Government’s Green Deal will help Small Businesses

The Government’s recently announced Green Deal scheme will mean small firms can afford to make energy efficiency savings to their premises, the Federation of Small Businesses (FSB) has said.

Under the terms of the Green Deal, due to launch in 2012, businesses will be able to make energy efficiency improvements to their premises, such as insulation, at no upfront cost.

Repayments will be made through their energy bills only once the bills start to show savings from the improvements. The scheme will be attached to the property rather than to the business, so that if businesses move, the new occupier will continue the repayments.

“Small businesses find the pay–as–you–save mechanism a good method of ‘greening’ their buildings.”

said FSB policy adviser, Francis Wood.

“They’re resource constrained, so providing the upfront capital to make the building improvements and then making repayments only once they start experiencing lower energy bills is highly attractive. In the short term, it’s just deferring payment, but in the long term they’ll have dramatically lower energy bills because the repayments have already been made.”

By law, all firms selling or letting commercial property are obliged to have an Energy Performance Certificate (EPC). This aims to give business owners a better idea of the energy efficiency of their building, and to provide prospective commercial property owners, or tenants, with crucial information before making a decision.

Wood said there needed to be greater enforcement of the EPC system to encourage take up under the Green Deal.

“We are also concerned about the effect on business rates. If you make your building green it’s cheaper to run and therefore more rentable. This pushes up the rental price and that can have a knock-on effect on business rates. We don’t think small businesses that choose to go green should be penalised for doing so.”

Department of Energy and Climate Change (DECC) senior press officer, Philippa Heap said:

“The concern about business rates has been raised with us. This is something which we will be looking at as we work to finalise the detail of the Green Deal.”

Visit the DECC website for more detailed information on the Green Deal.

To find out more about how to reduce your environmental impact, read our business advice articles in the green business section and the article Energy Performance Certificates for buildings.

Government’s Green Deal will help Small Businesses

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