The United Kingdom’s energy efficiency sector has hit a four-year low confidence level, at the same time as the industry warns of a Brexit.
In the latest edition of the UK Energy Efficiency Trends (PDF) report published this week by clean energy analysts Bloomberg New Energy Finance (BNEF) and sustainability analysts EEVS, supply-side confidence in the country’s energy efficiency sector has hit a four-year low, dropping four points in the first quarter, and dipping into the red (see below) for the first time since the report was first published back in 2012.
At the same time, in an accompanying feature, the authors of the report warn that the UK must remain in the European Union or brace for an increase in energy prices.
According to the Energy Efficiency Trends report, the decline in supply-side industry confidence was due primarily to a downward trend in national orders, combined with a decreasing confidence in the UK Government’s management of energy efficiency policy. Customer demand was the largest area of concern for suppliers of energy efficiency in the first quarter.
However, high-efficiency lighting suppliers can rest a little easier than the rest of their sectors’ compatriots, with a 14-point increase in the uptake of lighting technologies in the first quarter, over the previous four quarter-average. High-efficiency lighting was included in almost 8 out of 10 energy saving projects throughout the first quarter.
Solar PV, which experienced a surge of activity in the second half of 2015, returned to the average trend line, appearing in only 2 out of 10 projects during the first quarter.
“Clearly it’s been a very difficult quarter for suppliers of energy efficiency services,” said Ian Jeffries, Director at EEVS.
“Consumers appear to have tightened their belts of late and not only has this meant declining orders, but those orders made were materially smaller than before.
“Customers are also demanding shorter paybacks from their investments, which must be adding further pressure on the bottom line for many suppliers.
“The exception to this rule was high efficiency lighting, however, which appears to continue on ist upward trajectory regardless.”
In an included feature dedicated to the question of whether Britain should exit from the European Union (Brexit) or remain, and the impact each way, the report found that suppliers and consumers in the energy efficiency market are overwhelmingly in favor of remaining — believing that their sector will be best served if Britain remains in the European Union. Specifically, the report asked energy efficiency suppliers and consumers what Brexit outcome was in their best interests: Suppliers made it very clear that they are hoping for Britain to remain in the EU, with 79% voting thus, with only 14% undecided and 7% opting for leaving. Consumers were less certain, with 64% opting to remain in the EU, 30% undecided, and 6% opting for out.
“From this research we see that the UK energy management sector has planted itself firmly in the ‘remain’ camp on the Brexit debate,” said Ian Jeffries.
“As well as an expectation that ‘leave’ would drive up the capital cost of energy saving technologies for consumers and lead to higher energy prices for all, both suppliers and consumers were fearful that the UK government’s poor record on energy efficiency would see well-established and popular EU policies that support energy efficiency, such as energy performance certificates in buildings, being scrapped to the detriment of the sector.
“With less than 7% of respondents supportive of a UK exit from the EU – and with political and economic uncertainties already reported to be holding back investment in energy efficiency schemes – from this research the energy management industry’s stance on Brexit is an overwhelming ‘remain’.”
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