Thursday, 7 August 2020.

Put energy efficiency at heart of business recovery

As business in NSW looks to get back on track, we’ve identified affordable and reliable energy as critical for the recovery of business over the longer term. The current crisis creates an opening for governments to be more ambitious in energy efficiency policy than they have to date.

Governments and energy market bodies have been clear on the importance of reforming energy markets. But we believe the current economic crisis presents an opportunity to ramp-up efforts to support businesses in becoming more energy efficient. 

Energy efficiency measures are no-regrets options that policy makers can use to reduce energy costs, improve energy system security and reduce greenhouse gas emissions – all while yielding savings in excess of the costs of the measures. Recent analysis by the NSW Government found that for every dollar spent in capital improvements, $2.60 is saved from businesses’ energy bills and the costs of running the electricity system. 

 

In ordinary times, one of the challenges to energy efficiency improvement is that it is comparatively labour intensive compared to other actions that can be taken in the energy system. As the economy recovers from the COVID-19 pandemic, there is a desire for job-generating activity. Energy efficiency measures can accomplish this, while delivering benefits to recipients and the wider energy system and achieving lasting improvements to productivity and growth. 

That’s why our COVID-19 recovery plan, Back on Track, has called on the NSW Government to make its proposed business energy efficiency scheme more ambitious. The Government’s current proposals to cut businesses’ energy use by 13 per cent by 2030 should go further.

A significant barrier to business uptake of energy efficiency is a shortage of trusted, independent advice.

Improvements to energy efficiency in the residential sector can deliver similar benefits, reducing strain on the wider energy system, cutting householders’ bills, and generating employment.

A significant barrier to business uptake of energy efficiency is a shortage of trusted, independent advice. Businesses are generally unwilling to pay ‘just’ for advice, and advice from installers and sales representatives is seen as self-interested and may be disregarded.

In the past, poor sales practices led to loss of confidence in the solar sector. If similar practices are tolerated in other energy efficiency technologies, a similar loss of confidence could occur. This will result in promised savings not being realised or inappropriate solutions being implemented. Sources of advice that are free at the point of use, and not attached to the need to sell a particular product, are crucial to address this problem. 

Free, independent advice on how to reduce energy costs or improve energy efficiency is available to small businesses through our Business Energy Advice Program (BEAP), funded by the Commonwealth Department of Environment and Energy.

Over the next few years, energy efficiency improvement will move from relatively quick fixes like implementing LED lighting to more complex equipment like HVAC systems and industrial machinery. 

Funding for capital will need to be accompanied by assistance for businesses to help them navigate the options available to them.