A new energy efficiency scheme for small businesses could help unlock up to £2.5 billion a year in savings, according to the government.

It has launched a call for evidence – open until 8th May 2019 – on various proposals for a new Business Energy Efficiency Scheme focused on SMEs, following the announcement made by Chancellor Philip Hammond while delivering his Spring Statement yesterday.

SMEs account for 99% of UK business and are said to have a “very low awareness” of the benefits of energy efficiency due to a lack of information and access to finance as well as the high upfront costs of installing some measures, which have led to them missing out on the savings.

The new scheme is expected to help towards the government’s target to ensure all businesses make energy efficiency savings of at least 20% by 2030.

The Department for Business, Energy and Industrial Strategy (BEIS) is proposing three possible options:

Energy efficiency auctions: The government could set up a voluntary auction targeting measures for smaller companies. They would compete on the basis of price to win funding to deliver energy savings.

Business energy efficiency obligation (EEO), Business ECO: A business equivalent to the domestic ECO scheme – under which suppliers must fund the installation of energy saving measures in households – could be set up, which would require an obligated party to deliver a set amount of energy savings a through measures such as insulation.

Expanding access to finance options: The government could explore support from financial institutions and/or partner organisations.