The UK government’s Department for Business, Energy & Industrial Strategy commissioned Eunomia, in collaboration with Verco Advisory Services Ltd (Verco), and the Centre for Sustainable Energy (CSE) to investigate the total costs to businesses of investing in energy efficient measures.
The main objective of the research was to quantify the non-capital or ‘hidden’ costs associated with investment in energy efficiency and low carbon technology. As the scale of these costs is not well understood, it is unclear to what extent these costs may inhibit businesses from investing in energy efficiency measures. Additional aims of this research were to provide:
- Quantitative estimates of the size and scale of non-capital costs compared to capital costs that businesses usually consider as part of their appraisal of energy efficiency and low carbon investments;
- Better understanding, complete with estimates where possible, of businesses’ approaches to project risk, including cost contingencies, discounting and payback periods; and
- A greater understanding of the decision making process that firms go through and how energy efficiency investments are assessed to determine commercial viability.
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