The latest issue of the UK Energy Efficiency Trends report (Volume 14) identified a jump in both solar generation and lighting projects as well as a material uptick in use of performance measurement during the final quarter of 2015.
Market trends overview:
- Eight out of 10 consumers reported undertaking energy saving projects in Q4, a modest increase on the long term trend.
- Lighting-based technologies continue to dominate, with 8 out of 10 active consumers choosing to install high efficiency replacements.
- Solar generation saw a jump in uptake, with 4 out of 10 active consumers installing in Q4.
- Typical project spending rose to £90k from a £60k median value.
- Performance measurement saw strong deployment amongst consumers, with a material increase in awareness of good practice performance measurement standards.
Download the full report here.
Volume 14 of the Energy Efficiency Trends report assessed consumer and supplier market activity in the fourth and final quarter of 2015 (October - December). The report broadly shows the continuation of key trends reported in Q3.
Consumer respondents remained upbeat, taking a positive and progressive overall outlook. The report identified that more than eight out of 10 consumers had commissioned energy efficiency projects during the quarter, up from the long term trend of seven out of 10.
This growing consumer confidence was reflected in financing terms by the continuation of the emerging trend in the use of combination funding (i.e. in-house and external finance used together). This trend has been reported during 2015 and continued into Q4, with around four out of 10 projects now funded using at least some external finance.
Q4 saw a material increase in median investment values, which had dipped over 2015, back towards the long-term trend of around £100k per project. Financial payback periods have also largely come back to the long-term trend line following a dip in Q1 and Q2 2015. The median payback was reported in Q4 to be around four years.
In terms of where this investment is going, lighting-based technologies continued to outperform other energy-saving technologies, with both high efficiency lighting and controls enjoying material increases in Q4. However, there was also a surge in solar PV projects which resulted in this renewable technology moving up the leader board.
Offices (22%) continued to lead the way as the property type most likely to benefit from building upgrades, although with 16 other categories also listed, a wide range of building types are currently benefiting from energy-saving investments.
Use of good practice performance measurement (M&V) saw some interesting changes in the quarter. Not only was there growth in reported use, but also a material decline in respondents reporting that they didn't know if investment saving performance was being measured for their projects. This potentially points to rising levels of M&V awareness within the sector.
By contrast, supplier responses were less buoyant than those of their consumer peers. The market monitor, which combines trends in supplier order books, staffing levels, sale prices and government action, fell for the fourth consecutive quarter. Confidence has been affected by a continued downward trend in national orders, however, overseas orders and sale prices rose, giving overall stability over the year.
A strong trend that emerged over 2015 was a shift away from indifference with regards to the Government's management of energy efficiency policy. Just 7% of respondents cited ‘neutral' views in Q4 and there was a material increase in those considering the Government's management of energy efficiency policy as ineffective.
Commenting on the findings, Ian Jeffries, Head of Performance Management at EEVS, said “Our final report for 2015 paints something of a mixed picture. Suppliers reported an uphill struggle in Q4 2015, perhaps in response to increasing levels of competition.”
“By contrast, demand for energy savings appears strong, with consumers reporting increasing levels of activity, including an uptick in solar activity - perhaps made with an eye to FiTs changes. This focus on renewables could have had a negative impact on energy efficiency investments this quarter, but this did not happen, and lighting technologies in particular enjoyed demand growth.”
“A further emergent trend this quarter relates to growth in use of performance measurement and verification (M&V). Largely overlooked by consumers to date, this general growth in awareness levels is very positive; good quality M&V has a critical role to play both in terms of proving investment returns and helping consumers understand the risk profile of larger investments.”
Jason Thackray, Head of Energy Services, Bellrock, said “This report makes particularly interesting reading not least as the conclusions reflect almost four years of data capture.”
“Lighting efficiency remains the key focus for capital projects. Although only 4% of commissioned projects are in schools, our experience tells us that these are invaluable opportunities not just for the savings they generate, but also to engage students with a live case study as part of the curriculum and debate the environmental consequences of energy consumption.”