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Retailers need more clarity on energy efficiency tax landscape

npower Business Solutions survey shows energy efficiency simplification welcomed but awareness poor
  • Industry awareness lags: 39% of retailers unaware that further consultation to take place, another 39% have no plans to participate, despite the potential significant impacts on businesses,

  • Simplification welcomed: 66% agree move to single energy efficiency tax and new reporting scheme will incentivise investment in energy efficiency.

  • Discounts of 93% available: Government has boosted discounts for some users

Government plans to streamline the energy efficiency tax landscape have been welcomed by British businesses, a new survey by npower Business Solutions reveals.

But a significant 39% of respondents were not aware that further consultation is due to take place this summer however, and 39% who are aware do not intend to participate in the consultation.

npower Business Solutions surveyed 100 leading businesses on government plans to abolish the CRC Energy Efficiency Scheme while increasing the Climate Change Levy (CCL). Changes to the latter will make it the key driver for energy efficiency.

The CCL one of an array of schemes introduced over the past 15 years including the Energy Savings Opportunity Scheme, Climate Change Agreements, mandatory Greenhouse House Gas reporting, the Enhanced Capital Allowance scheme  and the Electricity Demand Reduction pilot.  

The government now plans to streamline these reporting obligations with one reporting framework. Some 66% of respondents agreed that a planned move to a single energy efficiency tax and a simpler new reporting scheme will incentivise investment in energy efficiency.

And 90% of retailers agree that the introduction of a single energy consumption tax would encourage them to keep their business within the UK, while 88% believe it will help them stay competitive. However, an overwhelming 97% still feel more needs to be done to reduce red tape for business.

David Reed, Head of npower Business Solutions, said: “We welcome the energy efficiency taxation review. The current regime of taxation and reporting requirements have become unwieldy and in some aspects counterproductive. This is a unique opportunity to right some wrongs.

He added:  “Changes to the Climate Change Levy’s (CCL) rates will negatively impact business if firms aren’t fully aware that they need to prioritise energy efficiency. Transparent communication is vital here.”

He concluded: “We wouldn’t want to see companies unduly penalised for not receiving the help they need to better manage their energy use.  Transparent communication is vital here: clear energy reduction targets are important and we are supporting the requirement to make energy efficiency the starting point for regulatory reporting. But changes to the CCL’s rates will negatively impact business if firms aren’t fully aware that they need to prioritise energy efficiency.”

For a copy of the full Energy Matters report, click here.