In light of the spiralling cost of traditional forms of energy and an increasing urgency to hit clean energy targets, renewable energy solutions are becoming more attractive, which is why, more companies are investing in sustainability, cleantech and the drive to net zero. The period 2000 to early 2002 alone saw £80.95bn invested from 2,400 investors into the sector in the UK – equivalent to 18% of all European investment in the sector. Energy production had the highest level of investment at more than £20bn, followed by energy asset cleantech at £17bn.
In this article we look at some of the main sources of this funding.
Private and public grants
There is a diverse range of funding opportunities offered by private and public bodies for companies pursuing renewable energy and other green initiatives across the UK. Venture Capital firms continue to accelerate investment into cleantech. 2021 was a landmark year with Breakthrough Energy Ventures, Energy Impact Partners and Energize partners making major funding announcements totalling almost £5bn.
Ofgem, the energy regulator for the UK, regularly makes grants available for companies looking to help deliver net zero at the lowest cost to consumers in the UK. At the time of writing (Nov 2022), the £450m Strategic Innovation Fund (SIF) is looking to provide funds to companies looking to decarbonise gas and electric energy distribution, and reduce dependency on fossil fuel imports. See the Ofgem website for the latest funding news and initiatives.
Meanwhile the South East New Energy (SENE) Grant from the European Regional development Fund (ERDF) is offering up to £30,000 to SMEs in Essex, Kent and East Sussex for companies looking decarbonise their operations.
Government schemes
Given the UK’s ambitious CO2 and clean energy targets, the government is offering many sources of funding for companies developing renewable and clean energy solutions. At the end of 2022, the UK government announced funding of over £65m investment would go into accelerating the development of new green technologies.
One such initiative is the Artificial Intelligence for Decarbonisation Innovation Programme, Aimed at businesses, as well as research bodies, the Department for Business Energy and Industrial Strategy (BEIS) has created s programme supporting the development of AI technology for decarbonisation applications to support the transition to net zero. Grants are available up to a maximum value of £500,000. This is just one of several initiatives currently underway by BEIS. You can stay up to date with their latest initiatives here.
Another endeavour is the Green Heat Innovation Support Programme (GHISP). Through this initiative, the Scottish government is making capital grant funding of £17.6m available to those working within the green heat market, including energy efficiency products, heat pumps and networks, thermal storage and enabling solutions.
More cleantech funding on the way
Traditional energy firms, such as Shell are joining those committed to sustainability. The oil giant is has claims to become energy-neutral by 2050. As part of that mission, in 2022, Shell promised to invest between £20bn and £25bn in UK energy systems with 75% of that destined for low and zero-carbon products and services.
Private banks are another avenue for companies looking for funding. NatWest has announced that it will provide £100bn of climate and sustainability funding and financing to customers by the end of 2025. The bank is also offering green loans with no arrangement fee for qualifying SMEs in sustainability areas, such as clean buildings, energy, transport and agriculture.
For regular updates on sources of funding in renewables, clean tech and sustainability in the UK, Grantfinder, Grantsonline and the Centre for Sustainable Energy are all excellent resources.
The right expertise for the right funding
Clearly, there are a huge number of sources of funding out there. Getting the right funding in place for your needs, means getting the right expertise when it comes to a funding round.
The demand for renewables and clean energy solutions means that the regulatory landscape is changing rapidly and companies must be able to stay up to date with these development. At JPP Law, our solicitors are experts in this fast evolving renewables arena, which is why we already have many clients within the sector – investors, as well as innovators. Whatever stage your business is at, we can help you make the most of this expanding sector and reap the benefits of what is out there.
Visit us here to find out more, or get in touch to book a free consultation.
