Policy Pathways Brief: Accelerating Energy Efficiency in Small and Medium-sized Enterprises

Policy Pathways Brief: Accelerating Energy Efficiency in Small and Medium-sized Enterprises
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Edition: 2017
2 pages

Small and medium-sized enterprises (SMEs) typically represent 99% of the enterprises within an economy, and provide 60% of the employment. If these SMEs could be helped to use energy more efficiently, it would benefit the companies by reducing their cost base while simultaneously boasting national productivity. However, due to a lack of information, technical expertise and funding, SMEs are rarely in a position to exploit energy efficiency opportunities resulting in the competitive benefits being lost.

The International Energy Agency has identified six critical factors to guide policy makers in helping SMEs realise the cost saving from more efficient use of energy leading, to improved SME competitiveness, a boast to the overall economy and improved national energy security.

Policy pathway to help SMEs use energy more efficiently:

  • Design SME programmes that combine information, expertise and financing to provide ease of access and minimize transaction costs
  • Tailor packages of information and services to the specific needs of SMEs within individual sectors, and deliver these packages through trusted sources such as professional networks
  • Communications should emphasise issues that matter most to SMEs such as the ability of energy efficiency to enhance productivity, product quality and safety. The personal experiences of peers tend to have more credibility than messages from other sources
  • Programmes should build the capacity of local financial institutions and energy efficiency experts to enable identification of energy efficiency opportunities within SMEs, and to provide long-term programme sustainability
  • In developing programmes, creative approaches to financing should be considered. For SMEs, grants, dedicated credit lines and leasing options for energy efficient equipment are often more appropriate than commercial loans
  • Monitoring and evaluation is important to assess and enhance programme effectiveness, but should be designed to minimise additional burdens on SMEs

The full Policy Pathway offers guidance on improving the energy efficiency of Small and Medium-Sized Enterprises and provides case studies from around the world. The report can be downloaded here