To what extent is Smart Energy adoption the future for businesses?

Smart energy technology has been adopted in household, commercial and industrial sectors due to its abilities in improving and facilitating energy efficiency and management. For these capabilities, smart energy is suitable for sustainability objectives; it directly reduces energy wastage and promotes its sustainable usage. 

The growing market desire for sustainability 

Smart energy is a part of the sustainability and green technology industries. These industries are both highly successful, predicted to increase to 61.92 billion USD in 2030 (Laricchia, 2023).  

There has also been pressure for sustainability adoption by employees. Half or so Gen Zs and millennials “are pressuring businesses to take action on climate change” (Segal, 2023) which may have led to how “90% of executives believe sustainability is important” and how “60% of organisations [already] have sustainability strategies” (Rafi, 2022). Furthermore, “55% of respondents [report] that they research brands’ environmental impact and policies before accepting a job” (Segal, 2023), showing how employee attraction is greatened upon adopting sustainability. 

Customers have also driven sustainability adoption. Across many industries “upwards of 70 percent of consumers … said they would pay an additional 5 percent for a green product” (2020), and “Nearly two-thirds of respondents said that they consider companies’ sustainability” (Segal, 2023). As a result of this, businesses which adopt sustainable objects will likely attain more revenue and financial success by attracting the eco-conscious market. 

Driven by global initiatives like the Sustainable Development Goals of the United Nations, legislation is another cause of business adoption of sustainability– explored here in two countries, the UK and Singapore. 

United Kingdom

The Climate Change Act 2008 and Paris Agreement have contributed to the UK in setting a goal to achieve net zero greenhouse gas (GHG) emissions by 2050. This has led to multiple other legislations stemming from it like the voluntary reporting of annual energy use and GHG emissions. 

Singapore

In 2022, Singapore’s Long-Term Low-Emissions Development Strategy reformulated their net zero emissions target to 2050. Legislations following this prospect include 2022’s “comply or explain” climate reporting. These legislations build upon the already present Emissions Report and Monitoring Plan, reviewed submissions that must disclose GHG emission sources, quantification methods, and quality management procedures. 

Predicting success of businesses utilising smart energy systems 

Customers prefer buying sustainable products even when there’s a higher price. Therefore, businesses which implement smart energy systems are better positioned to attract these sustainably-minded customers. 

There are also financial incentives in using smart energy systems. Within Singapore, energy efficiency initiatives such as the Energy Efficiency Grant (EEG) and the Energy Efficiency Fund (E2F) are used to support businesses in adopting energy-efficient technologies — with the EEG covering up to 70% of set-up costs for businesses in food services, food manufacturing, and retail sectors (GoBusiness, 2023). Similar government reductions in cash outflow have been seen globally following an effort to reduce climate change, e.g., the UK’s exemption on business rates for green technology (Department for Levelling Up, Housing and Communities, 2022). 

There are plenty of different options for smart energy adoption depending on the areas of greatest need, sector, business size, or other aspects. IoT Tribe has accelerated a number of smart energy startups driving huge impact to industry, including: 

Faradai , a smart energy start-up which utilises IoT technology in order to help enterprises measure and analyse their emissions data. It has reported its systems having a 200Mt carbon footprint reduction, and helping reduce businesses’ environmental effects by up to 20%.  

measurable.energy produces plug sockets that both minimize carbon emissions with machine learning and measure used energy and carbon emissions of the devices. As their sockets turn off automatically in periods of no activity, they have been reviewed to reduce energy use by up to 40%. 

As a result, as seen with these two smart energy businesses, the multitude of smart energy options may all be beneficial in any industry– reducing energy wastage and educating employees in sustainable practices.

Predicting the success of the smart energy industry 

Governments have been keen to invest in the smart energy industry for its bolstering of green programmes. 

United Kingdom

Innovate UK and the Engineering and Engineering and Physical Sciences Research Council funded £104million into smart energy businesses to demonstrate “the value of intelligently integrated, place-based energy systems across power, heat and transport” (UK Research and Innovation, 2023). Furthermore, as of 2017, “Innovate UK, Research Councils, and BEIS expect to invest around £265 million in smart systems research, development, and demonstration” (GOV.UK, 2021), hence adding to the UK’s interest in funding smart energy businesses.  

Singapore 

In Singapore, businesses are offered smart energy grants such as the Energy Market Authority’s Energy Storage Systems (ESS) Grant Call, annual grants for businesses who may produce “new technologies and solutions to support a low-carbon and sustainable future” (Energy Market Authority, 2023). As of their 2023 2nd ESS Grant Call, funded smart energy businesses involved solar photovoltaic performance and solar panel recycling which the EMA implored for its promotion of “clean energy adoption, [enhancing of] energy efficiency, and [improvement of] circularity in the clean energy sector” (Energy Market Authority, 2023). 

Barriers to adoption of smart energy systems 

Despite the availability of numerous smart energy systems and increasing consciousness of its adoption in consumer and employee minds, there are barriers to adoption. Firstly, the concern over ‘greenwashing’ has led to the small figure of only 47% of Americans who believe in a business’s environmental claims. This makes it difficult for smart energy businesses to grow, as their selling point of sustainability is disregarded by customers. 

An additional barrier to entry revolves around today’s tough economic environment. Capital restraints, corporate cost-cutting, and other survival and defensive strategies within the current economy may lead to a reduction in smart energy usage by businesses. Due to the high start-up costs of its implementation within the business, it may discourage businesses who are more stingy with their money and prioritise smart energy less. 

Even with these barriers to adoption, the predicted success of the smart energy industry (government financial incentives, desire by sustainability-oriented markets, etc) outweigh the minor issues of greenwashing or the economic environment. As the sustainability market continues to grow, the smart energy market follows– “anticipated to expand by 27.1% annually, from USD 122.2 billion in 2020 to USD 652 billion in 2026” (Almihat et al., 2022). 

IoT Tribe works at the intersection of accelerating cutting edge technology and driving its adoption in industry. If you’re looking to supercharge your business through disruptive technologies, reach out to us on contact@iottribe.org to discuss how we can fast track your technological adoption through our accelerator programmes, open innovation initiatives, and corporate venturing support.

References

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This article is written by Emily Xie for IoT Tribe