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Investment in energy efficiency could grind to a halt, warns new survey

More than half of the UK’s top 250 companies have made building fabric improvements to improve energy efficiency but four in five are concerned about their return on investment, new research by Ernst & Young shows.

While 53 per cent of the companies surveyed had improved their energy efficiency, just 9 per cent have imminent plans to do so.

A third of the firms surveyed - from sectors including construction, retail and hotels and leisure - said they had not considered microgeneration, while 39 per cent said they had ruled it out on cost grounds.

As it unveiled the results of its survey, Ernst & Young warned there was a danger that investment in energy efficiency for buildings would grind to a halt.

The great majority of respondents to the survey believed there would be further substantial rises in energy prices, however, and 91 per cent said this would encourage them to investigate means of reducing consumption.

In addition to concerns over the cost of energy reduction solutions, companies are also worried about the length of time it will take to recoup investment.

The number of respondents preferring to invest in other areas of the business was 71 per cent.

Power & Utilities advisory partner Richard Postance said: “With the grid under increasing pressure, the government needs to give businesses certainty that investing in higher-cost measures will be worthwhile.

“Developments such as the smart grid represent a huge opportunity for businesses to take advantage of the move towards a lower-carbon economy, but too few understand what it could mean for them.

“Without clarity on how upgrades to the nation’s energy infrastructure will facilitate return on investment, business will lack the confidence and security to take the next step on reducing their energy costs.”