Accelerating Energy Efficiency

Accelerating Energy
Efficiency in Small and

Medium-sized Enterprises
Powering SMEs
to catalyse
economic growth
Policy
Pathway
INTERNATIONAL ENERGY AGENCY
The International Energy Agency (IEA), an autonomous agency, was established in November 1974.
Its primary mandate was – and is – two-fold: to promote energy security amongst its member
countries through collective response to physical disruptions in oil supply, and provide authoritative
research and analysis on ways to ensure reliable, affordable and clean energy for its 29 member
countries and beyond. The IEA carries out a comprehensive programme of energy co-operation among
its member countries, each of which is obliged to hold oil stocks equivalent to 90 days of its net imports.
The Agency’s aims include the following objectives:
n Secure member countries’ access to reliable and ample supplies of all forms of energy; in particular,
through maintaining effective emergency response capabilities in case of oil supply disruptions.
n Promote sustainable energy policies that spur economic growth and environmental protection
in a global context – particularly in terms of reducing greenhouse-gas emissions that contribute
to climate change.
n Improve transparency of international markets through collection and analysis of
energy data.
n Support global collaboration on energy technology to secure future energy supplies
and mitigate their environmental impact, including through improved energy
efficiency and development and deployment of low-carbon technologies.
n Find solutions to global energy challenges through engagement and
dialogue with non-member countries, industry, international
organisations and other stakeholders.
IEA member countries:
Australia
Austria
Belgium
Canada
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Secure
Hungary
Sustainable
Together
Ireland
Italy
Japan
Korea
Luxembourg
Netherlands
New Zealand
Norway
Poland
Portugal
Slovak Republic
© OECD/IEA, 2015 Spain
International Energy Agency Sweden
9 rue de la Fédération Switzerland
75739 Paris Cedex 15, France
Turkey
www.iea.org
United Kingdom
Please note that this publication United States
is subject to specific restrictions
that limit its use and distribution. The European Commission
The terms and conditions are also participates in
available online at www.iea.org/t&c/ the work of the IEA.
Accelerating Energy
Efficiency in Small and
Medium-sized Enterprises
Powering SMEs to catalyse
economic growth
The IEA Policy Pathway series

The Policy Pathway publications provide details on how to implement
the IEA 25 Energy Efficiency Policy Recommendations. Based on direct
experience, published research, expert workshops and best-practice
country case studies, the series aims to provide guidance to all countries on
essential steps and milestones in implementing energy efficiency policies.
Policy Pathways have been published on:
Modernising Building Energy Codes – to

Secure our Global Energy Future
POLICY
TE
A Tale of Renewed Cities – A policy guide on
PATHWAY
A how to transform cities by improving energy
LU
efficiency in urban transport systems
PL
A
Improving the Fuel Economy of Road

EV
Vehicles – A Policy Package

A

Energy Management Programmes for

Industry – Gaining through saving

Joint Public-Private Approaches for Energy

MO
Efficiency Finance – Policies to Scale up

T
Private Sector Investment

NI
Monitoring, Verification and Enforcement

EN
O – Improving Compliance within Equipment

T
R E M Energy Efficiency Programmes

IMPL Energy Performance Certification of
Buildings – A Policy Tool to Improve
Energy Efficiency
© OECD/IEA, 2015
The Policy Pathways series is designed for policy makers at all levels of
government and other relevant stakeholders who seek practical ways to
develop, support, monitor or modify energy efficiency policies. The Pathways
can also provide insights into countries’ specific policy contexts, so that each
country derives the maximum benefit from energy efficiency improvements.
POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES 1

Table of contents
Acknowledgements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Realising the potential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Introduction 12
SMEs play a central role in economies around the world 13
SME energy consumption and savings potential 14
Benefits of improved energy efficiency for SMEs 15
Broader policy objectives for governments 17
Benefits for utilities and other stakeholders 18
Barriers to energy efficiency improvement in SMEs 18
Challenges that programme designers and managers may face 19
Key elements of an effective programme 20
The policy pathway to developing and implementing energy efficiency programmes for SMEs . . . . . . . . 22
Plan 23
Step 1: Develop programme rationale 23
Step 2: Consult with stakeholders 27
Step 3: Design the programme 27
Step 4: Engage partners and source funding, staffing and other resources 37
Implement 40
Step 5: Pilot the programme 40
Step 6: Launch the programme 41
Step 7: Manage the implementation process 42
Monitor 47
Step 8: Collect and disseminate data 47
Evaluate 50
Step 9: Evaluate programme impacts 50
Step 10: Adapt the programme and plan next steps 53
SME programme case studies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Introduction 55
Combining access to finance with business information and capacity building: The EBRD’s Sustainable
Energy Financing Facility (SEFF) model 55
Background 55
© OECD/IEA, 2015
Launching the SEFF model in Bulgaria 56

Capacity building with local banks in Turkey 57
Supporting SEFFs with policy shaping and direct financing in the Western Balkans 58
Lessons from the SEFF experience 59

Applying the SEFF lessons 59
Conclusions 60
Australia: Using industry associations and non-profit organisations educate SMEs 60
Background 60
Programme implementation 61
Company-level impacts 62
Programme evaluation 63
Lessons from the EEIG programme 64
Conclusions 66
Supply chains present major energy efficiency opportunities 66
Background 66
IKEA achieves a 25% improvement in its supply chains 66
Johnson Controls shares experience to cut supply chain energy demand 67
Walmart improves energy performance of its supply chain in China 67
Government programmes can provide strong incentives 67
Other stakeholders can also play an important role 68
Lessons from supply chain projects 68
Conclusions 69
Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Better engagement with SMEs 70
Capacity building is important for SMEs and their partners 70
Cost-effectiveness is possible 70
Getting better data 71
Monitoring and evaluation are essential 71
Need to scale up 72
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
List of figures
Figure 1. Strategies for developing energy efficiency programmes for SMEs 21
Figure 2. The spectrum of financing solutions for SMEs 34
Figure 3. One approach to assessing cost-effectiveness 51
Figure 4. The SEFF programme model 57
Figure 5. Impact of the EEIG programme on expectations of return on investment 65
© OECD/IEA, 2015
List of tables
Table 1. IEA Policy Pathway: Energy efficiency programmes for SMEs 9
Table 2. Types of energy efficient equipment, controls, software and services 17
4 POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES

Table 3. Tailoring information to SME needs 30
Table 4. Financing options for SME energy efficiency 35
Table 5. Energy saving data 48
Table 6. Evaluation tools 52
Table 7. Technical support provided by a SEFF Project Implementation Team 57
List of boxes
Box 1. What are SMEs? 12
Box 2. Modest enterprises, large potential 15
Box 3. Energy efficiency programmes enable benefits beyond energy savings 16
Box 4. Using assessments to understand scale and scope 24
Box 5. Surveying existing policies and programmes in India 26
Box 6. Engaging with stakeholders 27
Box 7. Effective targeting and tailoring 29
Box 8. Building a network of support 31
Box 9. Building finance sector skills in China 33
Box 10. Examples of financing solutions for promoting energy efficiency in SMEs 36
Box 11. Piloting in the chemicals industry 40
Box 12. Raising programme awareness 42
Box 13. Streamlining reporting requirements and working with vendors 43
Box 14. Energy audits and access to funding 44
Box 15. Energy management systems are relevant for SMEs 45
Box 16. Communicating results in Japan 49
Box 17. Evaluation can demonstrate net benefits 51
Box 18. An EEIG project example 62
© OECD/IEA, 2015

Acknowledgements
This publication was prepared by the International Francis d’Auriac, Total; Dominik Bach, kfW
Energy Agency under the authority of Kamel Ben Bankengruppe; Neus Barres Badia, European
Naceur, Director of Sustainable Energy Policy and Industrial Insulation Foundation (EIIF); Marine Beaud,
Technology (SPT). Strategic guidance and input Swiss Federal Office of Energy (BFE); Ritu Bharadwaj,
were provided by Philippe Benoit, Head of the Institute for Industrial Productivity, India (IIP);
Energy Efficiency and Environment Division, and Somnath Bhattacharjee, IIP; Dan Bidois, Organisation
Sam Thomas, Senior Programme Manager in the for Economic Co-operation and Development
Energy Efficiency Unit. The lead authors were (OECD); Peter Botschek, Cefic; Renske Bouwknegt,
Vida Rozite, Energy Efficiency Unit, and Patrick Ideate; Randall Bowie, Rockwool International A/S;
Crittenden, Sustainable Business Pty Ltd. Ella Marika Bröckl, Gaia Consulting; Stefan Büttner,
Rebalski and Peter Warren, Energy Efficiency Unit Fraunhofer IPA; Kazim Karabekir Buyukunal, General
trainees, provided valuable contributions. Araceli Directorate of Renewable Energy, Turkey (YEGM);
Fernandez Pales and Kira West (Energy Technology Enrico Cagno, Politecnico di Milano; Ben Cattermole,
Policy Division), Fabian Kesicki (Directorate of Global DFID Southern Africa; Catherine Cooremans,
Energy Economics) and Audrey Glynn-Garnier, University of Geneva; Erwin Cornelis, VITO NV; Kim
Lorcan Lyons, Sara Pasquier, Melanie Slade and Crossman, Energy Trust; Guilhem Cuny, AFNOR;
Leonie Wilson (Energy Efficiency Unit) provided Maja Dahlgren, Swedish Energy Agency; Andre
inputs and support. Defontaine, US Department of Energy (DoE); Annie
Degen, United Nations Environment Programme
Fani Kallianou de Jong, European Bank for (UNEP); Sergio Dias, Sergio Dias Consulting; Bettina
Reconstruction and Development (EBRD) Energy Dorendorf, European Commission; Bilal Duzgun,
Efficiency and Climate Change team, provided YEGM; Leonid Dvorkin, AFNOR Russia; Hans Jakob
strategic insights and case studies. Georgia Presutti, Eriksen, Danish Ministry of Climate, Energy and
Australian Department of Industry and Science, Building; Pedro Faria, CDP; John Fawcet, Databuild
provided a case study and inputs. Research & Solutions Ltd; Tobias Fleiter, Fraunhofer
The work was supported by financial contributions Institute for Systems and Innovation Research; Rana
from the EBRD Shareholder Special Fund, Ghoneim, United Nations Industrial Development
the Australian government and the Japanese Organization (UNIDO); Vincent Gilles, Credit Suisse;
government. The International Partnership for Andreas Guertler, EIIF; Marcin Jamiołkowski,
Energy Efficiency Cooperation (IPEEC) task group Polish National Fund; Wookyung Jung, OECD;
Energy Management Action Network (EMAK) Mirjam Harmelink, Harmelink Consulting; Evgenij
provided contributions and guidance. Inshekov, Training Centre for Energy Management
of Kiev Polytechnic Institute; Rod Jansen, Energy
The publication was edited by Hannah Holmes in Demand; Ágnes Kádárné Horváth, University
and Andrew Johnston. Production assistance was of Miskolc; Zoltán Kapros, Hungarian Energy
provided by the IEA Communication and Information and Public Utility Regulatory Authority (MEKH);
Office: Muriel Custodio, Astrid Dumond, Rebecca Juergen Kaeser, Energy Consulting Allgaü; Erik Kaye,
Gaghen, Bertrand Sadin and Therese Walsh. Climate Action Secretariat BC Canada; Etienne Raffi
Kechichian, International Finance Corporation (IFC);
A workshop and numerous interviews were held Niro Kitagawa, Energy Conservation Center, Japan
to gather essential input to this publication.
© OECD/IEA, 2015
(ECCJ); Mirko Krück, LEEN GmbH; Benoit Lebot,

Participants contributed valuable new insights,
International Partnership for Energy Efficiency
feedback and data for analysis. This publication
Cooperation (IPEEC); Petra Lackner, Austrian
benefited from review, comments and inputs by a
Energy Agency; Yves Lenain, Union des Industries
broad range of stakeholders, including:
Chimiques (UIC); Marc Lendermann, German Federal

Ministry for Economic Affairs and Energy (BMWi); Scalia, European Apparel and Textile Confederation
Hannes MacNulty, consultant; Christophe Madam, (Euratex); Naoki Sekiguchi, OECD; Ali Abo Sena,
Fedesco; Jean-Jacques Marchais, Schneider Electric; Egypt National Cleaner Production Centre; Yasser
Aimee McKane, LBNL; Brooke McMurchy, Ministry Sherif, Environics; Girish Sethi, The Energy and
of Energy and Mines BC Canada; Charles Michaelis, Resources Institute, India; Cristina Maria Simoes
Databuild Research & Solutions Ltd; Emma Mooney, Cardoso, Directorate General of Energy and Geology
consultant; Yuko Nagata, UNIDO; Junko Ogawa, in Portugal; Upinder Singh Dhingra, The Energy
Institute of Energy Economics, Japan (IEEJ); Zitouni and Resources Institute, India; Jonathan Sinton,
Ould-Dada, UNEP; Kit Oung, consultant; John World Bank; Ibrahim Soumaila, ECOWAS Centre for
O’Sullivan, Sustainable Energy Authority of Ireland Renewable Energy and Energy Efficiency; Jean-Marc
(SEAI); Jenna Owen, UK Department of Energy and Staudt, myenergy Luxembourg; Michael Steurer,
Climate Change (DECC); Sameer Pandita, Bureau Eurochambres; Celine Tougeron, EC-EASME; Andrea
of Energy Efficiency, India; Alexios Patelias, IFC; Trianni, Politecnico di Milano; Hannu Vaananen,
Richard Prem, Efficiency Consulting GmbH; Kyng ABB group; Ronald Vermeeren, RVO; Nattakorn
Wan Rho, KEMCO; Arkinstall Reid, BC Hydro; Julia Visissopa, Ministry of Energy, Thailand; Matthias
Reinaud, European Climate Foundation (ECF); Sylvie Voigtmann, Efficiency Consulting GmbH; Maarten
Riou, ADEME; Clemens Rohde, Fraunhofer Institute van Werkhoven, TPA Advisors; Rita Werle, Impact
for Systems and Innovation Research; Katarzyna Energy Inc.; Wan Yang, IIP China; Susanne Wendt,
Dziamara Rzucidlo, Polish National Fund for Physikalisch-Technische Bundesanstalt (PTB).
Environmental Protection and Water Management;
Patrik Thollander, Linköping University; Mauro
© OECD/IEA, 2015

Executive summary
Small and medium-sized enterprises (SMEs) are a Improving SMEs’ energy efficiency is a key way to
central part of economies worldwide, comprising increase their profitability and competitiveness.
99% of enterprises and providing about 60% of As well as reducing SMEs’ energy costs, greater
employment. They contribute around 50% of energy efficiency can improve SMEs’ product quality
global gross value added and from 16% to around and output, reduce risks and liabilities, enhance
80% of gross domestic product (GDP), depending resilience and enable new business opportunities.
on the country’s economic structure. Increasing Even where fuel prices are low, energy price
their energy efficiency offers considerable value volatility and uncertainties hamper SME growth;
for economies, societies and SMEs themselves. energy efficiency can reduce exposure.
Implementation of energy efficiency improvements
in SMEs is lagging, however, because of a lack of Improving energy efficiency in SMEs also
information, technical expertise and funding. This contributes to wider policy objectives, such as
Policy Pathway describes how well-designed energy boosting employment opportunities, expanding
efficiency programmes can address these barriers, the market for energy-efficient goods and services,
unlocking a wide range of benefits. improving energy security, reducing greenhouse
gas (GHG) emissions and local air pollution,
SMEs are important drivers of economies around and enabling investments in additional power
the world. In the European Union, SMEs employ generation to be deferred.
almost 90 million people, generate about 1.1 million
new jobs per year and contribute almost 30% SMEs face various barriers that deter them from
of GDP, worth USD 5.5 trillion. In China, SMEs adopting energy efficiency measures. SMEs seldom
account for nearly 60% of GDP, amounting to have enough time and resources to explore energy
around USD 6.6 trillion, and account for 60% of efficiency options, and lack information about
manufacturing output. In India, SMEs produce 45% where and how energy is used in their companies.
of manufacturing output. SMEs usually do not have internal capacity to
develop and implement energy efficiency projects,
SMEs also drive innovation. They carry out nearly and rarely view efficiency as a priority, especially
20% of research and development (R&D) in the during the early SME development phase. In
United States and the European Union, and account many cases, their access to financing for energy
for more than half of R&D in some OECD countries. efficiency measures is constrained by insufficient
In the United States, more than 35% of transnational capacity to develop bankable projects with financial
patents are filed by SMEs. In China, SMEs account institutions, which often remain reluctant to provide
for more than 60% of domestic patent applications financial products due to perceived risks and a lack
and 82% of new product output. In Australia, almost of suitable financial products.
90% of the businesses engaging in innovative
activity are SMEs. Countries can help SMEs to overcome these barriers
by providing energy efficiency programmes.
Individually SMEs consume modest amounts of Large industrial energy users are increasingly
energy, but collectively their energy demand is benefiting from such programmes, but industrial
considerable. According to IEA estimates, SMEs and commercial SMEs are receiving little support, as
consume more than 13% of total global energy their energy use and potential for energy efficiency
© OECD/IEA, 2015
demand, around 74 exajoules (EJ). Cost-effective goes largely unnoticed.

