A third of UK businesses are now generating their own power

Esther Kezia Thorpe Read more October 23, 2018

More than one in three businesses now produce at least some of their own electricity. According to a report from The Economist, businesses in the retail sector are well ahead of the trend, with almost 40% generating their own energy.

A third of UK businesses are now generating their own power

The Economist survey of 450 senior executives from manufacturing, transport, hospitality and retail companies, looked at their company’s energy strategies. It was found that, for those organisations producing their own energy, the most popular way of doing so is through solar power, with six in ten businesses making use of it.

This makes sense as the rooftops of hotels, shops and office buildings can easily house solar panels, and make use of unused space.

Wind power is also a popular method, used by just over a quarter of self-generators. However, adoption is a little tricker as there has to be enough wind near the office’s location to make installation viable.

So why are so many businesses looking to generate their own energy? The trend is partly down to ever-increasing energy costs in the UK – which has some of the highest electricity prices in Europe. The survey showed that cost savings were the top reason for companies producing their own electricity, cited by 48% of respondents.

It’s no surprise, then, that business leaders are looking for ways to put themselves back in control of spiralling costs, even if it’s just to meet a small proportion of their energy consumption.

A want to be more environmentally-friendly is also a key driver, although it’s not clear if it’s because of the intrinsic benefits, or just the positive PR around it. For 38% of respondents, an eco push was the primary reason for producing their own electricity.

It also helps that the cost of some renewable-energy generators has really come down in the past few years. Solar panels and batteries, both of which play an important part in off-grid energy-generation, are now much more affordable, as is the cost of installing them. There are also tax incentives and other benefits that companies are eligible for, which can make renewable energy an economically attractive prospect.

“If you look at some of the big technology companies running huge data centres – Google, for example, or Amazon – there’s a definite movement in the direction of wanting to run on 100% renewable power, often involving on-site generation of that power,” says Simon Virley, UK head of power and natural resources at KPMG, in the survey. “In the UK, we’re starting to see similar ambitions among large retailers, particularly the big supermarket chains and, to a lesser extent, manufacturing companies, but that will come.”

That’s not to say that companies will suddenly be ditching their utility providers completely, but the trend is certainly gathering momentum, with several UK companies recently announcing new self-generation projects.

Nestle opened a nine-turbine wind farm in Dumfries and Galloway in Scotland just a few months ago, and in June, Screwfix announced its first net-zero energy store in Peterborough. Energy generated by the solar panels will run the building during the day and charge the batteries to provide power at night.

It may be a few years until self-generated energy is making a real difference to the bottom line of UK companies, but even a small shift will help with making businesses more efficient and, of course, just a little bit more environmentally friendly.