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Small and Medium Enterprises Struggle with Energy Crisis: Urgent Support Needed for Transition to Re

Updated: Aug 7, 2023

Small and medium-sized enterprises (SMEs) in Europe have been significantly impacted by the ongoing energy crisis fueled by high energy costs and fossil fuel dependency. According to the newest report published by the Beyond Fossil Fuels campaign, the majority of SMEs across various sectors have experienced reduced profitability and have been forced to increase the prices of their goods and services. SMEs are increasingly recognizing the need to transition to renewable energy sources and improve energy efficiency to cut costs, enhance resilience, and remain competitive.


However, slow national deployment and inadequate support for renewable energy solutions are hindering their progress, jeopardizing their future, and impeding the overall energy transition. It is crucial to provide immediate support and remove barriers to enable SMEs to access clean energy and efficiency measures.



Key Findings from Polling:


High energy costs have impacted SME profitability: A significant 65% of SMEs reported that high energy costs have harmed their profits, compelling them to raise prices. Sectors such as manufacturing, retail, hospitality, and leisure bear the brunt of these costs.


Fossil fuel dependency as the culprit: More than half (52%) of the surveyed SMEs attributed increasing energy prices to their country's reliance on fossil fuels. This finding underscores the urgent need to transition to renewable energy sources.


Support for solar and wind energy: Over 50% of SMEs expressed the belief that investing in local renewable energy projects, such as solar and wind, is the most effective way to support them through the energy crisis. Additionally, SMEs show interest in programs that assist businesses in generating their own renewable energy.


Proactive measures by SMEs: Three out of four SMEs have taken action to mitigate the impact of the energy crisis. Of those surveyed, 24% have already implemented smart energy-saving measures, and an additional 20% are considering doing so within the next 12 months. Moreover, 40% have either installed solar panels or are planning to do so, with the number rising to 75% if adequate support and removal of administrative barriers would be provided.


Importance of removing barriers and providing incentives: The polling data indicates that simply removing administrative barriers can increase the number of SMEs adopting energy solutions by 10-14%. Furthermore, additional support and incentives could further increase adoption rates by 17-26%. Heat pumps are particularly influenced by barrier removal, with a potential 40% increase in adoption.


Challenges Faced by SMEs:


Slow national deployment: The slow pace of renewable energy deployment at the national level hampers SMEs' ability to transition to clean energy sources and take advantage of potential cost savings.


Insufficient support: SMEs require more substantial support in the form of incentives, financial aid, and programs aimed at facilitating the adoption of renewable energy and energy efficiency measures. The lack of adequate support has hindered their ability to embrace sustainable practices.


Energy price volatility: SMEs face ongoing energy price volatility, which threatens their financial stability and competitiveness. Reducing dependence on fossil fuels can mitigate this risk and provide long-term cost certainty.

 

The energy crisis has dealt a severe blow to SMEs across Europe, impacting their profitability and necessitating price increases. Recognizing the importance of renewable energy and energy efficiency, SMEs are eager to make the transition. However, the slow deployment of renewables and limited support for clean energy solutions impede their progress, endangering their future prospects.


It is essential for governments and policymakers to prioritize SMEs by providing comprehensive support, removing administrative barriers, and offering incentives to facilitate the adoption of renewable energy and energy-saving measures. By empowering SMEs to access clean energy solutions, we can bolster their resilience, safeguard jobs, and advance the broader energy transition towards a sustainable future.

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