energy efficiency measures could shave off as much
as 30% of their consumption, namely 22 EJ, which Some programmes are under way around the
is more energy than Japan and Korea combined world to help SMEs realise their energy efficiency
consume per year. potential, but they are still small in scope and
typically have a short duration. Their results are

generally positive, but they are rarely replicated This Policy Pathway sets out how governments and
and scaled up to assist larger numbers of SMEs. other stakeholders can design and implement energy
Governments and other stakeholders grapple with efficiency programmes that deliver cost-effective
the challenge of developing effective programmes savings to SMEs. The Pathway is presented in ten
that can reach the large number of very diverse steps, divided into four phases (Table 1). These steps
SMEs operating within vastly differing sectors. have proven effective in a variety of energy efficiency
programmes developed specifically for SMEs.
Table 1 IEA Policy Pathway: Energy efficiency programmes for SMEs
PHASES STEPS
1 Develop programme rationale
2 Consult with stakeholders

PLAN
3 Design the programme
4 Engage partners and secure funding, staffing and other resources
5 Pilot the programme
IMPLEMENT 6 Launch the programme
7 Manage the implementation process
MONITOR 8 Collect, review and disseminate data
9 Evaluate programme impacts

EVALUATE
10 Adapt the programme and plan next steps
The planning phase involves tailoring each opportunities. To learn about the benefits
programme to meet the specific needs and of energy efficiency, SMEs need information
circumstances of a sub-section of the SME sector. tailored to their specific needs and delivered in a
A successful planning process considers barriers convenient form from a trusted source.
between SMEs and improved efficiency, and seeks
benefits from engaging with stakeholders and zz Expertise and capacity building: Unlike
© OECD/IEA, 2015
coordinating with existing programmes. Successful larger businesses, SMEs can rarely nurture
programmes include three core components: in-house expertise on energy efficiency; they
are more likely to rely on external advice and
zz Information: SMEs often focus on the day-to-day support for implementation. Energy efficiency
tasks of the core business, leaving limited time programmes should therefore aim to build the
and resources to investigate energy efficiency capacity of energy consultants and financial

institutions as well as that of SMEs themselves. zz Take advantage of existing policies and
Successful programmes incorporate training, programmes. Where another successful SME
the development of professional networks and programme is already in place, efforts should be
practical guidance material such as handbooks. made to form partnerships and build on existing
efforts and resources.
zz Financing: SMEs face particular difficulties in
accessing the financial resources required to zz Make it easy for SMEs to access assistance.
purchase, install and operate more efficient SMEs’ limited resources and their focus on
equipment or to implement more efficient day-to-day operations mean that a successful
operating practices, so access to finance tailored programme must be easy to access and
to their needs is vital. Successful programmes implement.
support the development and promotion of
alternative financing measures that are more The monitoring phase involves collecting,
accessible to SMEs than commercial loans, such reviewing and sharing data so that programme
as grants, dedicated credit lines and creative effectiveness can be assessed on a regular basis
approaches such as leasing options for more and the programme adjusted to ensure maximum
energy-efficient equipment. results. It is important to decide what indicators
will be used in consultation with partners and
The implementation phase focuses on promoting stakeholders and to convey this to participants at
the programme, engaging stakeholders and the outset of the programme. Attention should be
managing the programme. It is crucial to ensure that placed on indicators beyond just energy savings.
the programme meets SME needs and constraints, Care should be taken not to overburden SMEs with
and that the components are effectively linked. Key reporting requirements and to focus on data that
success strategies include: is relevant to SMEs. This phase can help ensure that
the programme meets SME needs, and can identify
zz Identify your SME target group. To maximise possibilities to improve participation and access to
benefits, a programme should consider company programme support.
size, ownership structure, industry sector, energy
intensity, energy supply issues and geographic The evaluation phase seeks to determine
location. programme results, impacts and success factors,
assess cost-effectiveness and the effectiveness of
zz Identify benefits beyond energy and cost instruments used. A plan for collecting data and
savings. Energy efficiency investments are more information needed for the evaluation should
compelling for SMEs (and their financiers) when be devised at the outset of the programme.
they deliver multiple returns, such as enhanced Opportunities to build data collection into the
productivity, product quality and safety. programme should be utilised; for example, audits
zz Build stakeholder partnerships. The reach can provide information on the baseline and results.
and effectiveness of an SME programme is This phase can provide valuable contributions to
greatest when it unites governments, industry future efforts to expand and scale up SME energy
associations, financial institutions, and service efficiency programmes.
and equipment suppliers. The key messages in this Policy Pathway are
© OECD/IEA, 2015
zz Combine measures to provide information, elucidated by case studies that show how to
expertise and financing. An integrated effectively combine information, capacity building
approach to programme design and and access to finance; how to utilise existing
implementation makes for a more efficient and networks and communication channels to target
effective process.

SMEs; and how to take advantage of existing zz A selection of programmes aimed to improve
business relationships to ensure mutual benefits. energy efficiency in supply chains, including a
These case studies are: US Department of Energy pilot programme, that
show the value of business-to-business energy
zz The European Bank for Reconstruction and efficiency measures and how governments and
Development’s Sustainable Energy Financing other stakeholders can provide incentives to
Facility, which combines information and stimulate such initiatives.
capacity building (both for SMEs and local banks)
and access to finance. SME energy efficiency programmes can provide
important benefits in mature economies, emerging
zz The Australian Energy Efficiency Information economies and developing countries. This Policy
Grants, which leveraged existing networks and Pathway provides guidance that can be of use when
information channels by providing funding to developing and improving existing programmes,
business associations and other intermediaries as well as when starting to explore the possibility of
that enabled them to provide energy efficiency setting up new programmes.
information and services to SMEs.
© OECD/IEA, 2015

Realising the potential
Introduction
There are compelling arguments for an increased SMEs by helping them to cut costs, freeing up
focus on energy efficiency in small and medium- resources that can be invested in more productive
sized enterprises (SMEs). SMEs play a vital role in activities, and can make them more resilient and
the economy (Box 1). They provide the majority of more competitive. Even though SMEs individually
employment opportunities, contribute significantly consume moderate amounts of energy, collectively
to GDP and export income, and play a key role in they account for a significant portion of global
driving innovation. Energy efficiency can strengthen energy demand.
Box 1 What are SMEs? Union. However, caps vary from 20 employees
in New Zealand to 1 000 employees in China.
The United States considers SMEs to include
SMEs are defined by the OECD as non-subsidiary, companies with fewer than 500 employees.
independent companies that employ less than Annual sales, revenue, assets, capital or
a given number of employees. This number investment may also be used to differentiate
varies across countries. Many countries break between SMEs and large organisations. In India,
down SMEs into micro, small and medium-sized for example, the definition of SMEs is based on
enterprises. The most frequently used upper investment in machinery.
limit is 250 employees, such as in the European
As well as cost savings, energy efficiency can deliver competitiveness and growth as well as achieving
a wide range of other benefits that can help SMEs other benefits for society and the economy.
grow and develop, for example by improving
productivity and product quality. Energy efficiency The first section of this publication describes
in SMEs can also contribute to broader benefits the importance of SMEs to the economy, SME
for societies and economies, reducing reliance energy demand and energy efficiency potential,
on energy imports and the need for investments benefits beyond energy savings, barriers to the
in additional generation capacity, and lowering uptake of energy efficiency measures, and some
environmental impacts, such as GHG emissions and of the challenges facing programme designers
local air pollution. and managers. The second section provides
guidance on how the barriers and challenges can
Despite these many benefits, implementation be addressed. SME energy efficiency programmes
of energy efficiency measures in SMEs is lagging encompass a wide range of initiatives ranging from
because of pervasive barriers such as insufficient awareness campaigns to audit schemes and energy
© OECD/IEA, 2015
information, resources and technical expertise, and efficiency networks. Instead of describing different
difficulty in accessing the necessary funding. Energy types of initiatives, the publication focuses on core
efficiency programmes can be instrumental in elements, success factors and key considerations
addressing these barriers. Such programmes can be that are relevant irrespective of the type of
an integral part of efforts to support SME profitability, programme. These are illustrated by examples from

implemented SME energy efficiency programmes. The target audiences of this publication are central
Successful and promising approaches are further government departments, ministries or agencies
illustrated and explained in three case studies. tasked with promoting energy efficiency, and
other stakeholders involved in energy efficiency
programmes aimed at SMEs.
SMEs play a central role in economies around the world

SMEs play a major part in the economic landscape 60% of GDP, amounting to around USD 6.6 trillion4
in many ways: they are numerous, create many jobs, (OECD, 2013). In Egypt, SMEs account for nearly 80%
produce a large part of GDP, generate exports and of total economy-wide GDP. SMEs’ contribution to
are major drivers of innovation. GDP is growing in emerging economies. In Malaysia,
for instance, SME contribution to GDP grew at an
Globally, SMEs constitute around 99% of all average compound annual growth rate (CAGR)5 of
enterprises. SMEs employ approximately 60% more than 6% between 2005 and 2013, higher than
of private sector workers (Edinburgh Group, the CAGR of the overall economy (SME Corporation
2013). SMEs in the formal sector1 in the Emerging Malaysia, 2015).
Asia countries account for 50% to 80% of total
employment (OECD, 2013). In the European Union, SMEs produce significant shares of countries’
where SMEs employ almost 90 million people, manufacturing output: 45% in India, for example,
they generate about 1.1 million new jobs per year and 60% in China (Zhu et al., 2012). SMEs account
(European Commission, 2014a). Globally, 85% for a large share of exports in many countries: 68%
of total employment growth was attributable to in China and 40% in India (Zhu et al., 2012; SME
SMEs on average between 2002 and 2010 (de Kok Chamber of Commerce of India, 2015).
et al. 2011). To take an example from the southern
Mediterranean region, Egypt’s business landscape Despite limited resources, SMEs drive innovation.
is dominated by SMEs (90% of active enterprises) They carry out nearly 20% of R&D in the United
and they play a key role in the country’s economy, States and the European Union, and far more than
accounting for 75% of total employment. half of R&D in some OECD countries, such as Iceland,
Norway, Poland and Portugal (OECD, 2013). In the
SMEs contribute about 50% of global gross value United States, more than 35% of transnational
added2 and 16% to around 80% of GDP, depending patents are filed by SMEs. In the United Kingdom,
on the country’s economic structure.3 In 2013, SMEs SMEs obtain 50% of all patents. In China, SMEs
generated USD 4 023 trillion in value added in the account for more than 60% of domestic patent
European Union, equivalent to almost 30% of GDP applications and 82% of new product output (Zhu et
(EC, 20214a). In China, SMEs account for nearly al., 2012). In Australia, almost 90% of the businesses
engaging in innovative activity are small enterprises
1. The formal sector consists of enterprises that are registered, (Connolly et al., 2012).
organised and regulated. The informal sector is characterised by
units engaged in the production of goods or services operating The SME segment is growing in many countries,
at a low level of organisation, with little or no division between
particularly in countries that are reorienting their
© OECD/IEA, 2015
labour and capital as factors of production. Labour relations are

based mostly on casual employment or social relations rather than economies towards services. The number of SMEs is
contractual arrangements with formal guarantees. projected to grow annually by 8% in China and by
2. Gross value added provides a dollar value for the amount of goods
and services that have been produced less the cost of inputs and raw
10% in Thailand.
materials that are directly attributable to that production.
3. Countries use different methodologies to calculate the 4. Corresponding to USD 11 trillion purchasing power parity (PPP) GDP.
contribution of SMEs to GDP. 5. Based on constant 2005 prices.

SME energy consumption and savings potential
SMEs represent a large but often overlooked part of 50% of total business electricity demand.7 In
the energy consumption landscape. Their share of some countries, the share of SME energy use is
energy demand differs from country to country, but even higher: in Italy, manufacturing SMEs’ energy
the IEA estimates that SMEs account for at least 13% demand is 70% of the total industrial sector energy
of global final energy consumption annually (74 EJ).6 demand (Trianni and Cagno, 2011). In China,
Although there are data and methodological manufacturing SMEs consume 2.5 times the energy
challenges in calculating these figures with of large manufacturing enterprises (IFC, 2012).8
precision, it is clear that SMEs are important energy
consumers, particularly in urban areas – which are At all scales of the commercial and industrial sectors,
anticipated to grow – and in the service sectors, improved energy efficiency holds significant and
which countries like China and others are looking to profitable potential (Box 2). Numerous studies have
stimulate. indicated that the cost-effective savings potential of
SMEs is in the range of 10% to 30% of their energy
In the United Kingdom, SMEs account for around demand. The global energy demand of SMEs could
45% of total business energy use (Middlesex be reduced by 7-22 EJ with existing best available
University, 2009). In the United States, the energy technologies and practices.9
demand of manufacturing SMEs is about 5.4 EJ
or half of total final industrial energy demand 7. Australian Bureau of Statistics (2013), www.abs.gov.au.
(Trombley, 2014). Australian SMEs make up about 8. The definition of SMEs in China includes companies of up to 1 000
employees.
6. Globally, SMEs are estimated to account for at least one third of 9. Savings potentials vary across different sub-segments and regions.
total industrial energy demand and a third of service energy demand. Box 2 and the following paragraphs provide further illustrations of
The estimate does not include informal sector energy usage. savings potentials.
© OECD/IEA, 2015

Box 2 Modest enterprises, cost. Further relatively low-cost improvements –
large potential such as investing in sensors, automation, variable
speed drives and other auxiliary technology can
Whereas large enterprises around the world enable further savings. Larger investments in new
have made significant progress in implementing energy efficiency technology can further bring
operational and technical changes to realise down SME energy demand. Experience with
their energy efficiency potential, in SMEs such energy management systems in large enterprises
potential remains largely untapped. In many SMEs, shows that energy savings of about 30% are
simple operational changes – such as turning off possible within a short time, with additional
equipment and appliances when not needed – annual savings of about 2% to 5% (IEA, 2012). SMEs
and better maintenance and settings can save could achieve similar savings by implementing
about 5 % to 20% of energy demand at little or no energy management systems.
Evidence shows that the potential for energy European Union at more than 25% of consumption
efficiency in SMEs is typically more cost-effective (Thollander and Palm, 2013). SMEs in Spain could
than in other sectors as relatively few of them have save 26% or 307 petajoules (PJ) by implementing
implemented energy efficiency improvements. In efficiency measures. This would equate to an
China, for example, SMEs are on average almost 40% economic saving of over USD 5.9 billion (GasNatural
less energy-efficient than large industrial enterprises Fenosa, 2015).
in their respective industrial sectors. The SME energy
efficiency potential in China has been assessed at In the United Kingdom, it is estimated that potential
25% of SME energy demand (IFC, 2012). energy expenditure savings for SMEs range from
USD 2 billion to USD 4.1 billion. It is estimated
Eurochambres (the Association of European that 40% of these savings are achievable with no
Chambers of Commerce and Industry) estimates capital investments but involve no-cost and low-
that the short-term energy reduction potential cost measures such as eliminating energy waste by
among its 20 million EU members is 10% to 20% turning equipment off when not in use and fixing
(Eurochambres, 2014). Another estimate puts the sources of energy losses such as leaks (DECC, 2014).
energy efficiency potential of industrial SMEs in the
Benefits of improved energy efficiency for SMEs

