For some businesses the cost of installing energy efficiency measures or renewable energy can be a deterrent but npower says cost needn’t be a barrier to going green.

Rising business electricity prices and gas prices and the threat of an energy gap in the future means many businesses are looking at energy efficiency as a way of reducing long term energy costs but are concerned about where they will get the finance to pay for it.

The Hub reported at the beginning of the year that British Gas said it’s time for businesses to become energy efficient – but many think it will be too costly and so do nothing.

Npower says there are a number of options to consider before dismissing the idea altogether.

The Green Deal allows homeowners and some businesses to pay for energy efficiency and renewable energy through savings on their energy bills. For example, they may install cavity wall insulation, mechanical ventilation, heat recovery measures and improved lighting – all paid through savings on energy bills.

The Green Deal’s “Golden Principle” is that the energy bill should not exceed the expected savings and the time allowed for paying for the efficiency measures should not be more than the expected life span of the measures.

If the measures suggested do not meet the Green Deal’s “Golden Principle” then an alternative finance method should be considered, such as Energy Performance Contracts.

Energy Performance Contracts also allow the cost of installing energy saving measures to be covered under a savings plan. They are used frequently in the United States. So how do they work?

An energy services company designs and installs energy efficiency measures and the investment in these measures is funded by the savings made. The energy services company guarantees that the energy savings will meet pre-defined levels and it’s this that helps secure funding for the project.

Project Development Manager for npower’s Business Energy Services division, Graham Ryott, said “The Government’s recent Energy Efficiency Strategy document, “The Energy Efficiency Opportunity in the UK”, identified misaligned financial incentives as one of the key barriers to businesses fully embracing energy efficiency. With this in mind, it is crucial organisations understand there are a range of financing options available to overcome this barrier. We’d encourage any business to look into the detail of those available. Lack of funding really shouldn’t be an insurmountable challenge to reaping the significant rewards of energy efficiency”.