What if a single change could be our secret weapon for combating both the energy and climate crisis? A recent report from the International Energy Agency (IEA) suggests just that. According to the IEA, faster action on energy efficiency could cut global energy consumption by 95 quintillion joules a year. That is the equivalent of China’s entire energy consumption.
One of the biggest energy security issues at the moment is other countries’ dependence on Russian oil and gas. In 2021, Russia’s oil output was roughly 10.5 million barrels per day, making up 14% of the world’s total supply. But if we achieve the energy efficiency targets suggested by the IEA, we could cut oil usage by almost 30 million barrels per day. In other words, the world could be free of Russian oil dependence three times over.
Even more importantly, efficiency measures can get us on the path to net zero. The course of action suggested could reduce CO2 emissions by five gigatonnes a year by 2030.
The first fuel
The IEA refers to energy efficiency as the “first fuel”, because the best way to cut emissions from energy consumption is to avoid using so much energy in the first place.
The Net Zero Scenario does not involve any unproven technologies or risky spending. It simply requires using tried-and-tested energy efficiency measures that are certain to pay for themselves in energy savings.
The head of the IEA described it as “inexplicable” that we are not already accelerating action on this issue. His comments were echoed by the director-general of the CBI, who asked at their recent conference: “Do we want a new normal of energy efficiency or a new normal of billion-pound bailouts every quarter?”
What’s stopping us?
If energy efficiency measures can help with two of the biggest problems facing the world today while still being cost-effective, why are UK businesses not seizing this secret weapon and using it? The research points to one big barrier: finance.
A 2020 study of the transport and buildings sectors in eight European countries, including the UK, explored three broad categories of barriers to energy efficiency measures: economic, institutional and behavioural. It concluded:
“Economic barriers are the most relevant in limiting the diffusion of technologies and interventions in both sectors.”
This is backed up by UK-specific research, such as the government’s 2019 consultation that identified “the need for finance to meet the high upfront costs of implementing some energy efficiency measures”.
Demolishing the barriers
UK businesses are missing out on the opportunity to implement measures that would cut emissions and save them money, because they do not have the capital in place to meet the upfront costs.
Meanwhile, suppliers and manufacturers of low-carbon solutions are missing out on a huge chunk of their market.
When finance becomes embedded as part of the offer, this catalyses a boost in take-up that helps everybody. Capitas Finance can help green tech providers access new customers through a whole suite of solutions. We partner with businesses who offer energy saving solutions, helping them to integrate a financing solutions into the sales cycle. This overcomes the initial resistance to energy efficiency measures by removing the biggest objection right out of the gate.
If capital investment is the sticking point, you can offer clients a solution with zero upfront spending. For example, our partner Journey Energy Solutions offers customers an innovative Energy as a Service (Eaas) solution where everything from EV charging to battery storage can be provided without any CAPEX spending.
Our work with power specialists Edina allows their customers to benefit from green power without having to actually own the generation asset. Instead, a power purchase agreement (PPA) lets Edina’s clients pay for energy at below market rate while cutting their carbon footprint – but with everything off the balance sheet.
If your business offers green technology or energy efficiency solutions, partnering with Capitas allows you to offer your clients a range of financial solutions too. These can be tailored to the needs of the individual client. Having finance available and ready to go streamlines the whole process, from the first sales call to implementing the solution.
Unlike other finance companies, we are completely focused on clean tech and energy solutions. This specialism gives us a depth of expertise that other third-party finance businesses simply can’t offer.
To find out more about how we can boost your offer and help your clients get behind the energy efficiency revolution, drop us a line here.