Cost-effective investments in energy efficiency It can improve competitiveness, product quality,
generate energy savings that have a direct impact materials efficiency, staff commitment and relations
on the profitability of SMEs and provide net positive with the wider community, and can enhance a
earnings in the long run. Energy cost reductions company’s public profile. Studies indicate that the
© OECD/IEA, 2015
can free up resources that can be directed at value of the productivity and operational benefits
more productive activities, such as expansion or derived can be up to 2.5 times the value of the
developing new product lines or services. energy savings (IEA, 2014b).
As well as cost savings, greater energy efficiency Energy efficiency can also help mitigate risks for
offers SMEs a wide range of other benefits (Box 3). SMEs. While risk is inherent in all business functions

and activities, SMEs are more vulnerable than large source. SMEs in many countries also pay more per
companies to changing conditions in credit markets, unit of energy than larger companies and are hence
given their limited financial base. SMEs often face more vulnerable to price increases. Despite a dip in
more severe credit conditions than large enterprises. energy prices across many countries, energy costs
Banks may not be as motivated to engage with are increasingly restricting SME profitability. SMEs
SMEs, as the transaction costs of smaller loans are are also more sensitive to energy supply disruptions
proportionately higher. Many banks are uneasy as they may not have back-up systems or on-site
about the risks involved or fail to see quality generation. Greater energy efficiency can reduce
or resilience in the small business segment. At all these risks and enable access to lower insurance
the same time, most SMEs do not have enough premiums and lower finance rates.
collateral to provide a strong alternative repayment
Box 3 Energy efficiency programmes gas consumption and reduces electricity use
enable benefits beyond energy by more than 25%. The initial investment
savings under UKEEP of USD 1 million also produced
immediate energy savings of USD 1.5 million
The EBRD’s Ukraine Energy Efficiency per year.
Programme (UKEEP) helps SMEs to improve
zz A cucumber and tomato grower invested
energy efficiency by linking local financiers,
USD 1.2 million in new boilers, irrigation
advisors and private companies. The programme
systems and control systems for a large
assists SMEs to overcome information, capacity
greenhouse complex. The monetary savings
and financing barriers to energy efficiency by
alone for gas and electricity amounted to a
combining targeted financing with technical
return on investment of 25% per year (EBRD,
expertise (e.g. energy audit and training) for local
2014d).
financial institutions. Some examples of projects
include: These multiple benefits are substantial, and they
are typical of the rewards reaped from energy
zz A large cheese factory installed nanofiltration
efficiency projects. More information can be
to replace an old vacuum evaporation
found on the website (www.ukeep.org).
system. The new system eliminates natural
© OECD/IEA, 2015

Broader policy objectives for governments
As well as benefiting SMEs themselves, energy opportunities for SMEs themselves as suppliers
efficiency programmes for SMEs can help countries (Table 2).
meet a variety of important policy goals, benefiting
energy systems, economies and the environment. Increased investment by SMEs in energy efficiency
could also boost energy service company (ESCO)
Energy system benefits markets and markets for financial products; nearly
83% of the global energy services industry is
Reducing SME energy demand is cheaper than made up of small or regional players. Growing
investing in new generation and transmission. opportunities exist in the services associated with
Energy efficiency can provide long-term benefits more energy-efficient manufacturing (OECD, 2015).
by lowering base load and peak demand, reducing
the need for additional generation and transmission
assets. Lower energy demand can also help reduce
supply disruptions.
Benefits to the economy

Greater energy efficiency improves the stability
and performance of SMEs, helping to build a
strong and resilient SME segment that can drive
economic growth and development. Energy
efficiency programmes also stimulate the growth
of national and global markets for energy-efficient
goods and services, providing significant business
Table 2 Types of energy-efficient equipment, controls, software and services
Equipment Controls and software Services

Insulation Automated monitoring and Energy auditing
Efficient lighting targeting systems Energy checks (energy walk-
Smart meters and monitoring Boiler controls throughs)
systems Building energy management Energy management
Waste heat recovery systems systems
Energy management system
Efficient windows and glazing Heating, ventilation and air implementation support
conditioning controls
Variable speed drives Energy performance contracting
Energy management software
Efficient office and industrial Process optimisation support
© OECD/IEA, 2015
equipment Lighting and daylight phasing

Energy efficiency consultancy
control and occupancy control
Voltage power optimisation
Process energy management Maintenance for energy
equipment
efficiency
systems
Energy use analytics

Environmental and climate benefits also plays a crucial role in mitigating climate change.
Lowered energy demand can optimise resource
Reducing the environmental impact of SMEs management and alleviate pressure on natural
by achieving and going beyond environmental resources. Reducing energy consumption and
compliance in both manufacturing and services emissions through energy efficiency also plays a
is a key success factor in promoting green growth role in reducing waste and associated pollution (IEA,
– economic growth that is environmentally 2014b).
sustainable (OECD, 2015).
SMEs are important for green growth as drivers
Energy efficiency can also play a major role in of eco-innovation and key players in emerging
reducing local air pollution, particularly outdoor green industries. New and young companies are
concentrations of pollutants such as sulphur dioxide, particularly important for radical green innovations,
particulate matter, unburned hydrocarbons and as they often exploit technological or commercial
nitrogen oxides. In doing so, it can lead to a range opportunities that have been neglected by more
of associated economic, environmental and health established enterprises or even challenge the
benefits (IEA, 2014b). Increasing energy efficiency business models of existing companies.
Benefits for utilities and other stakeholders

By providing information and support on energy SME energy efficiency can open up new
efficiency, industry and business associations opportunities for financial institutions for
can deliver added value to their SME constituents. additional services to existing customers or
Energy utilities and other energy providers create new markets for financial services, such
can use energy efficiency programmes to build as specialised loans or funding mechanisms.
customer relationships, establish value-added Corporations can use energy efficiency
services, address energy supply constraints such programmes to improve relationships, reduce risk
as peak demand, and meet legislative obligations. along their supply chains, reduce costs, and meet
In some countries, energy utilities are tasked with environmental and social commitments. Increased
the development and delivery of energy efficiency work on energy efficiency in SMEs can create new
programmes and have set energy savings targets. markets or expand existing markets for energy-
efficient equipment and service providers.
Barriers to energy efficiency improvement in SMEs

Some persistent barriers are preventing SMEs from A focus on day-to-day cash flow and limitations in
realising their tremendous potential for efficiency accessing capital create challenges in justifying non-
improvements. SMEs are typically more vulnerable core business investments. Small companies are
to market shifts and more reliant on key contracts less likely than larger ones to monitor performance,
and customers than large organisations. The need for example, and tend to have a more informal
to maintain profitability and competitiveness with structure with less rigorously defined roles (EFILWC,
© OECD/IEA, 2015
limited resources can make it more difficult for 2013). It is vital to understand constraints and
SMEs to pay attention to energy efficiency and incentives in different parts of the SME sector rather
other environmental and business improvement than adopt a one-size-fits-all approach.
initiatives.

The most prominent barriers to energy efficiency in to concerns that energy efficiency measures may
SMEs are: disrupt the production process and lead to revenue
losses or affect product quality. Such concerns can
Limited information on energy efficiency act as a strong deterrent. When SMEs do decide
improvement opportunities: SMEs are often to pursue energy efficiency projects, they may
unaware of their options for raising efficiency, and have to rely on external parties for financial and
the costs and benefits of those options. Where technical guidance. Where appropriate skills are not
information may be available, it may not be readily offered in the wider marketplace – by consultants,
accessible, and SME managers may lack the time or equipment suppliers, for example – this barrier is
and motivation to obtain, process and act on it. further reinforced.
A recent survey suggests that 52% of the United
Kingdom’s 2.5 million small businesses have Difficulty accessing the capital to finance
no grasp of how much of their overheads gas, energy efficiency improvements: While
electricity and water account for, while a third of significant energy efficiency potential can be
SME owners are unable to access data showing how realised by measures with little or no cost, SMEs
much energy they use (Utilitywise, 2014). need capital to implement more far-reaching
efficiency improvements. SMEs typically face
Limited in-house skills and expertise to identify higher hurdles to acquiring capital than do large
and implement projects: SMEs typically focus their enterprises. Financiers may point to an SME’s lack
resources on their daily business, leaving little time of collateral and less rigorous record-keeping, and
to develop expertise beyond the essentials, so they may consider smaller enterprises more vulnerable
often bypass profitable efficiency opportunities. The to market changes. The resulting lack of finance
Observatory of European SMEs found that fewer can thwart energy efficiency projects, including
than 30% of SMEs in Europe had implemented any those that offer a strong financial return and a
measures for conserving energy and resources, and range of other business benefits. Banks may also
only 4% had a comprehensive approach to energy lack financial products or capacity to deal with SME
efficiency (European Commission, 2014b). Lack of energy efficiency.
experience with energy efficiency also gives rise
Challenges that programme designers and managers may face

Most energy efficiency policies and programmes grow or shrink, change focus or move operations
have so far targeted large enterprises rather than into new sectors. The number of SMEs per country is
SMEs. One reason for this is that developing and high and they are widely dispersed geographically,
implementing such programmes for SMEs is more so centralised approaches that work for large
difficult. The SME segment is very heterogeneous. organisations may be ineffective.
SMEs vary widely in size and are present in every
business sector.10 Similar-sized companies in the Reaching a greater number of small entities costs
same sector, but in different stages of maturity, can more than targeting fewer large enterprises. Energy
also need different services and different types of savings opportunities are smaller per entity and
distributed more widely, typically leading to higher
© OECD/IEA, 2015
support.
programme administration costs. This makes it
The SME segment is dynamic: new companies are harder for practitioners to argue for programme
established every year, while others close down, funding. Public administrations lack staffing needed
to engage with thousands or even millions of SMEs.
10. A further complication arises in countries where a large share of
SMEs operate in the informal sector.

Ways of improving energy efficiency in SMEs vary Programme designers may find SMEs unreceptive
considerably across sectors so it is difficult to because they lack time and resources, capacity,
provide tailor-made approaches given the very large trust and information. As with large enterprises, the
number of SMEs – and standardised solutions (as lack of standardised methodology to calculate and
used in residential energy efficiency programmes, verify energy savings can create difficulties both
for example) may not work. For financial institutions, in assessing results and in developing financing
the business case for providing a large number of solutions.
small loans may not be evident and the technical
complexity of energy efficiency, particularly in While the costs of energy efficiency programmes
manufacturing businesses, may act as a deterrent. may be higher for SMEs than for large enterprises,
the SME segment typically offers more untapped
energy efficiency potential.
Key elements of an effective programme

There are three main pillars to designing an SME Further measures that can play an important role
programme that overcomes the barriers above: include establishing peer-to-peer learning networks
improving information flow, strengthening capacity that help share information, experiences and
and providing financing. build capacity; promoting energy management
systems that ensure a framework for continuous
zz Information measures that help SMEs to improvements; and implementing equipment
improve energy efficiency include: energy audits, replacement programmes that motivate enterprises
technology demonstration projects, site visits, to invest in efficient technologies.
case studies, “how to” guidance materials, fact
sheets, lists of typical energy efficiency projects,
list of energy-efficient equipment, workshops, Strategies for success
webinars, advice hotlines, energy efficiency
The significant barriers to the adoption of energy
standards for equipment, and clear marking of
efficiency measures in SMEs call for particularly
efficiency levels on equipment.
thoughtful programme design and implementation
zz Capacity building measures that develop (Figure 1). Key success strategies include:
the energy efficiency skills and knowledge of
zz Identify your SME target group. To produce
in-house personnel and external stakeholders
maximum benefit, a programme should consider
include energy audits, training, peer-to-
company size, ownership structure, industry
peer experience sharing, and seminars and
sector, energy intensity, energy supply issues
workshops.
and geographical location.
zz Financing measures that help provide SMEs
zz Identify benefits beyond energy savings.
with access to capital and other financial
Energy efficiency investments are more
resources include providing training and support
compelling for SMEs (and their financiers) when
to help SMEs develop bankable projects, and
they deliver multiple returns, such as enhanced
© OECD/IEA, 2015
training and capacity building for the financial

productivity, product quality and safety.
sector to enable it to develop, provide and
Including productivity outcomes in financial
promote financial products for energy efficiency
cost assessment frameworks can substantially
projects.
reduce the payback period for energy efficiency
investment.

zz Build stakeholder partnerships. The reach zz Take advantage of existing policies and
and effectiveness of an SME programme is programmes. Where a successful SME
greatest when it unites governments, industry programme is already in place, efforts should be
associations, financial institutions, service made to form partnerships and build on existing
and equipment suppliers, and other relevant efforts and resources.
stakeholders.
zz Make it easy for SMEs to access assistance.
zz Combine measures to provide information, SMEs’ limited resources and their focus on
expertise and financing. An integrated day-to-day operations mean that a successful
approach makes programme design and programme must be easy to access.
implementation more efficient and effective.
Figure 1 Strategies for developing energy efficiency programmes for SMEs
1 2
Understand the Focus on multiple

barriers and needs benefits – not just
of your SME energy savings
target group
Accelerating
Make it easy energy Build
6 for SMEs to efficiency in stakeholder 3
access assistance industrial partnerships
SMEs
Leverage existing
policies and Combine
programmes measures
5 4
© OECD/IEA, 2015

The policy pathway to developing and implementing
energy efficiency programmes for SMEs
The pathway to developing and implementing The implementation phase focuses on promoting
energy efficiency programmes for SMEs is presented the programme, motivating stakeholders and
in ten steps, divided into four phases. These steps managing the implementation process.
have proven effective in a variety of programmes
(Table 3). The monitoring phase involves collecting,
reviewing and sharing data so that programme
The planning phase involves tailoring each effectiveness can be assessed on a regular basis
programme to meet the specific needs and and the programme adjusted to ensure maximum
circumstances of sub-section of the SME sector. results.
A successful planning process considers barriers
between SMEs and improved efficiency, and seeks The evaluation phase seeks to determine
benefits from engaging with stakeholders and programme results, impacts and success factors,
coordinating with existing programmes. assess cost-effectiveness and the effectiveness of
instruments used, and will guide future efforts.
Accelerating Energy Efficiency

in Small and Medium-sized
Enterprises
Adapt the programme

and plan next steps
Develop
programme
Evaluate programme rationale
impacts
Consult with
stakeholders
Design the programme
Engage partners and

secure funding, staffing
and other resources
Pilot the
programme
Manage the
© OECD/IEA, 2015
implementation Launch the

process programme

TE

A
LU
PL
A
EV
A

N
PLAN

MO
T
Define the target market
NI
O EN
T
R EM Programme developers can elect to focus on

