SCOTTISH proptech firm arbnco has been awarded phase one funding for the Government innovation competition “Boosting Access for SMEs to Energy Efficiency” (BASEE).
arbnco will be developing
a Digital Energy Efficiency Platform (DEEP) to improve energy efficiency across
the 5.7m SMEs across the UK.
Small and medium-sized
enterprises (SMEs) account for 99% of businesses in the UK and are responsible
for over 50% of energy use. DEEP is aiming to eliminate the common barriers
SMEs face in tackling energy efficiency, such as high upfront and transactional
costs, economies of scale and difficulties accessing finance.
The aim of the
Government’s BASEE competition is to accelerate the growth of the energy
services market for SMEs by driving down transaction costs and promoting third
party investment in small-scale energy efficiency projects. BASEE is making available
£6m of funding for innovative, scalable business models or solutions that
facilitate investment for small energy efficiency retrofit/refurbishment
projects in commercial and industrial buildings in the UK.
platform, DEEP, will generate a bespoke list of energy efficiency measures for
SMEs, including costs and finance options, and a business case for implementing
The platform will also
allow potential aggregators to build portfolios of energy efficiency
improvement measures across local regions, sectors or improvement types. It is
envisioned that projects could be grouped together to achieve economies of
scale and favourable financial terms for SMEs. arbnco will work with
manufacturers and specialist financial firms to develop strategies for
aggregating energy efficiency projects.
Andrew Stewart, research
and development manager at arbnco outlined how the project could open up access
to energy efficiency projects. He said:
“SMEs account for over
half of the UK’s energy use, but when it comes to energy efficiency projects
they are often hampered by a lack of expertise or capital. Finance remains a
key stumbling block. Small businesses may have a fear of getting into debt and
banks also have a reluctance to lend on small projects.
“DEEP aims to increase
accessibility and help SMEs identify the quick wins that could reduce energy
bills and increase carbon savings. We want DEEP to be a one-stop shop for
businesses to identify and prioritise energy efficiency projects, and find the
appropriate finance and best supplier for the chosen retrofit project. ”
arbnco has partnered
with Energy Systems Catapult on the project. The Catapult is
providing expertise to the BASEE project in the form of Business Model
The Catapult is
an independent innovation centre set up by government to accelerate the
UK’s transformation to a low carbon energy system at lowest cost – while
ensuring UK businesses and consumers capture the opportunities of clean growth.
Rebecca Lane, business modelling analyst at the
Catapult, said: “arbnco has come up with a really interesting and exciting
concept that aims to deliver energy efficiency solutions for the UK’s millions
of small businesses.
“Initially we’ll be exploring the overall
feasibility of the business model that arbnco has in place, including
segmenting the target market and looking at the value proposition they are
offering potential customers.
“That means customers from both ends of the
value chain: the manufacturers and installers of the energy efficiency products
that arbnco wants to promote, and the small businesses that will ultimately
procure those products to have installed.
“We’ll then explore alternative options for the
business model, from basic match-making through to a full-service platform
arbnco and the Catapult
will work with a stakeholder group, as well as SMEs, to fully understand the
issues and barriers SMEs face in implementing energy efficiency measures.
The BASEE initiative was
launched by the Department for Business, Energy and Industrial Strategy (BEIS)
in July as part of the Clean Growth Strategy.
The Clean Growth
Strategy aims to improve business productivity by enabling businesses to
improve their energy efficiency by at least 20% by 2030, delivering up to £6bn
cost savings for businesses and Carbon savings of up to 22 million tonnes of
carbon dioxide equivalent.