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Businesses could make ROI of 20 per cent on renewables

Green investment news – by GreenWise staff
8th September 2011
Businesses that invest in renewable energy could make returns in excess of 20 per cent, according to the Carbon Trust.
Research by the not-for-profit company found that businesses could make average returns of 10-12 per cent when investing in renewable energy systems, and that returns could reach higher than 20 per cent in some cases. The findings take into account rising energy prices, Government renewable energy incentives and building regulations. The Carbon Trust said these factors were combining to create "a compelling case for UK businesses to generate their own renewable energy", but acting early was "key".

On September 30, the Government plans to launch the Renewable Heat Incentive for businesses. The £860 million support mechanism will work alongside the Feed-in Tariff. Together these incentives are helping to increase the returns on renewable energy.

Choosing a renewable technology
The Carbon Trust report assessed the different renewable technologies and concluded those offering the highest average internal rate of return were anaerobic digestion (AD) grid injection and biomass boilers. But it said other attractive technologies to invest in were wind and ground source heat pumps. 

It found sectors that had most to gain from renewable energy were utilities, manufacturing, retail, hospitality and farming. 

"This report should help convince more UK businesses to move to renewable energy," said Hugh Jones, managing director, Carbon Trust Advisory. "However, selecting the right strategy for renewable energy can be a complex area and we recommend that businesses make a staged approach to adoption. This includes trialing different measures, testing their viability and doing this sooner rather than later before energy price increases and regulatory pressure become more pressing."

Energy prices are set to grow by up to 37 per cent by 2020. 

As part of its research, the Carbon Trust conducted interviews with leading companies to find out about the challenges, opportunities and best practice associated with implementing renewable energy measures. 

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Businesses could make ROI of 20 per cent on renewables
The return on investment on renewable technologies can be in excess of 20 per cent says the Carbon Trust
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