IMPL
different subsets of SMEs depending on the
objectives of the programme. These subsets can be
1 Develop programme rationale
based on company size, region, business sector or
The programme rationale is a blueprint that guides the supply chain to which they belong. Basic market
further design and implementation, as well as research can help to identify where to focus and the
benefits of targeting that subset, including broader
being a useful tool in communicating the value and
economic and social benefits. Useful data includes:
expected results of the programme. A rationale can
also help raise resources and engage programme zz the number and size of SMEs by type of activity
partners. The programme will be more attractive zz the number and size of SMEs by region
to potential funders, partners and participants
if the rationale describes benefits beyond just zz the contribution of these SMEs to regional and
national economies (e.g. economic growth,
energy savings. To develop a rationale, programme
employment, turnover, export income)
managers need to obtain and analyse information
and consult with stakeholders. zz energy intensity
A rationale should: zz estimated energy savings potentials.
zz identify the problem or issue that will be In terms of area of activity, it is possible to make
addressed a broad division in terms of manufacturing,
agriculture or services or a more specific division,
zz discuss the problem or issue in relation to the for example targeting only SMEs in the hospitality
target subset of SMEs business or in brick manufacturing. Different
stakeholders may tend to naturally select different
zz explain why the programme is needed
groups of SMEs: utilities or energy providers tend
zz propose solutions based on the needs and to focus on SMEs within their customer base, or a
constraints of the target market subset of these, based on enterprise size or sector.
Industry or business associations focus on their
zz give an overview of the programme members. Local governments focus on SMEs in their
region or city, again possibly targeting SMEs within
zz describe the value and benefits of the
a certain sector or of a certain size.
programme
It is easier to tailor to specific needs and capacity
zz explain why the programme will be successful
and to develop standardised methods or tools if the
zz describe how the programme links to other selected target market is more homogenous. An
related initiatives energy efficiency handbook for hotels run by SMEs
© OECD/IEA, 2015
will be more useful than a more generic guide. An

zz outline clear objectives, including desired overview of typical energy efficiency opportunities
changes, target market, how much change is in the brick-manufacturing sector will be more
to be achieved, and the period over which this relevant to SMEs in this sector than case studies
change is to take place. from other manufacturing sectors. Small enterprises

may have less time and resources to engage in
energy efficiency than medium-sized enterprises,
so programmes for them could include additional Box 4 Using assessments to
support mechanisms and more streamlined understand scale and scope
processes.
The US Department of Energy’s Industrial
The diversity of SMEs demands careful consideration Assessment Centres, housed in 24 universities
of factors that may influence their access to and across the United States, assess industrial
interest in efficiency improvements. These include: plant energy efficiency improvements,
zz number of employees waste minimisation, pollution prevention
and productivity improvement. A university-
zz sector based team conducts the initial survey of
the plant, performing a detailed analysis
zz energy intensity of operations and follow-up regarding implementation.
zz proportion of energy costs relative to other SME manufacturers can receive a no-cost
production costs assessment. The programme has been
operating for 35 years and now has a
zz past experience with energy efficiency database of over 16 000 assessments and
over 100 000 recommendations.
zz geographical location
The database can provide insights into
zz energy supply context (e.g. changing cost of energy efficiency potential and benefits
energy, supply disruptions) in many sectors. Each assessment collects
zz ownership structures (e.g. family-owned, private a wide range of data, including an
shareholders, publicly listed) establishment’s physical size, number of
employees, annual sales and production
zz position in the supply chain (e.g. intermediate or hours. The assessments also report on
customer-facing). energy consumption in physical units and
US dollars. For each recommendation,
Identify the target market’s energy use trends detailed information has been compiled,
and energy efficiency barriers including the type of technology addressed
by the recommendation, the rate of
When the target market has been identified, implementation, the cost and potential
data need to be collected that are specific to that savings, and the actual savings made.
market’s energy use patterns and consumption,
such as energy consumption and costs by SMEs Source: http://energy.gov/eere/amo/industrial-assessment-
centers-iacs.
overall, and by sector; potential energy efficiency
improvements by sector; and estimated energy
cost savings.
Data sources are rarely complete. The planning It is essential to assess the particular barriers facing
© OECD/IEA, 2015
process may highlight the need for improved data each target market, taking into consideration
on energy use among SMEs. Pilot audits can help factors such as company size, type of activity
address data gaps and stakeholder consultations (manufacturing, services or agriculture), sector,
can provide estimates to use as a basis for further energy intensity, energy supply issues and
calculations. ownership structures. Identifying specific challenges

will help to frame the rationale for the programme zz Which geographical areas and sectors do other
and will help to develop targeted and effective programmes serve?
approaches (Box 4).
zz What approaches do they use?
Taking advantage of existing policies and zz What support do they provide?

programmes
zz What are the energy efficiency outcomes?
Programme designers need to gather information
on existing policies and programmes and analyse zz Do all sectors and geographical regions have
them for opportunities to cross-promote and co- access to these interventions?
operate, as well as redundant goals or conflicting zz Which design and implementation features have
goals. Relevant policies and programmes could proven effective or ineffective among these
include other energy efficiency programmes programmes?
targeting businesses, energy efficiency policies and
programmes targeting commercial or industrial Answering the questions above may reveal whether
buildings, environmental reporting requirements, high-level policy issues are preventing SMEs from
policies or programmes aimed at reducing adopting energy efficiency projects. If such barriers
greenhouse gases, equipment replacement exist, then programmes can aim to work with and
programmes, tax rebates for investments in provide advice to relevant governments or agencies
energy-efficient technologies, standards and on how to reduce constraints presented by legal
labelling programmes for commercial and industrial and regulatory environments.
equipment, green credit lines, revolving funds
for energy efficiency, and grants for SME business Existing programmes that promote SME
development and innovation (Box 5). competitiveness or innovation should be examined
to assess whether or not they are exploiting
In some countries, several energy efficiency opportunities to improve energy efficiency. There
programmes targeting SMEs operate could be opportunities to add an energy efficiency
simultaneously. Ensuring co‑ordination and the component that could deliver a broader package
exchange of information and experiences can of benefits to the target market. If an existing
save resources, help optimise processes, maximise programme aims at businesses of all sizes, it is
impacts and avoid confusion for the SME sector. worth investigating whether SMEs are aware of the
programme and are participating. Use of existing
Past energy efficiency programmes can give grants, financing or market-based mechanisms
valuable insights and help identify success factors or could strengthen the impact of planned programme
pitfalls to be avoided. and establishing links with these could save
Consider the following questions: resources.
zz What government policies and programmes Building on the networks of existing programmes
target or could be relevant for energy efficiency or developing joint initiatives could also be a way
in SMEs? to save resources. Reviewing existing and past
programmes can help to identify gaps and niches as
© OECD/IEA, 2015
zz To what extent are SMEs accessing these well as successful aspects that can be replicated.
programmes?
zz What unique contribution can a new programme

make?

Box 5 Surveying existing policies and agencies are currently engaged with those
programmes in India industries. This survey work guided the Indian
government’s selection of industrial SME sectors
Plotting the location of target industries, and the and geographical areas for future energy
reach of existing energy efficiency programmes, efficiency interventions. It has also been useful
can reveal where the greatest potential lies. In in discussions with other agencies seeking to
India, international donors and national, regional maximise their interventions. The research was
and local governments have launched a variety conducted for the World Bank by a team at the
of interventions to improve the energy efficiency Institute for Industrial Productivity in India with
of SMEs. This table illustrates the clustering of the support of Winrock International.
energy-intensive industries, and notes which
Region Type of cluster Legend
Andhra Auto component NSIC, SIDO, SBI Uptech, UNIDO
Assam Food processing AP Govt/UNIDO, SIDBI, NSIC, NABARD
Rice mill SBI Uptech, SIDO, UNIDO, BEE

Bihar
Oil mill BEE, SIDBI
Goa Brass SIDO, NABARD, SBI Uptech,
NSIC/BEE/Gujarat Govt/UNIDO
Gujarat
Steel utensils SIDO, SIDBI
Haryana Steel re-rolling Gujarat Govt
Himachal Foundry BEE, SIDO/SBI Uptech, WB-GEF,
NSIC, AP Govt/UNIDO, SIDBI
Jharkhand Forging WB-GEF
Karnataka Rubber SIDO/UNIDO
Kerala Coir SBI/UNIDO/BEE
Glass and ceramics NABARD, SIDO, NSIC/ BEE,

Madhya Gujarat Govt/UNIDO
Maharashtra Engineering DST/UNIDO, NSIC, Gujarat Govt, WB-GEF
Odisha Pharma and chemicals BEE, NSIC, WB-GEF, SIDO

Leather UNIDO, NABARD
Punjab
Textile Textiles Committee, Gujarat Govt,
Rajasthan BEE, UNIDO, SIDBI, SIDO
Tea BEE
Tamil Nadu
Paper BEE
Uttar Pradesh Brick BEE
© OECD/IEA, 2015
Dairy BEE
Uttarakhand
Machine tools BEE
West Bengal Limekiln BEE, WB-GEF
Source: Institute for Industrial Productivity in India (2014).

The initial mapping process should be
supplemented during the implementation phase
as part of ongoing monitoring, as new policies and Box 6 Engaging with stakeholders
programmes may be launched during the course
of programme implementation. These changes
Cost-effective consultation
may provide new opportunities for synergies and
process in Mongolia
partnerships, or they may create additional barriers
Consulting with stakeholders does not
or complexities that need to be addressed.
necessarily require huge effort and
2 Consult with stakeholders resources. For example, the Mongolian
Ministry of Energy, supported by German
As well as consulting with SMEs themselves and aid agency GIZ, avoided the difficulties
their energy providers, programme designers that travel posed both for themselves and
should consult with stakeholders such as business targeted stakeholders by using a telephone
survey to solicit input from SMEs. A high
associations, corporations, energy service
response rate was ensured by collaborating
companies, finance institutions, and suppliers of with electric utilities, taking advantage
energy-efficient technology and equipment. A of their existing relationships with SMEs.
systematic approach to identifying stakeholders Utilities promoted the survey and joined
is essential to establish a broad base of support forces with local universities to conduct
and obtain information about SME needs and telephone interviews (Crittenden, 2013;
Ernedal and Gombosuren, 2011).
constraints. Once all of the key stakeholders have
been identified, programme designers should
consider the best way of soliciting their input: 3 Design the programme
meetings, surveys, workshops or focus groups.
The success of an energy efficiency programme relies
Initial consultations might range widely to identify:
on selecting and deploying the right components
zz challenges and barriers to help SMEs overcome barriers to efficiency.
Successful programmes typically deliver three kinds
zz programme components most likely to be
of components:
effective
zz Information components introduce SMEs to
zz examples of successful energy efficiency practice
available technologies, and the costs and benefits
in SMEs, and the reasons for success
associated with their implementation.
zz opportunities for stakeholders to co-operate
zz Expertise-building components are necessary
zz existing resources that could be leveraged. because SMEs may lack internal expertise to
identify, select, and implement energy efficiency
While surveys are efficient, the interactive nature of projects. These skills must be taught or provided
focus groups and workshops can produce valuable by external parties, such as consultants,
insights. By sharing their perspectives, SMEs and equipment providers and financial institutions).
© OECD/IEA, 2015
other stakeholders may identify barriers and design

solutions (Box 6). Stakeholders should be consulted zz Financing components improve SMEs’ access
regularly as part of the implementation and to the capital required to purchase more energy-
monitoring process. efficient equipment or to implement energy
efficiency projects.

As a minimum, a programme should aim to provide engaged, more detailed and technical information
information and build expertise. Access to financing may be needed for other staff. Information that is of
should be included if that is a significant barrier value includes:
for the target group. Alternatively, one or all of the
components may be added to an existing policy or zz How much energy the SME is using, preferably
programme. in disaggregated form (how much for different
processes or how much for heating and lighting,
for example).
Information components
zz How much the SME is paying for energy.
Many SMEs do not have a clear idea of how much
energy they use, which processes are energy zz What are the energy efficiency opportunities
intensive and which equipment uses a lot of energy. (based on an audit or at least on sectoral best
SMEs often lack time to research energy efficiency practices).
opportunities and may lack the expertise to assess
which information is useable or reliable. Available zz How much could the SME save (based on an audit
efficiency information – for example information or on benchmarks), preferably presented in terms
targeted at large companies – may not be adapted of how much money it is losing on a monthly/
to the needs of SMEs. annual basis for unnecessary energy use.
Information for SMEs should be targeted at the right zz What other benefits energy efficiency measures
person (Box 7). SME owners or general managers could deliver. Information on the strategic and
make decisions about what to do and what to invest operational benefits, in particular, can motivate
in; if the owner or general manager is not on board, further investigation.
the company will not be receptive to any further zz How the SME compares with other SMEs in the
information. After the owner or manager has been same sector.
© OECD/IEA, 2015

Box 7 Effective targeting Another option for tailoring information is to
and tailoring target industrial clusters. In India, many SME
operations have emerged in natural clusters,
Delivering tailored energy efficiency information based around local resources. A cluster
to the SME sector, which is composed of a large may be defined as a local agglomeration of
number of small heterogeneous units with enterprises producing and selling related or
differing needs and abilities, can be a daunting complementary products and services. There
task. However, there are ways to effectively tailor are about 350 such clusters in India. The size in
information to groups of companies. terms of the number of units and the quantity
of output of these clusters vary significantly.
For several of its programmes, the United Within each cluster, however, there is a high
Nations Industrial Development Organization degree of similarity across units in the level of
(UNIDO) has developed a package of standard technology being employed, operating practices
tools with options that can be added depending and even trade practices. This homogeneity
on the programme’s geographical scope, cultural creates opportunities to develop standardised
and economic background, sector, purpose and approaches to stimulating energy efficiency;
aim. UNIDO’s Resource Efficiency and Cleaner improvements demonstrated in one unit
Production programme, for example, has several can be easily replicated in other units and
standard modules that can be combined for mainstreamed within the cluster.
each project depending on the needs. This
allows UNIDO to customise the project while Sources: www.unido.org/cp.html; www.clusterobservatory.in.
ensuring the quality of each intervention by
using well established and proven tools, as well
as maintaining consistency.
After SMEs are informed about the strategic and These should be as relevant as possible to the
operational benefits of energy efficiency, they then circumstances of the SME target group in order to
require more detailed information about the costs demonstrate to SME managers that the investment
and benefits of potential projects in their own of their time and effort is worthwhile. Given SMEs’
facilities. Accessible handbooks and checklists can time constraints, it may be better to offer shorter,
provide information such as guidance on how to more factual information rather than theoretical
develop project specifications and how to decide texts, and oral information rather than manuals.
between competing solutions (Table 4). Shorter meetings might get a better attendance
than long workshops. SMEs’ schedules should
When developing an information component, it also be considered. Information campaigns for
is important to determine not only what kind of agricultural SMEs during harvesting season, for
© OECD/IEA, 2015
information but also how it should be delivered; example, may not draw much notice.
possibilities include programme websites,
promotional material, and public events and It is vital that information be delivered by trusted
presentations. Case studies, showing how other sources, as lack of trust prevents the uptake
companies exploited the benefits of energy of advice on energy efficiency (Never, 2015).
efficiency, are an effective form of information. Information from industry associations, for example,

has a bigger impact than information from (Never, 2015). People tend to respond best when
consultants. Trust in products or vendors can be approached by a peer whom they can trust and
decisive to the uptake of new goods and services comprehend (Fuller et al., 2010).
Table 3 Tailoring information to SME needs
The question: The information to deliver:

