The overwhelming majority of businesses want to see the financial incentives reinstated in the Carbon Reduction Energy Efficiency Scheme (CRC). Some also believe that the removal of recycled payments from the scheme has had a negative impact on plans to invest in energy saving measures.

This is according to npower's latest Business Energy Index (nBEI), an annual report tracking business opinion on energy use, energy risk and carbon emissions. It follows the government’s announcement of proposals to simplify the CRC – which do not include plans to reinstate financial incentives.

Added to this, nearly half of the businesses surveyed (46%) felt they had not received adequate guidance from the government on the CRC since it was implemented in April 2010. Changes to the scheme have lead to confusion and disillusionment among businesses, and as the next significant milestone approaches – footprint reporting on 29 July – this confusion continues. The nBEI reveals that many businesses are not confident they will hit the deadline with the correct data.

Dave Lewis, head of business energy services at npower, comments:
“The issues businesses have faced since the implementation of the CRC and through its subsequent changes have lead to ongoing confusion. This is concerning as we approach the deadline for footprint reporting on 29 July.”

In terms of the future of the scheme, opinion is divided. The report showed that businesses believed that it is unnecessarily complex and unwieldy, and that it places an unnecessary financial burden on business. Some also stated that they thought it should be postponed completely until the UK’s economic recovery is more secure.

Over a quarter want it scrapped completely, while over halfwanted there to be no more changes to the scheme.

However, despite the ongoing confusion, many businesses did admit that the CRC was an important piece of legislation and some indicated that there has been a positive impact of the CRC. Of those surveyed, 72% of businesses have invested in energy efficiency measures as a direct result of their participation in the scheme, 62% have installed smart meters and one in five have taken on additional staff to manage their inclusion in the scheme.

Lewis continues: “While it is encouraging to see businesses are investing in energy efficiency measures, it is clear that the removal of recycled payments have meant that perhaps businesses have not implemented as much as planned.

“Although a significant number want to see the scheme scrapped, this is not going to happen and businesses participating in the scheme need to continue to implement energy efficiency measures. It is encouraging to see the government has announced proposals to simplify the scheme, and we will be consulting with our customers on the plans and feeding responses back to DECC.”

The report also revealed ongoing scepticism about the government’s carbon emissions reduction targets – over two thirds (69%) of businesses believe that the target to reduce emissions by 2050 is unrealistic.

In the same report, energy risk – particularly in terms of security of supply and supply costs - was identified as the top risk facing major business energy uses, above legislation, security and health and safety. Added to this, many believe it is the government’s responsibility to help reduce instability through funding for self generation projects and demand management tools to bridge the supply gap and keep the nation’s lights on.

According to the report, when asked what was of most concern in relation to energy within their business, supply costs came top, followed by security of supply.

For major energy users, increased regulation in the energy sector, the subsequent impact on reputation, and ambitious carbon reduction targets were identified as other high risk areas that are adding to the challenging picture businesses are facing.

However, despite risks associated with energy being identified as a top concern, one in six major business energy users still do not have a policy in place to manage it – although 91% do have one in place for health & safety, a more ‘traditional’ business risk.

David Cockshott, director of industrial and commercial markets at npower comments: "It is worrying that while businesses have identified that risks associated with energy - from security of supply to cost - pose a real threat to their immediate and future operations, many have admitted to not having a strategy in place to manage it. While many businesses have embraced the benefits of energy management and energy efficiency, when it comes to solutions to manage risk, there is less of a focus from organisations.

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