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Energy Efficiency

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Boosting Access for SMEs to Energy Efficiency – Phase 2 Projects

23 March 2020

Last week, BEIS announced projects to be awarded Phase 2 Boosting Access for SMEs to Energy Efficiency (BASEE) funding.

The BASEE competition has awarded over £5 million of funding for innovative solutions that accelerate the growth of the energy services market for SMEs by driving down transaction costs and promoting third party investment in small-scale energy efficiency projects. This competition will help address some of the key market failures faced by SMEs such as:

  • lack of economies of scale, 
  • high upfront capital costs,
  • high transaction costs,
  • lack of time,
  • and resold difficulty accessing finance.

14 projects were selected to receive Phase 1 funding to develop feasibility studies for their solutions, with contracts now also awarded for Phase 2 funding. Phase 2 will complete in March 2021.

A dynamic and forward-looking energy services market will be critical to delivering energy efficiency projects for SMEs. A recent report commissioned by BEIS indicated that the UK market for the provision of non-domestic energy efficiency services tends to target larger companies rather than SMEs. Service providers favoured projects of £1m plus, a scale that is hard to reach for smaller scale energy efficiency.

To address this the BASEE competition seeks to introduce to the market business models or IT tools which can either lower costs through economies of scale or through promoting harmonised and simpler practices that encourage SMEs to invest in energy efficiency take up. Through BASEE, BEIS aims to reduce the ‘hassle factor’ for businesses when investing in energy efficiency. This requires a mature energy services market to play a bigger role in helping SMEs find potential savings, identify appropriate finance opportunities, and engage energy efficiency providers. 

On the announcement, ADE Policy Officer, James Griffiths, said:

Considerable action is required to engage SMEs in energy efficiency, particularly the numerous smaller businesses for which energy use is not a salient concern. It is therefore encouraging to see a range of exciting and innovative projects supported through the BASEE Scheme that seek to improve SME’s access to and engagement with energy efficiency solutions.

Read the full announcement, with the full list of funding recipients here

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