Why should an SME participate in an The strategic and operational business benefits of energy
energy efficiency programme? efficiency can be conveyed through case studies and relevant
industry data
Where does an individual SME consume A quick survey or checklist can outline the amount and
energy, and how much does that energy location of energy consumption costs in a facility
cost?
How can an SME determine which energy An energy audit can provide an estimate of the potential
efficiency projects would deliver the savings and prioritise the projects that are likely to deliver
biggest benefit for the smallest cost? the most benefit
How can an SME determine the costs, Specialist investigations can reveal the options available, and
benefits and risks associated with a the costs, benefits and risks associated with each
specific efficiency project?
How can an SME pay for an efficiency SMEs often need an introduction to the innovative financing
improvement project? options that may be available to them
How can an SME tell if the project is Once implemented, a project should be monitored to
successful? document the benefits, and to fine-tune for maximum
benefits
One of the most common types of detailed zz whether or not accredited energy auditors
information offered by efficiency programmes is should be used.
a formal energy audit. Typically conducted by a
consultant, the audit produces a detailed picture Capacity building measures
of one facility’s potential for energy savings. It may
also estimate the costs and benefits of specific
Internal capacity building
interventions. In an energy audit component, it is
important to consider: SMEs often have limited internal expertise on
© OECD/IEA, 2015
energy efficiency and limited staff resources, so

zz the extent to which the energy audit cost will be it is essential to help them build expertise – and
subsidised for SMEs to help external advisors acquire and supply
expertise. The skills needed to launch an energy
zz the depth of investigation to be provided
efficiency project are extensive. Each phase requires
through an energy audit
distinct skills: conceiving and identifying a project;

selecting and designing a solution; and installation Specific skills-building components of an energy
and monitoring. And all phases require active efficiency programme will vary according to
management: project planning and management; stakeholders’ needs. For example, SMEs are
communication planning and implementation; unlikely to be able to justify attending at a lengthy
understanding energy use across a facility; training course. Short, focused training sessions
identifying potential opportunities; establishing are more likely to be effective. Nevertheless, a
costs, benefits and risks for specific projects; training course where managers meet to share
assessing business case proposals; identifying and experiences and learn from each another is valuable.
obtaining finance; and monitoring and verifying Similarly, components that cross-train participants in
project outcomes (Lund et al., 2010). other areas of business, such as financial literacy or
improved operational understanding, deliver extra
Measures that can be used to build internal value to SMEs.
expertise include written materials, workshops,
education courses and training, on-site training,
online training, and capacity building by doing, such
as participation in energy audits (Box 8).
Box 8 Building a network of support SME network in Sweden

Established in 2009, ENIG is a Swedish energy
efficiency network targeting SMEs in the
Networks in Switzerland and Germany manufacturing sector. ENIG is run by the Swedish
Research Institute for Industrial Renewal and
In 1987 Switzerland founded an Energy
Sustainable Growth (Swerea); the Swedish
Efficiency Network (EEN), which enables 10-15
Energy Agency is a partner and funder. ENIG
regionally based large companies and SMEs from
creates, collects and disseminates information
different sectors to share their experiences in
on energy efficiency technologies, practices and
moderated meetings. After a company survey,
methods. The network enables cross-industry
participants decided on a joint energy efficiency
collaboration in areas of common interest, such
and CO2 reduction target over three to four
as ventilation, compressed air and lighting.
years. There are currently 70 energy efficiency
The objective of the network is to save 30% of
networks involving 2 000 companies. In 2002,
energy consumption in participating companies
the concept was exported to Germany. After a
by 2015. The evaluation of the initial stage
pilot phase in one region, a programme to set
(2009-12) indicates energy savings of 23 600
up 30 networks was established, funded by the
megawatt hours (MWh) in 93 of the participating
German Federal Foundation, two federal states
companies, which had an initial consumption of
and three private companies. Participating
341 000 MWh, corresponding to a 7% reduction.
companies reduced their energy demand by
The programme has been continued for a
twice the national average rate. There are plans
© OECD/IEA, 2015
second stage (IVL, 2012).

to expand the number of networks to 600-700
by 2020 (Koewener et al., 2014).

Networks in Japan volunteers from different companies. In nine
years, more than 200 audits were carried out.
In Japan, the Hokkaido and Kanto Bureaus of
The concept has been exported to Taiwan,
Economy, Trade and Industry have developed an
where the first energy saving patrol team was set
energy conservation neighbourhood association
up in 2010 (Noda, 2013).
model. Energy efficiency is promoted via the
establishment of industry groups within the
same sector or within the same geographical Energy Manager Network in Europe
location to share information and experiences. The European Energy Manager Network
Meanwhile, in the Suwa region, a private sector consists of alumni of a training programme. The
initiative was started by Epson in 2000 as part programme is offered in 30 countries and there
of its corporate social responsibility efforts. are currently 4 000 energy managers in the
Epson established an Energy Saving Patrol network. Trainers deliver standardised energy
Team to provide free advice to help other manager training to technical experts, company
companies in the area improve energy efficiency. managers and energy service providers.
In 2005, the company launched the Shinshu Trainees then receive access to an Internet
Energy Conservation Patrol Teams, which in platform that acts as a social community. Events
co-operation with environmental protection and awards for energy management excellence
associations, business associations and Nagano help build momentum.
Prefecture, promote audits in companies in
Nagano. Patrol teams generally consist of 25 Source: http://eurem.net.
External capacity building The quality of audits or other types of energy

services is an important success factor. Poorly
Few SMEs can muster from within their own
performed audits can damage the reputation of
walls all the expertise they require for increasing
a programme and discourage enterprises from
energy efficiency. Similarly, few SMEs can
engaging in energy efficiency. If there is a lack
support a dedicated manager or department to
of auditors or auditors require further training,
oversee energy-related initiatives; they typically
programmes could include capacity building for
rely on outside stakeholders, such as specialist
auditors or consultants.
consultants, equipment providers and financial
institutions. So energy efficiency programmes Financial stakeholders may require new expertise
need to ensure that these external stakeholders for dealing with SME energy efficiency (Box 9).
have the necessary expertise. Energy efficiency projects differ from mainstream
investment projects in that they are cost savings
Equipment and service providers, for example, may
projects not revenue generating projects. Banks
have insufficient knowledge of energy efficiency
are still relatively unfamiliar with cost savings
issues, so the design of a training component
© OECD/IEA, 2015
projects. Energy efficiency projects also often

should address both SMEs and their providers. The
consist of a range of smaller investments rather
quality of an equipment installation can significantly
than a big investment in one piece of machinery. It
affect energy savings, so it makes sense to train
can be difficult to find collateral for loans for energy
equipment providers and installers to optimise
efficiency projects and to calculate and verify
energy efficiency.
energy savings. Financial institutions often perceive

SMEs as less transparent and more likely to default
than larger companies. SMEs are typically too small
to absorb the fixed costs associated with debt Box 9 Building finance sector
issuance in the financial market. skills in China
For all these reasons, capacity building for local Building on a programme focusing on
financial institutions is increasingly seen as a pre- providing finance to large companies in
requisite to ensure the availability of appropriate China, the International Finance Corporation
financial products for SME energy efficiency (IFC) established the China Utility-based
projects. For example, the EBRD Sustainable Energy Energy Efficiency Finance Program for Small
Financing Facility (SEFF) provides dedicated training and Medium Enterprises (CHUEE SME) in
and capacity building for staff in local financial 2013. It is a risk-sharing facility and advisory
institutions (EBRD, 2014a). This includes: service that supports energy efficiency and
renewable energy projects undertaken
zz how to promote new sustainable energy
by SMEs. The programme helps financial
products
institutions to better understand these
zz how to recognise eligible projects sectors and provides not only financial
support but also technical assistance.
zz marketing the benefits of the finance
Banks therefore become familiar with new
programme
technologies and related risks, and can build
zz creating standards for environmental and social in-house expertise to take the next steps of
due diligence independent lending offers.
zz encouraging clients to originate investment The CHUEE SME advisory services

opportunities. programme is expected to promote loans
worth USD 558 million for at least 175
Programmes can facilitate access to external
sustainable energy projects, helping to
expertise by providing grants or partial cost-
reduce GHG emissions by 3.75 million tonnes
coverage to engage experts to help develop energy
annually. In the first year of operation, the
efficiency projects and applications for financing.
programme exceeded its objectives: four
CHUEE partner banks received in-depth
advisory services and disbursed loans
valued at USD 72.4 million. Furthermore,
partner financing institutions built green
finance portfolios of USD 1.9 billion. Four
new financial products were designed
and launched, and 350 finance sector
professionals were trained in sustainable
energy financing.
Source: IFC (2014).

© OECD/IEA, 2015

Financing components From the perspective of financial institutions,
energy efficiency investments typically do not
Unless SMEs have access to the financial resources generate additional revenue for the SME applicant.
they need to purchase, install and operate new Although they do yield operational savings,
equipment, effective and profitable efficiency financiers may struggle to demonstrate how
opportunities will go unexploited. The finance future savings can justify a loan. This can lead to
landscape is complex and diverse (IEA, 2014a), and a a higher interest rate or outright rejection of a
number of interrelated barriers confront SMEs. loan application. These challenges have led both
governments and financial institutions to develop
Within the walls of SMEs themselves, working
a spectrum of alternative financing options (see
capital is dedicated to daily administration and
Figure 2, Table 5 and Box 10).
production costs such as payroll, rent, water and
energy. With many short-term needs, SMEs are In some cases, it can make sense to combine
less likely to invest in projects with a medium-term different financial instruments or to use different
return (more than two years). What is more, they instruments for different sub-segments, for
may view the added expense of a loan repayment example, grants for small enterprises and
with caution. And the debt an SME incurs for energy preferential loans for medium-sized enterprises.
efficiency may reduce its ability to acquire future
loans that it might need to support its core business.
Figure 2 The spectrum of financing solutions for SMEs
For example:
For example: Private equity
Commercial loans Venture capital
Concessional loans Mezzanine capital
Micro-credits
Debt Equity
financing financing
For example:
For example: Receivables management to improve short-term cash flows of SMEs
Public grants Institutional Financing Leasing, Contracts between two parties where the lessor provides
Tax incentives funding solutions factoring an asset for usage to another party for a period of time,
Loan guarantees in return for specified payments
Supporting non- Tailored financial

financial services instruments
For example:
Capacity building For example:
on financial literacy Arrangement with energy and service companies (ESCOs)
(from its internal funds or by the customer, or by a third party funding)
Carbon finance (CDM)
© OECD/IEA, 2015
Source: Mueller and Tuncer (2013).

Table 4 Financing options for SME energy efficiency
Preferential SMEs may lack the assets (collateral) necessary to secure a traditional commercial
loans loan. And financiers may lack the familiarity and confidence with the small projects
they are asked to underwrite. To address this, governments and stakeholders such as
development banks can extend special credit lines to local financial institutions, which
on-lend the funds to their clients.
Energy SMEs and local banks often lack both the technical capacity to assess the potential of
savings more capital-intensive energy efficiency investments and the confidence that they will
insurance pay back. Solutions to address these barriers are under way. One promising approach is
energy savings insurance, which pays out if the projected value of energy savings is not
met. Analysis shows that the instrument can absorb up to 80% of this underperformance
risk (Global Innovation Lab for Climate Finance, 2015).
Grants Grants may offer capital for projects that SMEs could not otherwise finance. However,
SMEs may be deterred by the administrative costs of applying for a grant or if the chance
of winning a grant is low. Streamlining application processes or providing additional
information and guidance can help address this.
Equipment In leasing arrangements, the financier owns the energy efficiency equipment and the
leasing customer obtains the right to use it. The SME needs no capital to participate, and may
gain an immediate reward from reduced energy costs.
ESCO funding An energy services company (ESCO) designs, constructs, operates and finances energy
model with efficiency equipment. The customer pays for energy savings through an agreed rate
shared ($ per avoided unit of energy), or pays a fee for a guaranteed level of service. However,
savings ESCOs function best with large projects; and they typically prefer larger companies that
are less likely to fail during the funding period (Akman et al., 2013).
Utility on-bill An energy retailer or third-party financier provides initial capital for energy efficiency
financing projects. This is repaid through a debt repayment charge on energy bills. This can provide
an efficient mechanism for SMEs to obtain energy efficiency funding.
White Like emissions trading systems, these are market-based systems wherein energy utilities
certificate earn certificates for their efficiency improvement. The advantage to SMEs is that they
schemes may acquire such certificates by implementing an energy efficiency project, which in turn
reduces the cost of the project. Administration costs can be reduced when equipment or
service providers manage the administration of certificates.
Tax incentives These provide a financial incentive to undertake an energy efficiency project. In South
Africa, for example, the Energy Efficiency Tax Incentive provides registered companies
with a USD 0.45 tax reduction for each kilowatt hour (kWh) of energy saved. Projects must
establish a 12-month energy usage baseline before claiming the incentive (SANEDI, 2015).
© OECD/IEA, 2015

Box 10 Examples of financing solutions assistance and incentive grants to SMEs as well as
for promoting energy efficiency larger corporates that also involve SMEs as part of
in SMEs the value chain. This support comes a complement
to EBRD financing for eligible energy efficiency
The Energy Saving Trust SME Business technologies that have low market penetration.
Advice and Loans Scheme The grants provided by the Global Environment
Facility (GEF) and EBRD help to demonstrate
The Energy Saving Trust (EST) Business Advice the market potential of these technologies in
programme in Scotland is funded by the Scottish order to support wider adoption by businesses.
government. It provides tailored advice on FINTECC also includes funded technical assistance
reducing energy use to businesses with annual activities designed to increase awareness, address
energy bills of less than USD 55 000. The Energy information gaps in the market and stimulate
Saving Trust also manages a 0% fixed rate small technology transfer. In addition, policy support
business loan of USD 1 100 to USD 110 000 to is provided to governments to create regulatory
help businesses install measures that reduce environments that help SMEs deploy energy-
energy consumption. Thousands of businesses efficient technologies (EBRD, 2014b).
have benefited from the programme. The latest
evaluation (2010-11) found that the programme Energy efficiency solutions for SMEs
had delivered lifetime benefits to customers of in Kyrgyzstan
over 40 000 tonnes of carbon dioxide (tCO2) in GHG
The SME sector in Kyrgyzstan employs more than
reductions and USD 10.5 million in cost savings.
60% of the population and has vast potential
Source: www.energysavingtrust.org.uk/. for energy efficiency improvements. The EBRD
has established the Kyrgyz Sustainable Energy
Preferential loans in Korea
Financing Facility (KyrSEFF) to provide dedicated
The government of the Republic of Korea provides loans for energy efficiency to local companies
preferential long-term and low-interest rate loans through local financial partners. Successful
to encourage the installation of energy-efficient investments are supported by the European Union
equipment in industry. through grants.
Thailand supports leasing In addition to financing, the EBRD helps small

businesses access expert advice. The Bank’s Small
The government of Thailand supports leasing Business Support teams up with local consultants
through the Energy Conservation Fund. Energy and international advisors to help SMEs transform
service companies can acquire loans for their businesses. Experts help companies to
equipment, which they then lease to SMEs. As a identify potential energy-saving measures, clarify
result of reduced energy costs, the SMEs have the which technologies and approaches would be
funds to meet their lease payments back to the most appropriate and make recommendations on
service companies (Jue et al., 2012). how best to implement them. Each project is tailor-
made to the needs of the client and projects are
© OECD/IEA, 2015
Grants and technical support for energy

undertaken on a cost-sharing basis.
efficiency technology transfer
Source: EBRD (2014e).
The EBRD’s Finance and Technology Transfer Centre
for Climate Change (FINTECC) provides technical

