As energy costs rise, is now the time for your business to go green?
As the conflict in the Middle East disrupts the global economy, many businesses are eyeing their energy bills with dread.
Rising gas and oil prices are unlikely to be brought down effectively any time soon, even if an end can be found to the conflict.
Net-Zero was beginning to wane in popularity, but the new energy crisis could be set to change opinion and reinforce the importance of sustainable energy practices for both improving the planet and driving down costs.
In order to make the switch as effectively as possible, it is worth understanding what reliefs are available and how to accommodate the initial costs of a green transition.
How can the costs of a green transition be managed by a business?
While switching to renewable energy is generally a cost-effective measure for many businesses in the long run, there is little denying that the upfront costs can be intimidating for some that may already be struggling with budgets.
However, the current energy cost increases may be sufficient in forcing the hand of business owners who may otherwise have been reluctant to make the switch.
These challenges are somewhat offset by some reliefs that are available to businesses looking to invest in renewable energy generation.
Using the Annual Investment Allowance (AIA), businesses are able to claim 100 per cent tax relief on qualifying plant and machinery investments up to a limit of £1 million a year.
Solar panels, heat pumps and battery storage systems can all qualify for the relief and this may help you to manage the upfront cost.
There is also a range of grants that can be utilised to support a green transition.
This includes the Workplace Charging Scheme, wherein up to 75 per cent of the cost of purchasing and installing electric vehicle charge points, up to £500 per socket, with a maximum of 40 per site, can be claimed until 31 March 2027.
While this grant primarily supports businesses that use company vehicles, it can also be used to support employees who are themselves hoping to escape rising petrol prices.
Is your business ready to make a green transition?
Embracing a new way of working can be intimidating, but the current geopolitical climate leaves little room for hesitation.
Working alongside financial experts can be an effective way of budgeting for the initial upfront costs of a green transition while also understanding the long-term financial impact of the change.
It is hoped that, given the challenges faced in the global supply of fossil fuels and a renewed appetite for renewable energy, the Government may introduce new grants of relief to facilitate more green transitions.
Should this happen, we can help you utilise any options available to you to help you drive down your operational costs, where it is possible to do so.
Net-Zero may waver in terms of popularity, but fossil fuel reliance is undoubtedly having a negative impact on energy bills.
Our team can help you achieve the goals that are right for your business and manage the costs associated effectively.
Speak to our team for help managing the financial implications of a green transition.
