Barriers to Energy Efficiency in Swedish Non-Energy-Intensive Micro- and Small-Sized Enterprises—A Case Study of a Local Energy Program

Abstract

Improved energy efficiency has become a strategic issue and represents a priority for European competitiveness. Countries adopt various energy policies on local and national levels where energy audit programs are the most common energy end-use efficiency policy for industrial small-and medium-sized enterprises (SMEs). However, studies indicate that cost-efficient energy conservation measures are not always implemented, which can be explained by the existence of barriers to energy efficiency. This paper investigates how Swedish municipalities can support local micro-and small-sized enterprises with improved energy efficiency and the existence of different barriers to the implementation of energy efficiency. Relating this empirical case study to the theoretical barriers outlined in the text, this study found that the major explanatory factors related to non-implementation of cost-effective energy efficiency measures among micro-and small-sized industrial enterprises were bounded rationality (lack of time and/or other priorities), split incentives (having other priorities for capital investments), and imperfect information (slim organization and lack of technical skill). This study also found that information in the form of a report was the main thing that companies gained from working on the project "Energy-Driven Business". Notably, the study involved companies that had participated in a local energy program and, still, companies face major barriers inhibiting implementation, indicating a need to further study other alternative policy models and how knowledge transfer can be improved.

The Potential of Smart Technologies and Micro-Generation in UK SMEs

“…The key papers that exist (e.g., [6][7][8][34][35][36]) focus primarily on energy efficiency activities rather than micro-generation, target specific SME sectors or sizes, and concentrate on specific countries or regions within countries. For example, [6] focused on energy efficiency in UK SMEs, though it included both industrial and non-industrial SMEs; Trianni et al [7,34] investigated energy efficiency in industrial SMEs specifically in primary metals manufacturing in northern Italy; Backman [8] concentrated on energy efficiency in non-energy-intensive SMEs in Sweden; Pereira and Ferreira [35] explored energy efficiency in industrial SMEs in Portugal; and Onut and Soner [36] focused on energy efficiency in manufacturing-based SMEs in Turkey. Thus, a methodological approach that examines micro-generation in SMEs rather than energy efficiency, does not exclude participation based on SME sector or size, and focuses on the UK (which has received less attention than other countries with regards to DSM research on SMEs), provides an important part of the rationale for this part of the research.…”

“…In synthesising previous related research on the drivers and barriers to energy efficiency (rather than micro-generation) in SMEs (e.g., [6][7][8][34][35][36]), it is clear that the main barriers concentrate on three areas: economic, information and competing priorities. Economic barriers revolve around the limited availability of capital to meet the required upfront costs of energy efficiency [6,7,34,35], which has to be met within a context of meeting other investment priorities [35].…”

“…There is similarly an internal management push to ensure that payback periods for investments are less than two years [6], despite the cost-effectiveness of many energy efficiency technologies, such as insulation measures. Information barriers are primarily concerned with imperfect information and a lack of technical skills to process the information [8]. Linked to this is trust-the studies highlight that information about technologies, regulations and opportunities for financing are perceived as complicated or untrustworthy [7,34].…”

Energy efficiency in Swedish SMEs: Exploring barriers, knowledge creation and the role of municipal energy efficiency programs

“…As noted in the previous section, barriers hinder SMEs' implementation of cost-effective energy efficient measures; these barriers often take the form of lack of knowledge and time (Backman, 2017;Trianni et al, 2013). One type of response to this situation can be seen in various policy programs that aim to promote increased energy efficiency measures by focusing on changing the products and processes in SMEs (Biggart and Lutzenhiser, 2007).…”

“…One type of response to this situation can be seen in various policy programs that aim to promote increased energy efficiency measures by focusing on changing the products and processes in SMEs (Biggart and Lutzenhiser, 2007). These policy programs frequently provide advice through energy audit reports and investment plans in order to help SMEs overcome their barriers (Backman, 2017). This advice or information often takes the form of explicit knowledge, which may include lists of available technologies such as new and improved forms of lighting and lighting design, ventilation, heating, air conditioning, or control systems that will reduce energy use and costs if they are installed or used (Biggart and Lutzenhiser, 2007).…”