4 Engage partners and source funding,
staffing and other resources
Building effective partnerships
Given the large number and diversity of SMEs,

successful energy efficiency programmes typically
feature several organisations working together
throughout the process from programme design
through implementation. For example, industry
associations can use their existing relationships
and activities with SMEs to deliver information and
skills. Governments can bring stakeholders together
and manage programme development. Other ties to SMEs than central governments and can be
stakeholders, such as financial institutions, can better placed to engage SMEs or other stakeholders
provide expert perspectives and develop strategies in their regions.
to overcome specific barriers that may limit SME
participation in energy efficiency opportunities. Industry and business associations include
sectoral organisations – for example, associations of
Potential programme partners tourism companies – and general associations, such
as chambers of commerce and SME associations.
Government ministries, departments or They have an interest in supporting their members
agencies tasked with energy efficiency are key and offer valuable networks and knowledge of SME
stakeholders. They have expertise in the area of needs. They are typically considered a source of
energy efficiency and typically play a key role in trusted information.
engaging other stakeholders and initiating and
administrating programmes. Energy utilities and other energy providers
may use efficiency programmes to build customer
Other government entities or agencies with relationships, establish value-added services,
interests in an energy efficiency programme vary address energy supply constraints such as peak
based on their policy objectives. For example, demand, or meet legislative obligations. In some
an environment department may focus on countries, energy utilities are tasked with the
environmental outcomes, while an industry development and delivery of energy efficiency
department may prioritise industrial growth. programmes and have set energy savings targets.
Government entities tasked with SME growth
and development may have a better insight into Financial institutions may wish to offer additional
SME needs and better contact networks and services to existing customers or create new
communication channels. A clear case for how markets for financial services, such as specialised
energy efficiency can help support business sector loans. Financial institutions can be instrumental in
development or economic growth may be needed developing and delivering a programme’s financing
to effectively engage them in energy efficiency components.
© OECD/IEA, 2015
programmes.
Corporations can use energy efficiency
Local governments are interested in stimulating programmes to improve relationships, reduce risk
business development in their regions or cities, along their supply chains, reduce costs and meet
reducing environmental impacts and reaching environmental commitments. They have existing
energy savings targets. They often have closer relationships and contact channels with the SMEs

in their supply chains. As large organisations are 1. Institutional resources
increasingly engaging in energy efficiency, they can
These are the resources required to administer and
also provide expertise and valuable experience.
promote the programme, including liaison between
International initiatives, such as the Global the stakeholders and regular reporting on progress
Superior Energy Performance Partnership (GSEP) to the funding bodies. A clear governance model
and the Energy Management Action Network will ensure that institutional resources are used
(EMAK), can leverage international networks of efficiently. It is important to consider:
experts to enhance the design and implementation
zz who will make final decisions
of SME energy efficiency programmes.
zz how key programme stakeholders will contribute
Development organisations and development
to the programme design
banks can use their existing networks and expertise
to promote energy efficiency programmes that zz what processes will ensure that effective
ultimately help to advance other economic, social decisions are made.
and environmental goals.
A programme framework can be a useful tool in
Equipment and service providers are motivated assessing the need for institutional resources and
to promote and participate in SME programmes managing them throughout the duration of the
when they see the potential for increased sales of programme. The framework establishes governance
equipment or other benefits for their own business and decision-making processes. This is particularly
objectives. When these providers are themselves important when a number of stakeholders are
SMEs, their involvement can further stimulate SME involved. Therefore the framework should outline:
segment growth and development.
zz roles and responsibilities of each partner
Education and research institutions can make organisation and its staff
skilled professionals available to SMEs, which may
lack the skills and knowledge required to improve zz the process by which decisions will be made
energy efficiency.
zz who will participate in those decisions
Obtaining the necessary funding, staffing and zz communication protocols through which
other resources partners will be informed of issues and
developments.
Launching and implementing an energy efficiency
programme can require significant time, funds and The framework should also include an action plan
expertise. Even after implementation, a programme detailing:
demands regular review and reporting to monitor
zz time-frames for the delivery of each programme
progress and guide future work. The process of
component
estimating programme costs will often lead to
adjustments in the programme components as zz accountability for the delivery of each
the cost of subsidies and other supports becomes component
clear; these adjustments to balance a programme’s
© OECD/IEA, 2015
mission and its fiscal prudence can be challenging. zz the timing and method of monitoring and
evaluation.
There are three broad types of resources to
consider: institutional, financial and technical. 2. Financial resources
Several costs need to be considered when

developing a programme. As well as subsidies or Because SME energy efficiency programmes deliver
grants the programme might provide to SMEs, results over the medium-term, it is ideal to secure
these costs typically include costs for staff, external funding for a number of years. A well-developed
experts, information and training materials, programme rationale can help source funding and
workshops and information dissemination. engage partners.
In terms of the larger cost item – subsidies or grants

3. Technical resources
– options include:
Technical resources encompass technical experts –
zz partial subsidisation of an SME’s cost energy efficiency consultants, auditors, educators
and trainers – as well as equipment and technology.
zz full subsidisation from a single organisation such
From a programme perspective, it is important
as a government department
to make sure that sufficient technical experts are
zz shared support from a range of stakeholders available and can deliver services of high quality,
with an interest in programme outcomes. and to consider how technical experts will be
selected. Technical experts may need additional
User-based charging, where SMEs pay a training.
participation fee, is are an interesting option. Such
charges can be a barrier to SME participation, but While it is not possible to assess the availability
if the fees are reasonable and are considered good of all types of technologies and equipment that
value, they can create buy-in from the SMEs and might be needed, programme designers should
inspire completion of a project. check whether there are any barriers to accessing
necessary technologies. In some cases, programmes
are linked to technology transfer projects.
© OECD/IEA, 2015

TE

A
LU
PL
A
EV
A

N
IMPLEMENT

MO
T
and approaches that can be used in subsequent
NI
O EN implementation (Box 11). Case studies and

T
R EM
IMPL
testimonials from pilot participants can also help
attract new participants and partners.
5 Pilot the programme If the resources and timeframe do not allow
Implementing a small-scale version before the for a piloting phase, stakeholder consultation
rollout of a full programme is a key step. Whether can be used to get insights on how to combine
this involves a subset of the target SMEs, or programme components and help identify
a subset of programme components, it will tools and mechanisms that would contribute to
highlight shortcomings and allow for adjustments. programme success.
Piloting also enables the development of tools
Box 11 Piloting in the chemicals industry National test phase and rollout: The draft tools
were tested with two chemical SMEs in each
partner country. The field test enabled further
The CARE+ pilot, co-funded by the European
improvements to match companies’ needs and
Commission, was set up by the European
expectations. The finalised tools were then
Chemical Industry Council (Cefic) to help SMEs
promoted through a rollout campaign in the
that lack experience with energy audits to identify
partner countries.
energy-saving opportunities. One of the main
objectives was to develop and test tools to help In 2013 Cefic continued its energy efficiency
SMEs to help themselves to improve their energy work by launching the Sectoral Platform in
efficiency. The programme started in 2008 and Chemicals for Energy Efficiency Excellence
ended in 2011. The CARE+ pilot project built on (SPICE3), co-funded by the European
experiences of voluntary agreements between Commission, which aims to boost energy
the chemicals industry and local authorities in the efficiency across the European chemicals
Netherlands and the United Kingdom. industry, particularly in SMEs. The consortium
brings together 14 partners from 11 countries.
Activities included:
The project uses a multi-lingual online platform,
Gap analysis: The partner countries (Bulgaria, industry workshops and tailored training to
Italy and Poland) conducted surveys on energy provide companies with guidance, tools and
management performance and provided a promote the exchange of best practices.
gap analysis to help to determine the current
The chemicals sector’s strong commitment to
situation and needs in chemical SMEs.
the project has prompted SPICE3 to establish an
Tools development: Based on the survey results ambitious set of goals after just two years:
and existing expertise, the project evaluated best zz USD 11 million in cumulative investment by
© OECD/IEA, 2015
practices and appropriate delivery mechanisms European stakeholders in sustainable energy

for improving energy efficiency. The results served zz 250 kilotonnes of oil equivalent (ktoe) per
to draft the Self Audit Guide and the Best Practice year in primary energy savings
Manual. These can be adapted to individual
zz 100 ktCO2/year reduction in GHG emissions.
company needs and combined with existing
measures, such as national funding schemes. Sources: www.cefic.org, www.spice3.eu

6 Launch the programme Ensure that SMEs can easily access the programme
and quickly reap benefits. SMEs and other
SMEs’ diversity and geographic dispersion can make stakeholders need easy access to information about
it difficult first to identify all of the candidates for a a programme, including:
programme, and then to maintain communication
with them. Therefore, it is vital to communicate with zz why the programme has been initiated and its
SMEs and other stakeholders in a systematic way. objectives
Start by learning how the target group currently zz what it offers SMEs
receives information:
zz SME eligibility criteria
zz Where do they access information?
zz how SMEs and other stakeholders can
zz Whom do they trust in relation to technical and participate.
business issues?
Linking energy efficiency to concrete business
zz Which communication channels are likely to be benefits, such as improved product quality
the most effective? or productivity, will attract more interest and
participation, both from SMEs and from their
Consider the timing of communication. Industries financiers. This approach is particularly effective
with a seasonal rhythm can devote more time to when the activities also deliver core business
communication that arrives during a quiet period. improvements.
Consider language barriers as well, which may occur
in a small organisation. For example, when the Benefits might include: lower energy costs; less
Community Migrant Resource Centre in Western vulnerability to energy supply disruptions, resulting
Sydney, Australia, promoted its 3E Project of energy in higher product quality and productivity;
efficiency and free energy audits, it published its compliance with government regulations regarding
fact sheets in seven languages. energy efficiency or environmental requirements;
more attractive status as a supplier in a supply chain
A public programme launch is an opportunity to where larger corporations prefer suppliers that can
raise awareness of the programme and its goals. The help them reduce costs, and meet their corporate
style of a launch will vary with the size and scope sustainability commitments.
of the programme and its partners (Box 12). It may
include a suite of communication activities such as: A comprehensive website is a key, because it
makes information available whenever an SME’s
zz official announcements from senior government schedule permits. Other communication initiatives
or business leaders might include information seminars, webinars, and
zz presentations by SMEs that have already promotion through industry associations and other
benefited from energy efficiency improvements organisations with established communication
channels.
zz presentations of positive news stories for
mainstream and social media.
© OECD/IEA, 2015
Consider filming the launch as a live webinar or

recording it for future promotional use. Encourage
SMEs to participate in the launch.

Box 12 Raising programme awareness Promoting existing programmes in Europe
Euratex, the European Apparel and Textile
Using a variety of tools to reach their Confederation, launched the Energy Made to
audience in South Africa Measure communications campaign in 2014.
The campaign does not create programmes but
In 2013, South Africa’s National Business instead researches and presents existing energy
Initiative (NBI) launched the Private Sector efficiency resources to its membership. This
Energy Efficiency (PSEE) programme with improves the reach of existing programmes and
USD 13.5 million in support from the UK simplifies SMEs’ access to the support they need.
government. Small companies are offered free
practical advice on no-cost measures, and Energy Made to Measure organised 21 public
medium-sized companies are offered free four- events in seven countries in 2014. These events
day on-site surveys and audits. Large companies cross-promoted existing programmes, including
can receive in-depth energy consultancy services the Sustainable Energy Saving for the European
subsidised by 60% (NBI, 2013). The programme Clothing Industry platform, and the projects
has worked with 3 000 small businesses, and ARTISAN and Save Energy in Textile SMEs.
savings of about 20% of energy costs have been
Source: www.euratex.eu/em2m.
identified (NBI, 2015). NBI raises awareness of the
programme via a website, regular workshops,
case studies, programme marketing materials
(including advertisements), and a regular
newsletter that reports on progress.
Source: www.psee.org.za/.
7 Manage the implementation process They also make it as easy as possible for SMEs to
access the assistance they need, from selection of
Continuously ensure that the programme meets a project through financing and implementation.
the needs of SMEs Use networks to promote the programme, and
encourage peer-to-peer learning (Box 13). One of
Even when support and resources are readily the most credible sources of information for SMEs
available, it can be difficult to engage SMEs in can be other SMEs: peer-to-peer networks permit
energy efficiency programmes. SMEs have limited SMEs to learn from one another.
resources, they need to focus on keeping the
enterprise running on a day-to-day basis and they It may be tempting to try to get as much data
do not typically have the advantage of being able and information from SMEs as possible to better
to assign responsibility for energy efficiency issues understand opportunities, provide support and
© OECD/IEA, 2015
to anyone as a full or even part-time responsibility. report on results. This can backfire, however,
Successful programmes build awareness among deterring SMEs from participating, if sufficient
SMEs over time, ensuring sufficient and easy to efforts are not made to build trust and engage
access information about how to participate, criteria partners that already have the trust of SMEs. Efforts
and what is expected of participating enterprises. to make application processes as comprehensive

as possible can also backfire, as SMEs have requires too much effort, time or other resources.
limited time and resources to spend on filling out Support should be adjusted to the situation of
bureaucratic forms. SMEs. Mechanisms that can be helpful are site
visits, information or technical guidance hotlines,
While for larger enterprises it may be sufficient to online guidance (easy to navigate), online reporting
provide information, tools and incentives for them forms (easy to use) and access to technical support
to start managing their energy, SMEs need more whenever needed.
support throughout the process. There is a high risk
that SMEs will opt out if any of the programme steps
Box 13 Streamlining reporting over prescriptive measures with deemed savings.

requirements and working At the same time, it avoided the detailed analysis
with vendors and one-on-one assistance that is required for
custom measures.
The Energy Trust of Oregon (ETO)’s Small
Industrial Energy Users Programme, established ETO served so many SME customers that
in 2008, sought to avoid an overly bureaucratic programme staff could not reach out to them
application process and burdensome reporting directly. They decided to make use of a network
requirements. ETO developed a new class of trade allies made up of equipment vendors.
of “calculated savings” incentives, which fall Vendors already have expertise in the equipment
between prescriptive incentives that offer a set they sell and install, and in many cases they
amount based on installing certain equipment, have existing relationships with customers.
and custom incentives that require detailed Furthermore, when equipment at a plant breaks,
engineering calculations to identify technical plant managers often call those same vendors to
solutions, costs and projected energy savings. get an immediate solution and vendors involved
ETO staff identified typical energy efficiency in the programme can promote energy-efficient
measures (such as variable speed drives or air solutions that may otherwise not have been
compressors) and developed templates of the considered. ETO estimates that the programme
analyses that could be applied to many future has been responsible for over 16 million kWh in
projects by using site-specific data. This method savings (Trombley, 2014).
improved the confidence of savings estimates
Ensure that programme components reinforce reports may require additional capacity building
each other and training. Capacity building may also be needed
to develop bankable projects. Financial institutions
Information, expertise-building and financing may need information about SMEs and energy
components alone do not suffice to build an efficiency and capacity building to work with SMEs
© OECD/IEA, 2015
efficiency programme. A package of all three on energy efficiency.

components is critical, as they reinforce each other.
Information is needed on where to find external There are large variations among SMEs and their
expertise and where to access appropriate finance. needs for information and expertise vary. There
While energy audits provide information, they are also large variations in the size of investments
also build in-house expertise. Interpreting audit needed and the ability to source internal and

external finance. SMEs’ experience with energy on other benefits, but without sufficient internal
efficiency projects also varies: some may have expertise or access to external expertise, they will
implemented no measures, while others may have most likely not progress far. Information coupled with
already started implementing measures. Depending expertise building improves the likelihood of project
on the composition of the selected target market, implementation, particularly if the programme
there may be a need to differentiate offerings to ensures access to external expertise (Box 14).
better cater to these differing needs. However, if the identified options require investment,
it is unlikely that they will be implemented without
Just providing information to SMEs rarely results in access to suitable financial products.
the implementation of energy efficiency. For instance,
audits can help motivate SMEs to engage in energy
efficiency, especially if they also provide information
Box 14 Energy audits and access the government-owned development bank KfW,
to funding provides grants for SMEs to obtain advice and
consultation. Audits are split into “initial” and
Sweden “in-depth”; 80% of the initial audit fee and 60%
In Sweden, several municipalities joined forces of the in-depth audit fee can be covered by a
in 2006 in Project Highland to offer energy grant (up to an upper limit). The programme is
audits for SMEs. This resulted in 340 two-day administered by the Federal Office for Economic
energy audits in six municipalities. The measures Affairs and Export Control (BAFA).
focused primarily on support functions, such as
There was a high implementation rate of audit
lighting and space heating, rather than on core
recommendations and 5 000 audits were
production processes.
conducted each year. Energy savings were
The implementation rate of recommendations around 1.4 terawatt hours (TWh) per year,
was about 40%. Energy savings were around equating to around EUR 80 million in energy cost
75 725 MWh per year. In addition, the energy savings. CO2 savings were 470 000 tCO2 from a
audits from the evaluated companies resulted in total programme investment of EUR 480 million.
energy conversions to district heating (22 GWh) Programme costs were EUR 0.5-0.7/MWh energy
and on-site biofuel boilers (3 GWh). Energy saved and EUR 0.03-0.06 per euro of investment
savings per private capital were 7.5 kWh/EUR. induced.
Companies surveyed after the programme said The key success factors were the availability of
it was easier to receive funding when having an sufficiently high subsidies to encourage SMEs
audit report to rely on. Presenting the identified to participate and the SMEs’ own low expenses.
opportunities in economic terms (saved EUR Furthermore, delegating responsibilities to
per year) and including investment assessments regional partners was important, particularly in
were key factors for increasing the adoption rate terms of personal communication between the
regional partners and SMEs. The high quality
© OECD/IEA, 2015
(Price and Lu, 2011; Karlsson, 2012).

