Energy Action’s Customer Insights Survey has revealed what companies think about energy usage and the carbon tax. EDWARD HANNA of Energy Action delves into the survey’s results and shares the insights gained.
Energy prices are forecasted to rise. What was previously a fraction of operational costs is growing quickly, forcing Australian businesses to take action in managing the cost impacts. With this in mind, Energy Action created and conducted the Consumer Insights Survey to measure consumer sentiments and gain a snapshot of the current opinions and understandings of consumers on energy related issues.
The survey was designed to allow participants to voice their opinions on a range of topics, including the cost of energy, the role of media, energy efficiency projects and the carbon price. It was aimed at business owners and key decision-makers in the commercial and industrial sector. The survey ran from October 2011 until January 2012, with 135 respondents in total.
FINDINGS CONCERNING ENERGY EFFICIENCY AND SUSTAINABILITY
The survey explored, among other topics, opinions and involvement with energy efficiency and sustainability options. Respondents were asked about any currently implemented projects and their concerns with regards to investing in energy efficiency and sustainability projects.
In what is a pleasing sign for the energy management sector, 84 percent of respondents were interested in energy efficiency and sustainability measures for their business, and 70 percent of respondents have already implemented measures in their businesses.
The most commonly implemented measure was lighting, with 81 percent of respondents indicating they have installed more energy efficient lighting. This was followed by implementing measures for air-conditioning (44 percent), hot water heating (31 percent), refrigeration (24 percent), kitchen appliances (19 percent) and solar PV (photovoltaic) (18 percent).
The biggest concern for businesses when investing in energy efficiency and sustainability projects was return on investment and the payback period, with 76 percent of respondents raising this as a concern. This was closely followed by capital expenditure, with 73 percent of respondents raising this as a concern for their business. This highlights that many businesses are still unaware of the existence and availability of managed services or build-own-operate energy efficiency projects. It is possible for organisations to invest in energy efficiency with no capital expenditure and still receive immediate benefits from savings in energy, carbon and spending. Such solutions are offered by a number of energy management companies.
OPINIONS ON THE IMPACT OF CARBON TAX
Participants were asked about their expectations and opinions of the carbon pricing scheme. The survey concluded that the majority of businesses believe both the immediate and long-term impact of a carbon price would be negative on their business. Only two percent and nine percent of respondents believed that the respective immediate and long-term impacts of the carbon price would be positive on their business. Seventy-seven percent and 69 percent of respondents believed that the carbon price would have a negative impact, or were unsure of the impact in the immediate and long-term scenarios respectively.
More than 40 respondents volunteered their opinions and sentiment towards the carbon tax. Many raised concerns about the current economic struggles facing their businesses and how the carbon price will place an additional burden on them. Opinions were raised on the validity of the tax and were concerned it would be a ‘revenue raiser’, with costs to be passed down to consumers.
The main opinions raised were:
- concerns over the cost of the carbon price
- that there is a lack of information available about compensation
- that the carbon tax puts further constraint on already struggling businesses
- that it promotes sustainable and renewable options
- that extra jobs will be created, and
- concerns regarding overseas competition.
Many businesses are not aware of available assistance, funding or grants to help offset the impact of the carbon tax. This highlights a significant level of uncertainty and negativity around the carbon pricing scheme. As a result, this may be creating a ‘culture of caution’ towards adopting and embracing sustainability on a larger scale.
TAKING CONTROL OF YOUR ENERGY
Facilities managers need to review contracts from energy suppliers, and they need to act and attempt to reduce or offset their exposure to the carbon tax. Responding to the carbon tax will be a journey and a path of continual improvement. Perhaps the most important step to take is the first step: do something – anything. Taking control of your energy contracts is an obvious starting point; it will give you some control over the numbers involved, and in the current soft market it may yield immediate cost savings too.
Taking control means first choosing an energy supplier. When choosing a supplier, the most important consideration is price. When considering their energy contracts, respondents to the Consumer Insights Survey found shopping around and working with an experienced broker to be the most important factors.
An experienced broker, or energy management company, can develop a customised specification of a business’ energy profile and will then advise of a suitable time to take your contract to market. They will then distribute it to retailers to price on behalf of the business. Once offers are received, they will review and analyse the various offers, compiling them into an apples-for-apples comparison. This process can be conducted either via a standard tender approach, or through a reverse auction, creating further competitive tension for a reduction in energy rates.
Find an energy management company that you can trust to make your business energy efficient. Ensure that the specialist dives deeply enough into financing and financial modelling. Moreover, check that they have the relevant credentials and expertise, particularly an Australian Financial Services Licence, if they are providing any financial recommendations or advice.
Be sure that you understand your forward energy cost profile. Once you have established your profile, you can then better understand the benefits of energy efficiency for your facility.
Edward Hanna is executive director of energy efficiency and sustainability at Energy Action.