding- commitment to PPAs. I remain committed to working with all members of the Net Zero Council to ensure that every business – small and large – is supported to play their part in this critical mission.”
Green Alliance research and policy director Roz Bulleid said: “How we power the UK’s small businesses could make a significant difference to how easy it is to have a clean power system by 2030.
“Our research shows these firms used the equivalent of 85% of the UK’s renewable energy last year, but they often lack the capacity to build their own renewables or make significant energy-efficiency investments, and are too small to secure long-term deals for cheaper clean power.
“Policymakers can help by improving businesses’ insights into their power use and addressing the cost barriers to them going green, including through free energy audits, low-cost loans and making permanent the VAT holiday on energy-saving materials.”
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