of the energy audits was also cited as a success
Germany factor (Gruber et al., 2011).
In Germany, the Special Fund for Energy
Efficiency, first implemented in 2008 through

Sustain results International Organization for Standardization (ISO),
the International Trade Centre (ITC) and UNIDO,
Successful energy efficiency programmes motivate shows how SMEs can use energy management
SMEs to continue to manage their energy, explore systems to achieve continuous energy savings.
energy efficiency opportunities and invest in
energy efficiency. Energy management systems, Other ways of sustaining continuous energy efficiency
often seen as more relevant for large enterprises, improvements are to plan for follow-up audits or to
can be a useful tool for sustaining continuous provide incentives such as energy efficiency awards
energy efficiency improvements in SMEs (Box or recognition.
15). The US Department of Energy (DoE) provides
Regular communication of programme progress
additional support to SMEs to enable them to
to participants can also help motivate SMEs to
participate in the Superior Energy Performance
continue to be engaged in the implementation of
(SEP) programme, which aims to stimulate the
energy efficiency. Highlighting the achievements of
uptake of the ISO 50001 standard for energy
participating companies can be a strong motivator.
management. A new handbook, ISO 50001 – A
practical guide for SMEs, a joint initiative of the
Box 15 Energy management systems are Energy management in the retail sector in
relevant for SMEs the Netherlands
In the Netherlands, the company Lidl has ISO

Building skills in Hong Kong
50001 certified almost 400 of its branch stores,
The Hong Kong Electronic Industries Association with about 28 employees per store. The most
and Hong Kong Productivity Council, with important motivations were cost reduction and
funding from the Singapore government’s energy awareness within the organisation. A key
SME Development Fund, has developed a aim was to enhance the company’s reputation.
programme to show that energy management The investments required were moderate:
systems are relevant for SMEs. The programme EUR 12 000 for certification and EUR 4 000 for staff
has adapted training designed for large training. The training focused on understanding
organisations so that SMEs can use the ISO where and how energy is used, and on quickly
50001 standard for energy management. The finding and addressing problems or equipment
support programme introduces the benefits of malfunctions. The process took three months
energy management and the skills needed for (four days a week of staff time). This was possible
successful implementation. The programme because many processes and procedures
includes a telephone hotline and a subsidised were already in place and needed only minor
energy review of SME operations. Short seminars modification to make it applicable for ISO 50001.
explain the main requirements of the ISO 50001
A key success factor was providing training tailored
standard. For SMEs that want to go further,
to the skills and needs of non-technical staff.
a reference guide and training sessions are
Energy savings have been 5% to 10% on average
provided to support companies through the
© OECD/IEA, 2015
(with savings on store level up to 30%), largely

implementation process.
due to continual attention to the functioning of
Source: HKEIA (2014). the system and rapid response to problems. In the
future, energy management-related activities
could be expanded to the supply chain.

Verify progress and make improvements Another key aspect of the implementation process
is making improvements on the basis of monitoring
Ensuring that all parties are meeting their
results. A good monitoring system (see next phase)
commitments is an important part of the
will alert programme managers to problems that
implementation process. SMEs’ obligations, which
need to be dealt with. If the monitoring indicates,
should be clearly outlined when they join the
for instance, that there is limited participation,
programme, might include providing access to:
programme managers should consult with SMEs
zz the facility or site where energy audits and other to find root causes and re-initiate an adapted
activities are to be conducted and improved recruitment process that pays
consideration to the deterrents identified. Monitoring
zz data on energy consumption and business will also help highlight aspects of the programme
operations that are successful and that could be expanded.
zz personnel familiar with business operations and
potential improvement opportunities
zz decision-making personnel for energy efficiency

projects.
© OECD/IEA, 2015

TE

A
LU
PL
A
EV
A

N
MONITOR

MO
T
NI
O EN
T
R EM
IMPL
Monitoring should be considered as early as the

planning stage. It allows results, processes and
experiences to be documented and used to steer
decision-making and learning processes. An
essential part of the monitoring process involves
collecting and reviewing data, which provide a
quantitative means to measure and verify progress
towards meeting programme objectives. The data
and information acquired through monitoring
can be further used in the evaluation stage of
the programme. Monitoring processes need to
be realistic relative to the costs involved. SMEs
will rarely be interested in putting resources into
monitoring and verification beyond their needs.
Ensuring that the type of data collected is useful
and relevant for participating companies, not just
for the programme, will help data acquisition. The
costs of obtaining measured, accurate and verified
data need to be included in the programme budget.
To save time and effort, existing systems for data
collection should be reviewed and possibilities for
building on these should be explored. definitions may vary from one constituency to
another. All performance indicators used should
be “SMART” (Specific, Measurable, Achievable,
8 Collect and disseminate data Relevant and Time-bound) (IEE, 2013). Indicators
Regular monitoring and reporting of results and will be both quantitative, to understand the energy
issues keeps stakeholders informed, allows early efficiency opportunities and energy savings made,
detection of problems, and guide adjustments in as well as qualitative, to understand organisation
programme delivery. change and the effectiveness of the programme.
When considering data required, it is important
What data to gather to consult with participating SMEs and, if needed,
establish confidentiality agreements that outline how
Programme objectives will determine how best to gathered information can be used and publicised
measure progress. Establishing what to measure (Table 6). The frequency of data collection should
and monitor, and how to do this at an early stage, also be considered and efforts should be made not to
© OECD/IEA, 2015
will help avoid challenges later. Agreeing on the overburden participating companies with reporting
metrics up front is essential, as confusion is common requirements. Reporting requirements should be
between absolute measures and measures related streamlined and, if possible, existing reporting
to output. It is also important to establish clear systems should be used or built on, for example,
terms early in the programme development since environmental impact reporting.

Table 5 Energy saving data
Energy project Data

For each potential zz Fuel source
energy efficiency
project zz Estimated energy savings
zz Estimated investment required to implement
zz A measure to assess the profitability of the project (such as payback period,

net present value, internal rate of return)
For each potential zz As above, but with reason for not implementing the project
project not
implemented
For each potential zz As above, but with information on the degree of monitoring, and with
project implemented verification post-implementation
Information on benefits other than energy savings What and how to disseminate
and costs should also be sought. This will help
communicate the value of the programme and In consultation with stakeholders and partners,
its contributions to other policy targets, such as the project manager should develop reports in a
greenhouse gas emission reductions. Data on the suitable format for dissemination depending on
effectiveness of different components should also the target audience. Funding bodies may need a
be collected (e.g. number of SMEs participating formal mid-term progress report, while information
in workshops, number of downloads of guidance for SMEs could be presented on the website or in
documents on the website). Surveys can be used to a newsletter. Both weaknesses and strengths of
get SME feedback on application processes, quality the programme should be openly communicated
of materials, quality of training and audits, and so as to build trust between partners and
to gather suggestions for improvements. Project the programme administrators and SMEs. If
partners should also be queried regarding their participation in the programme is still open, initial
experiences and suggestions for improvements. results could be used to attract new participants
(Box 16). Potential participants are interested in
The collected information should be analysed and what the benefits have been for companies. Case
discussed with project partners. Indicators can be studies based on participating companies’ own
analysed at different scales: regional and national accounts of experiences with the programme can
level, within companies, at the company level, and be an effective tool in communicating the value of
at the sector or industry-wide level. the programme.
The analysis of data and information will reveal both
© OECD/IEA, 2015
progress and opportunities for improvement. This

information can then be used to refine relevant
aspects of the programme. The data from the
monitoring should be kept, to be utilised for the
evaluation phase.

Box 16 Communicating results in Japan ECCJ’s impartial role allows it to accumulate
data on the results of individual energy-saving
projects, which is then published in aggregated
The Japanese Ministry of Economy, Trade and form. ECCJ identified an average of 8% energy
Industry (METI) subsidises energy audits for savings in each business. Follow-up assessments
businesses with an annual energy use exceeding found that around one-third of the potential
1 500 kilolitres in crude oil equivalent. The projects identified have been implemented.
audits are carried out by the non-profit Energy This information effectively conveys the value of
Conservation Centre of Japan (ECCJ), which energy efficiency measures to other businesses
has no links to equipment or service providers. across different sectors.
Average energy-saving rate [%]

0 2 4 6 8 10 12
Agricultural industry [26]
Lumber and wood product manufacturing industry [33]
Textile industry [127]
Furniture and fixture manufacturing industry [20]
Tannage, tanned skin product and fur manufacturing industry [2]
Oil and coal product manufacturing industry [17]
Water utility industry [304]
Chemical industry [252]
Rubber product manufacturing industry [49]
Industrial machinery and apparatus manufacturing industry [74]
Production machinery manufacturing industry [102]
General-purpose machinery and apparatus manufacturing industry [68]
Ceramic and stone/clay products manufacturing industry [136]
Metal-ware manufacturing industry [287]
Plastic product manufacturing industry [240]
Electronic component/device and electronic circuit manufacturing industry [110]
Transport machinery and apparatus manufacturing [243]
Steel industry [75]
Electrical machinery and apparatus manufacturing industry [264]
Information and communication machinery and apparatus manufacturing industry [37]
Nonferrous metal manufacturing industry [62]
Average energy
Pulp, paper and paper product manufacturing industry [61] saving rate (LHS)
Gas industry [5]
Laundry, barber, beauty salon and bathhouse industry [36]
Energy-saving amount
Beverage, tobacco and feed manufacturing industry [91] per factory (RHS)
Printing and related industries [106]
Food manufacturing industry [452] [ # ] Sample size
Heat supply industry [12]
0 50 100 150 200 250 300 350 400 450 500

Energy-saving amount per factory [kL/year]
Source: ECCJ.
© OECD/IEA, 2015

TE

A
LU
PL
A
EV
A

N
EVALUATE

MO
T
NI
EN
O zz What lessons from the programme could be
T
R E M
IMPL
shared with government policy makers to inform
the development of future policies?
Evaluation is the systematic and objective
assessment of a completed programme or a phase Determine cost-effectiveness
of an ongoing programme. Evaluations entail
Assessing the cost-effectiveness of a programme
collecting and analysing information to inform
is an important part of the evaluation. In its
strategic decisions regarding the direction of the
simplest form, energy efficiency cost-effectiveness
programme or other initiatives.
is measured by comparing the benefits of an
investment with the costs (Figure 3). Cost-
9 Evaluate programme impacts benefit analysis requires comparing the up-front
A programme evaluation provides information that investment needs with the monetised flows of
can be used to: costs and benefits over a period of time. To make
a meaningful comparison of the initial investment
zz assess programme impacts
with the flow of costs and benefits taking place
zz assess effectiveness of programme measures in the future, these costs and benefits should be
and instruments discounted using an appropriate discount rate. For
a more comprehensive assessment, cost-benefit
zz identify opportunities to improve programme
analysis should be considered together with
design and delivery
qualitative analysis of other costs and benefits not
zz establish the extent to which a programme’s monetised in the calculations (Box 17).
influence is driving future energy efficiency
improvements through long-term changes in Numerous methods can be used to assess cost-
the marketplace effectiveness; frequently a combination of methods
will provide the type of information needed. Key
zz establish the cost-effectiveness of the considerations include:
programme.
zz Whose benefits are being considered –the
The evaluation can be used to answer some of the
programme participant’s or society’s?
following questions:
zz Is the programme achieving its objectives? If so, zz What should be included in costs and benefits
how and why? (avoided energy use, avoided need for
new generation and new transmission and
zz What changes would improve the programme? distribution, benefits other than energy savings)?
zz How does the cost-effectiveness and impact
zz How should the baseline (starting point with
of the programme compare with other
which subsequent changes are compared) be
programmes?
defined?
zz Should the programme be replicated, adjusted
© OECD/IEA, 2015
or cancelled? zz What costs and benefits would have been

realised without investment in energy efficiency?
zz What lessons from the programme could
help others to improve the planning and
implementation of SME energy efficiency
programmes?

Figure 3 One approach to assessing cost-effectiveness
Measure Firm Total programme Total programme

Energy savings Energy savings Energy savings Cost-effectiveness
CO2 mitigation CO2 mitigation CO 2 mitigation Public spending
Investment Investment Investment
Payback time Audit costs
Measures Number of NPV calculation

implemented participating (discount rate,
per audit firms energy prices, lifetime)
Source: Fleiter et al. (2012).
Box 17 Evaluation can demonstrate net CO2 and other emissions abated was calculated
benefits at USD 44 million in 2020 and over USD 88 million
in 2030. It was estimated that almost 1 800 ktCO2
The Sustainable Energy Authority of Ireland (cumulative) will be abated to 2030, at a net
(SEAI) has been implementing an energy benefit to society of around USD 220 per tonne
efficiency programme targeted at SMEs since of CO2.
2007, providing assessment, advice and training.
An evaluation shows that more than 1 470 After all programme and investment costs were
companies participated in the programme and taken in to account, the evaluation estimated the
reduced their annual energy consumption by net benefit to society at USD 178 million in 2020,
around 10%. The cost of saving one kilowatt increasing to USD 425 million in 2030, when the
hour was estimated at USD 0.020 (to 2020) to lifetime of savings measures is included. Every
USD 0.008 (to 2030) compared with an average USD spent by SEAI via the programme delivers
electricity cost of USD 0.090/kWh, assuming a net benefit to society of USD 16.5 to 2020, and
an average lifetime of 12 years for the energy USD 36 to 2030 (Scheer and Motherway, 2011).
savings measures. The total programme budget
in 2010 was USD 1.3 million. The present value of
Define the scope of the evaluation zz What evaluation methods will be used?
Although programme managers and other zz Which stakeholders will be included in an
stakeholders might like to evaluate many aspects evaluation sample and what method of sampling
of a programme, time and resources will impose will be used?
limits on what is possible. Establishing a clear scope
for an evaluation early in the planning process, and A professional evaluation firm can be retained for
allocating the necessary resources, will help. When this task, but the programme must define its needs
© OECD/IEA, 2015
planning an evaluation, consider: clearly in order to solicit accurate job quotations.
zz What is the most important: programme

impacts; programme delivery or changes in the
marketplace?

