The UK Government is dedicated to meeting its net zero strategy “Build Back Greener” by 2050, with plans to make historic transitions to carbon-free alternatives.
The UK’s energy infrastructure is set to be transformed in the coming decades to deliver cleaner, more secure, and increasingly affordable energy for the long term.
Ultimately, budget constraints and conflicting financial priorities can mean that the adoption of green technology can be pushed to the bottom of the priority list, which is why it’s important to raise awareness around the alternative procurement routes available when it comes to investing in green technology.
The investment in and adoption of green technology is integral to supporting the UK to achieve these net zero targets and transforming the way our energy infrastructure operates, so making it easier for UK businesses to procure green technology is central to this transformation.
Jump to:
- What are green technologies and their benefits?
- Investment in green technology
- Asset finance solutions – facilitating new procurement pathways
- What are the benefits of asset finance solutions?
What is green technology and its benefits?
Broadly speaking, green technology is used to help mitigate or reduce the effects of human activity on the environment. Green tech encompasses a wide range of scientific research, taking into consideration energy, atmospheric science, agriculture, and hydrology.
Some examples include:
- Heat Pumps
- LED lighting solutions
- Carbon capture and storage
- Sewage treatment
- Biomass
- Renewable power generators
Green technology stands at the forefront of the net zero strategy, helping reverse the effects of climate change and introducing more sustainable processes to the UK energy system.
There are several benefits when it comes to investing in green technology, including;
Minimises environmental impact
The main benefit of investing in green technology is that it has a reduced impact on the environment while also improving efficiency. Green tech can be central to helping increase overall productivity while reducing waste, thereby creating a more effective way of working.
More cost-effective
“Going green” is widely regarded as a more profitable option, with green technologies enabling companies to save money due to operating more efficiently. Renewable energies such as solar energy and wind power are significantly cheaper to produce and have increased by an average of 44% and 23% per year respectively for the past three decades.
Enhances brand perception
Investing in green technology is a fantastic way of promoting a brand or business’s Environmental, Social and Governance (ES&G) commitments in real terms. It demonstrates dedication to meeting the government’s Net Zero Strategy and implies a willingness to embrace new methods of working.
Companies who are proactive in mitigating the impact their business is having on carbon emissions can not only tell a positive story from a PR perspective but can also leverage the opportunity of promoting trust and authority among both prospective and existing manufacturers and clients.
Investment in green technology
We are starting to see a cultural shift in how green technologies are viewed. Domestic solar panels and electric vehicles were once seen as expensive and unattainable but are rapidly becoming the norm.
According to the International Energy Agency (IEA), renewable power is set to break another global record, despite obstacles in the supply chain and rising costs. Many businesses are seeing the value of investing in green technology, acknowledging both the cost benefits and the Corporate Social Responsibility advantages it brings.
Organisations within the public and private sectors have their own net-zero targets which surpass or fall in line with the government’s target. The NHS has pledged to be net-zero by 2050, and private global conglomerates like Apple have promised to be carbon-neutral as soon as 2030.
Often, the main barrier to investment in green technologies is finding the without sacrificing investment into other core business activities. Procuring technology such as renewable power generators, heat pumps, LED lightbulbs or solar panels all offer longer-term cost-saving benefits but ultimately require significant upfront funding which can mean a significant period of time before the return on investment is realised.
Asset finance solutions
To assist UK businesses in taking more shared responsibility for the future of our planet, additional support and education are needed to help facilitate increased investment in green technology.
Core business activities typically take precedence and 2050 still feels a long time away, meaning that for many businesses, reducing their carbon footprint can often fall significantly down the agenda with more pressing matters often being addressed first.
Flexible finance solutions are a proven way of helping facilitate alternative procurement pathways for businesses looking to invest in green tech, but who don’t have the money to do so.
Bespoke finance solutions provide a structured financial agreement, whereby businesses can procure industry-leading equipment via an approved lease agreement, eradicating the need for upfront capital and allowing them to benefit from their new equipment immediately.
SAF works closely with clients throughout the UK to understand their individual sustainability agendas and develop a funding solution that aligns with both their CSR objectives and their financial drivers. This means businesses can invest in a cash-neutral and often cash-positive finance solution, whereby the ROI is the same as or exceeds their repayment costs.
This provides additional opportunities for companies who want to operate more sustainably, to invest in green technology utilising an increasingly financially viable solution.
What are the benefits of business finance solutions?
For suppliers working in the green technology space, particularly those who are at the cutting edge of developing new technologies, there are several benefits that come with offering a structured finance solution, including;
Increased awareness of customer challenges and obstacles
Offering prospective customers an alternative way to procure green technology shows an acknowledgement and understanding of the financial challenges they may face in securing funding outright.
This allows suppliers and manufacturers to establish a trusted relationship with their customers, developing bespoke finance solutions that align closely with their budget constraints and net-zero targets.
Stand out from competitors
During periods when budgets are strained, end users will look favourably at suppliers that offer flexible finance options as an alternative to capital purchase.
For companies under pressure to demonstrate their commitment to net-zero targets, an alternative finance solution will be an attractive option, allowing them to invest in green technology quickly, without having to sacrifice investment in other areas of the business.
Better flexibility
Business finance solutions can be developed fully bespoke, bringing together the cost of the product, equipment or service into a manageable fee which is spread across a structured repayment plan. This repayment plan can be spread across any term that suits the end user and their cashflow needs.
Businesses can start to benefit from the energy and cost-savings straight away, without having to pay for the investment in its entirety.
Increased resilience for the end user
With net zero targets becoming more and more prevalent for companies across the UK, businesses are starting to look at ways in which they can invest in green technologies to help transform how their businesses operate.
Early adoption of these technologies will increase future resilience, allowing them to benefit from more efficient ways of working, with a finance solution facilitating the payment being spread across an agreed repayment period.
Close the capital gap
Soaring energy prices, Brexit and ongoing financial uncertainty due to recent global events have meant that many businesses do not have as much available capital as they once did. Flexible finance solutions allow companies to develop a payment structure that suits them, allowing them to commit to sustainability targets, without compromising their financial position.
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At SAF Solutions, we’re experienced in providing tailored financial solutions across a range of sectors, including green technology, assisting UK businesses to invest in sustainable technologies via alternative procurement routes.
Find out more about our work in green technologies via our case study page.
Get in touch today to find out more about how we can support your business.