High energy prices have caused SMEs to express interest in investing in energy efficiency and renewable energy sources (RES). Every third small or medium-sized company intends to invest in solutions that will help reduce energy costs in the future and will protect against the risk of energy shortages – these are the conclusions of the ING Bank Poland report containing the results of the GFK Polonia research “Polish business reaction to the 2022 energy shock. The price increases, the cost cuts, and the green investments”.
A survey conducted among small and medium-sized enterprises shows that as many as 70% of them are concerned about access to energy and fuels in the coming months. The difficult energy situation makes companies struggle with higher operating costs – most often (26%) believe that fuel and energy prices have risen between 50% and 80%. Almost all (95%) of the surveyed companies reacted to the increased costs of energy and fuels by raising the prices of their products or services.
The report shows that higher energy prices in wholesale markets contributed to a significant increase in producer and consumer prices, but this was not automatic and extended over time. Producer prices depend on previous agreements and conditions of competition as well as the possibility of substitution of energy carriers. The retail electricity prices in 2022 changed slightly – as a result of the increase in tariffs for households and the reduction in indirect tax rates at the beginning of the year.
The companies try to adapt to the current situation by looking for cheaper suppliers or materials – 77% of SMEs do so. In turn, 36% of the companies are interested in “green investments”. The awareness has grown that increasing energy efficiency and own energy sources are in many cases becoming elements of safety and cost reduction. Every fifth company has started or is planning investments in thermal modernization, and in the case of renewable energy – 17% of the respondents carry out such investments or plan them (e.g. installation of photovoltaic panels). In turn, every third company planning or investing in RES already has such a solution, but will continue to expand or already expand investments in this area. The enterprises are also modernizing production lines to be more energy-efficient – 15% do so. Understandably, these are mainly industrial companies that are characterized by higher energy consumption than services or construction. The current energy crisis may therefore become an impulse to accelerate the energy transformation.
“The current situation in global markets and the turmoil in the raw materials and energy sectors show how much actions are needed to be related to the energy transformation. It is worth taking them to increase the possibility of producing green energy. The more so as switching to renewable energy or increasing its share is more and more profitable and increases the company’s resistance to external shocks. Carrying out a business transformation in line with the idea of sustainable development and ESG criteria supports building the long-term value of the company and secures it for the future. We have experience in the implementation of pro-ecological investments and we are happy to share our expert knowledge with customers. We have an offer that allows financing solutions that will contribute to reducing conventional energy consumption and increasing clean energy. We see a growing interest in this offer,” – said Ewa Łuniewska, Vice President of the Management Board of ING Bank Poland.
The companies indicate the lack of available funds for this purpose as the reason for the lack of “green investments”. Every third company that does not plan and is not in the process of investing in renewable energy, waits for the availability of funds for this purpose, and the same number of entities expect better solutions at the state level (e.g. unlocking the possibility of building windmills, increasing the profitability of installing PV panels). Over 40% of companies that do not currently invest in RES declare that they do not rule it out in the future. More than half of industrial companies are ready to modernize their production lines if they receive funds for it. In turn, 30% are waiting for funds from, for example, EU sources.
“The powerful increases and fluctuations in the prices of energy, especially natural gas, are an unprecedented shock for Polish companies. The concerns about the availability and price of energy in companies are somewhat reminiscent of the health concerns after a pandemic. At this point, we appreciate how important energy is as a production factor – in all companies, not only energy-intensive ones. In the first reaction, the companies tried to pass on high energy costs to buyers but did so only partially. This means that they are observing the behavior of demand and they may have decided to spread the price increases of their products or services over time. As a result, the upward price adjustment will still take place in the form of the so-called secondary effects. The government shield or solutions for 2023 help smooth out the price increases and gain more time for actions and investments in energy-saving technologies and RES. Unlocking this potential is the right and sustainable recipe for improving energy security,” – comments Leszek Kąsek, the Senior Economist at ING Bank Poland.
The report uses the results of the quantitative study “The impact of high energy prices on business in the SME segment”, carried out using the CATI method among 300 companies by GFK Polonia at the request of ING Bank Poland in August 2022.
Source: the Bank`s press release dated October 18, 2022