Energy Efficiency Falls as Companies Feel the Pinch

Almost two thirds of UK companies are not improving the energy efficiency of their equipment because of financial pressure, threatening the UK's economic competitiveness.

That is the conclusion of a survey published last month by Siemens Financial Services (SFS), which found that while 44 per cent of UK companies said their equipment was already efficient, 65 per cent were delaying further investment on cost grounds.

The survey of 7,000 senior executives also found that the proportion of businesses delaying spending on efficiency projects rose to 76 per cent for the UK's industrial sector.

While the government has heavily backed building efficiency through its flagship Green Deal programme, far less has been made of the energy savings that can be generated by upgrading machines and equipment.

European legislation such as the Ecodesign directive is gradually shifting the parameters for specific products, but SFS argued that more could be done to drive upgrades.

The company said that as drive technology alone accounts for 60 per cent of industrial energy consumption, the energy savings realised by replacing drives and motors with energy-efficient alternatives would more than cover the acquisition costs without tying up scarce capital.

Local micro-power plants, green IT and efficient lighting and air conditioning were also highlighted as offering rapid returns on investment for companies.

While capital is hard to come by at the moment, SFS suggested that companies could fund such outlays using asset finance

arrangements and regular monthly payments that align with the actual monthly payback from lower energy expenditure.

David Martin, general manager of SFS in the UK, said government subsidies for energy-efficient equipment would also encourage businesses to invest.

"There is a major need for further stimulus to keep up the momentum of investment. The issue is not simply a matter of ethicality and being 'green'; the economic efficiency of British industry is also at stake," he said. "Financing options are readily available to make such investments affordable, aligning outgoings with cost savings. However, there is no doubt that further government stimuli would also be of great value."

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