The NAB Businesses Research has just released its first edition of the NAB Business renewable survey and while some of the findings aren’t surprising, there are some interesting insights. The survey asked 850-900 firms across the business sector, ranging from small to large companies, where they stood on renewable energy usage. We’ve wrapped up four insights we think you might find valuable as a business.
The cost of renewable energy
Let’s address the elephant in the room – cost.
Renewable energy has become increasingly cost-efficient, and with the shocking rising costs of Australia’s wholesale energy market, businesses and communities are increasing their uptake of clean energy. Therefore, unsurprisingly, 33% of respondents are using renewable energy in their business.
In spite of this: a staggering 48% of respondents still perceive renewable energy as more expensive than non-renewable energy, even though renewable energy is now cheaper. Industries that have the strongest perception of unaffordability are the manufacturing and wholesale industries.
With Australian manufacturers operating the most energy-intensive businesses, we have partnered with many Australian manufacturing businesses to successfully reduce their energy costs. For many of these businesses, the savings can be immense.
Many businesses recognise the cost-savings that come with incorporating renewable energy with two-thirds of businesses identifying cost-savings as the main driver of renewable energy usage. By state, Tasmania is the most motivated by cost savings (85%), followed by Queensland and South Australia (73-74%).
A large portion of business also said social and reputational benefits is a secondary motivation, especially amongst the medium-large businesses. Social and Reputation factors ranked highest for South Australian businesses, followed by Victorian.
The motivation of ‘diversifying energy to reduce risk’ is a much bigger priority for South Australian and Tasmania, likely a result of the 2016 South Australian blackout, and 2018 Tasmanian energy crisis. Across the states, South Australian businesses lead the way with 31% of firms saying they have a renewable energy policy, with Victoria next in line at 21%.
Besides the perception of high cost, renewable energy is not considered a high priority for 45% of Australian businesses surveyed. This could definitely be partly due to government certainty on renewable energy, which is the third highest barrier for businesses. Many businesses suggest there isn’t enough information available on renewable energy (fourth strongest barrier).
It’s not all doom and gloom. Australia has some of the best wind resources in the world and the highest solar radiation per square meter of any continent. This means we have an ideal climate for businesses to start incorporating renewables into their business. By 2020, renewable energy is expected to grow to 23.5% in Australia, and solar panels are predicted to generate more power than coal by 2035. Batteries will continue to get cheaper, just as solar has. And the rise of power purchasing agreements is being seen globally as a way to hedge rising energy prices and actively manage price risk.
In summary, the report suggests that a lot more work needs to be done to raise awareness about the affordability of renewable energy; and while some businesses are motivated to improve their social and reputation by incorporating renewables into their business, many businesses still don’t see renewables being a priority.
Read the full report here.