Gather data to assess programme impact a particular intervention. Participants may also learn
about creative strategies that individual companies
A framework for gathering data should be have used to improve their energy efficiency.
established in the planning phase of programme However, with both surveys and focus groups,
development. This will help to establish a responses are self-reported, which can introduce
baseline for the programme participants and to biases:
encourage them to collect data throughout the
implementation process. Data collection can be zz Participants may focus more strongly on the
built into the programme. For example, energy positives rather than the negatives of their
audits establish a baseline that can be updated organisation’s energy efficiency activities in
over time. order to show themselves more positively
compared with other organisations.
Evaluation tools and approaches zz Participants may respond based on what they
think those conducting the focus groups want
Evaluation tools vary in cost and data quality.
to hear.
Typically, using a combination of measures should
balance the shortcomings of each, yielding more zz Participants may not recall information
accurate results (Table 7). While surveys are accurately (memory bias).
efficient, the interactive nature of focus groups and
workshops can produce unexpected and valuable zz In focus groups, participants may be influenced
insights. By sharing their perspectives, SMEs and by the responses of other participants.
other stakeholders may identify barriers, craft
solutions and improve the participation rate for
Table 6 Evaluation tools
Desktop review, e.g. of energy Contribution depends upon the

Relatively cost-effective.
audit reports or case studies quality and content of reports.
Survey An efficient means of obtaining Can be difficult to achieve a
information from a large number high response rate (i.e. number
of respondents. of returns relative to number of
surveys sent out).
Interview Provides deeper insights into Can be resource intensive, and
programme strengths and many interviews are required to
weaknesses compared to reduce the risk of bias.
surveys.
Focus group The interaction of participants Can be resource intensive, and it
can generate more may be difficult to assemble an
© OECD/IEA, 2015
comprehensive discussion. appropriate mix of participants.

Case study Provides an in-depth perspective May be biased towards those
on the programme from a single SMEs where the programme
SME perspective. outcomes have been most
significant.

When evaluating programmes, energy savings zz Can the ongoing programme experience
adjustments should be made to account for factors generate checklists and tools that might simplify
that affect programme performance, such as free participation for future SME participants?
riders, rebound effects and ensuring additionality.
Free riders are SMEs that would have engaged in zz Is it possible to reduce subsidies for components
energy efficiency activities regardless of whether of a programme (e.g. energy audits), once the
or not the energy efficiency programmes existed. value and benefits have been illustrated by initial
Rebound effects can occur when financial savings programme participants?
from reduced energy consumption are used to zz Has the programme shown that particular
increase energy use overall, either directly (through technologies or measures are more popular
the same activities) or indirectly (through other within a particular industrial sector, or in other
energy-consuming activities). Rebound effects are sectors that use similar technologies?
not necessarily negative and can lead to increased
productivity in SMEs without increasing their overall zz Where training has been part of a programme,
costs. Ensuring additionality refers to the necessity can a “train-the-trainer” approach be developed
for the programme evaluators to demonstrate that to broaden the reach and accessibility to the
the programme(s) achieved energy savings additional training?
to what would have occurred in the absence of the
programme. Estimating the energy consumption A programme’s expansion and deployment
baseline is crucial in this respect (Warren, 2015). strategy will depend upon its initial successes, as
well as the motivation of target SMEs. However, a
Communicate results thorough analysis of the evaluation and all of the
expansion options is essential. A workshop setting,
Evaluation results should be made public whenever with a range of stakeholders, can be particularly
possible. This will ensure a degree of transparency productive.
and help the programme to improve over time.
Where there are positive results, the evaluation
may also serve to promote the programme to new Plan next steps and future actions
stakeholders. Irrespective of the methodology used, evaluations
provide a good basis for reporting results to
10Adapt the programme stakeholders and deciding whether or not to
and plan next steps continue the programme. Evaluations can indicate
opportunities for improvement and possibilities for
Evaluations often reveal opportunities to improve
scaling up the programme by highlighting success
a programme, perhaps through adding new
factors as well as weaknesses.
components or tailoring the support delivered
to SMEs. Such adjustments can improve both
the programme administration and the ease of Scaling-up programmes
implementation by SMEs.
Scaling-up processes can take many forms,
Evaluations also provide an opportunity to explore including expanding, replicating, adapting and
the best way to scale up a programme. Consider the sustaining successful programmes in a geographical
© OECD/IEA, 2015
following questions: space and over time to reach a greater number.
zz Can the early successes in a programme be Planning is an important component of the scaling-
exploited to demonstrate the benefits to a wider up process. It is essential that all stakeholders who
group of SMEs? will be counted on to move the programme to scale

are involved from the start. Scaling-up opportunities When considering scaling up, a long-term
should be considered at the outset of programme timeframe (five to ten years or more) is essential.
design rather than coming as an afterthought. The more developed the programme design and
Activities that have been designed as pilot or experience before expansion, the more durable the
demonstration projects, but have not considered programme will be as expansion occurs.
the requirements of translating activities to a broad
scale, may not be suitable for effective scaling up.
© OECD/IEA, 2015

SME programme case studies
Introduction
This Policy Pathway explores three case studies that targeted information and support from a
highlight key success factors of energy efficiency stakeholder they trust and have an existing
programmes: relationship with. Delivering a programme
through industry associations and community
zz The European Bank for Reconstruction and organisations enabled greater reach than
Development’s Sustainable Energy Financing would have occurred through the government
Facility. The EBRD’s Sustainable Energy alone. The Australian programme also provides
Financing Facility, implemented in Central insights into the value of monitoring and
and Eastern Europe, complements funding for evaluation and how they can help uncover areas
on-lending to SMEs with capacity building for for improvements and next steps.
SMEs and commercial banks. This combination
of information, capacity building and finance zz Supply chain energy efficiency programmes.
enables SMEs to develop bankable projects and Supply chain energy efficiency programmes
banks to provide suitable financial products. are promising new way of effectively engaging
EBRD programme implementation highlight SMEs in energy efficiency by using existing
the importance of learning from experience relationships and expertise. Experience shows
and creating programmes that can be adjusted. that corporations are well placed to motivate
It also indicates the importance of incentives, and help SMEs improve their efficiency. The
management and staff engagement. case study looks at programmes initiated
by corporations such as IKEA, Walmart
zz The Australian Energy Efficiency and Johnson Controls. The US DoE Better
Information Grants. The Australian Energy Plants programme’s supply chain initiative
Efficiency Information Grants programme demonstrates that government support, in the
achieved significant results by using form of technical expertise, recognition or other
business associations’ existing networks and incentives, can be a powerful driver that could
communication channels to reach out to SMEs enable the expansion of supply chain energy
by providing incentives for them to work more efficiency initiatives.
actively on energy efficiency. SMEs received
Combining access to finance with business information and capacity

building: The EBRD’s Sustainable Energy Financing Facility (SEFF) model
Background of enterprises, threatens energy security and
contributes disproportionately to global warming.
The EBRD was established in 1991 to promote In 2006 the Bank launched its Sustainable Energy
private and entrepreneurial initiatives and market- Initiative with the aim of scaling up sustainable
oriented economies. EBRD is now active in more energy investments, improving the business
than 35 countries, from Central and Eastern Europe environment for sustainable investments and
© OECD/IEA, 2015
to Central Asia and the Southern and Eastern removing key barriers to market development.
Mediterranean.
The EBRD reaches out to thousands of clients such
Inefficient use of energy was recognised as one of as SMEs to assess their energy efficiency needs and
the most important and enduring challenges in the finance energy efficiency projects. The bank uses
EBRD region: it undermines the competitiveness its sustainable energy finance facilities (SEFFs) as an

intermediated channel for medium-term finance This situation was exacerbated by Bulgarian
(Figure 4). The SEFFs combine this access to finance bankers’ lack of technical skills and experience
with technical support, expertise building and with energy efficiency projects. For example, the
policy dialogue, and aim to help overcome barriers banks typically did not have the technical expertise
to market penetration of sustainable energy finance. required to appraise projects, and they often
had insufficient information about the technical
Through the SEFFs, the EBRD extends its credit risks and financial benefits of such projects. Thus,
lines to local financial institutions (banks, investors often believed energy efficiency projects
leasing companies, microfinance institutions) were technically risky or unlikely to deliver financial
for dedicated sustainable energy projects. These returns, particularly as compared with greenfield or
partner institutions then on-lend the funds to their expansion investments.
clients, many of which are SMEs. SEFFs have now
been rolled out across 22 countries to accelerate The EBRD’s research into these complex barriers
energy efficiency improvement in the commercial, guided its development of the first SEFF model. Key
residential and municipal sectors. So far, over features include:
100 local financial institutions ârticipate and
over EUR 2.4 billion of EBRD financing has been zz EBRD selects a project implementation team
committed SEFFs resulting in over 95 000 projects made up of both local and international experts
and saving over 5 MtCO2 per year. funded by donors to provide support and
guidance for the programme’s implementation.
This case study illustrates how financing facilities
can help SMEs to overcome the common barriers zz EBRD provides dedicated credit lines to local
that discourage energy efficiency initiatives. It financiers, enabling them to provide their clients
describes the model components and lessons with tailored energy efficiency loans.
learned from SEFFs in Bulgaria, Turkey and the zz SMEs receive technical support from the
Western Balkans. implementation team to identify potential
projects, and to develop funding applications.
Launching the SEFF model in Bulgaria
zz The implementation team helps local financial
When the SEFF model was deployed in 2004, institutions to develop this new market,
Bulgaria was experiencing significant energy including by establishing procedures, appraising
challenges. Ageing nuclear power plants that had projects and providing support with marketing.
produced more than 40% of the country’s electricity
The EBRD worked with nine commercial banks
were being decommissioned. As a result, Bulgaria’s
in Bulgaria to deliver financing of more than
SMEs faced rising energy prices and increasing risks
USD 286 million through SEFF programmes. Thanks
of a disrupted energy supply. Improving efficiency
to the “one-stop shop” financing model, SEFFs in
would address both problems.
Bulgaria successfully opened the market for local
But SMEs were unlikely to fund an energy lending to sustainable energy. A key component of
efficiency measure, as opposed to a core business their success was the technical assistance provided
improvement, because their awareness and (see Table 7) to both SMEs and banks, which was
© OECD/IEA, 2015
understanding of the benefits, availability, and funded by donors.

diversity of energy efficiency technologies was
limited. They also lacked formal business procedures
and in-house technical expertise to finance and
implement improvements.

Figure 4 The SEFF programme model
Credit lines
EBRD
Market
Project implementation team Local financial institutions
development
Clients
Project development Commercial loans
Source: EBRD (2014a).
Table 7 Technical support provided by a SEFF project implementation team
Financial institutions SME clients

Training staff in promoting new product Identifying energy efficiency investments and
enhancing project design
Supporting staff in recognising technically eligible Promoting the benefits of high performance
projects technologies
Marketing the benefits of the finance programme Supporting the completion of finance applications
Creating standards for environmental and social Providing guidance during and after project
due diligence implementation
Encouraging clients to originate investment

opportunities
Source: Adapted from EBRD (2014a).

© OECD/IEA, 2015
Capacity building with local Financing Facility (TurSEFF) also supports local
banks in Turkey banks with a wide variety of expertise-building
opportunities, including:
The SEFF programme in Turkey confirmed the
critical role of local banks and the necessity of zz Classroom sessions: These are typically scheduled
supporting them. The Turkey Sustainable Energy early in the deployment process and explore

eligibility criteria for the SEFF, technical aspects Supporting SEFFs with policy shaping and
of project identification and evaluation, case direct financing in the Western Balkans
studies, and sales considerations.
As SEFFs have extended to new regions, the EBRD
zz On-the-job training: Project implementation has improved their effectiveness by working closely
teams work with loan officers and branch staff with financial institutions and other stakeholders.
to screen their portfolios for potential projects. SMEs in Croatia, Bosnia and Herzegovina, Serbia,
This direct support and mentoring reinforces the and FYR Macedonia can access loans and technical
classroom training and enhances quality control. support for energy efficiency projects through local
zz Appointment of SEFF ambassadors: Individuals banks involved in the Western Balkans Sustainable
within the local banks receive additional training Energy Financing Facility (WeBSEFF). In addition,
in recognising opportunities, actively promoting the EBRD provided a package of policy dialogue
the SEFF and working more directly with clients assistance, such as legislative support to enable
to identify energy savings. energy efficiency projects, direct funding, technical
support and incentives.
zz Developing staff incentive schemes: One of
the partner banks worked with the TurSEFF For example, in Serbia, the EBRD used policy
implementation team to create an incentive dialogue to shape legislation that will allow
scheme that rewarded staff for promoting SEFF development of energy performance contracts by
loans. After this was introduced in September energy service companies (ESCOs). Under these,
2011, the bank’s disbursements tripled from an experienced private sector ESCO guarantees a
USD 12 million in the third quarter of 2011 to specific level of service performance to its SME client.
USD 36 million in the final quarter of 2011. This ensures that the SME’s investments in energy
efficiency, and the cost of energy service delivery,
zz Encouraging the development of local marketing are covered by the savings that those improvements
solutions: Local marketing solutions and generate. EBRD’s contribution included drafting an
motivated staff are essential. This was illustrated ESCO by-law and creating contract templates that
at a partner bank in Turkey where motivated make it easier for ESCOs to develop and implement
staff quickly recognised the market opportunity energy performance contracts.
in sustainable energy. These staff enthusiastically
marketed the programme by organising regional To complement the existing SEFF in the Western
client workshops to introduce the SEFF and Balkans, a direct lending facility is also in place and
promoting it internally through branch visits. makes available loan amounts of USD 1.1 million
However, after a few months this team moved to USD 6.6 million for medium-sized projects that
to a competitor bank. Without this enthusiastic cannot obtain funding from commercial banks.
team, the first partner bank’s lending for Technical support includes energy audits and
sustainable energy projects fell sharply and technical advice. Incentive payments made at
took a long time to recover. By contrast, the the successful completion of the eligible projects
competitor’s disbursements in this sector encourage quick implementation.
accelerated rapidly (EBRD, 2014c).
Lessons from the SEFF experience
© OECD/IEA, 2015
The success of the SEFF model as an innovative

financial instrument has generated important
lessons that can benefit energy efficiency
programmes across the world.

The ultimate goal of the SEFFs is to create a essential. Technical support proved to be complex,
demand-driven, self-sustaining market for and it demanded a long-term commitment.
sustainable energy financing through local financial For it to be effective, the EBRD had to build up
institutions. The Bulgarian deployment of SEFFs its in-house expertise so that it could in turn
highlighted a number of improvements that could support the technical supporters on local project
enhance the programme’s future effectiveness. The implementation teams.
main lessons were:
Information and marketing is essential to Applying the SEFF lessons

familiarise SMEs with the general benefits of
SEFFs have evolved continuously over the years,
energy efficiency and with the specific offerings
incorporating design and implementation lessons
of the programme. Marketing the programme
from previous iterations. Innovation has been
to SMEs, recognised early on as a key factor for
essential to increasing SEFF effectiveness and
the success of the model, demanded specialist
remaining at the leading edge of sustainable energy
marketing skills, along with significant additional
financing across many countries. Some of the
financial resources. Technical consultants provided
innovative solutions introduced are:
expertise to banks and SMEs, including the creation
of dedicated SEFF websites. Marketing has also zz Broadening the range of financial
been channelled via the local financial institutions intermediaries has increased the route to
through a marketing plan and toolbox of activities; market for the EBRD financing, especially for
these have been increasingly supplemented by local standardised solutions, and enabled greater
financial institutions’ own resources. influence on end-beneficiaries (including leasing
companies, ESCOs, households, and technology
It takes time to build momentum for the
vendors and suppliers).
disbursement of loans. Developing a new
financing instrument and building expertise within zz Skills transfer to local experts and financial
partner banks is time-consuming. The commercial institutions’ staff have ensured local capacity,
banks needed to establish a new loan application with international leadership tailing off over
and new review processes. Then they needed to time.
train internal staff. They also needed to create new
marketing channels to promote the loans, and new zz Project implementation teams. Blending
reporting tools to monitor progress. local and international experts on a project
implementation team provides essential
Engagement with participating financial local context and continuity for programme
institutions is a key success factor. The motivation deployment.
of local financial institutions is essential for the
ongoing success of the SEFFs. This requires a clear zz Grants, when used, have been structured to
demonstration to banks that energy efficiency increase transition impact, for example by
financing is profitable, improves relations with the requiring even higher energy performance or
bank’s industrial and commercial clients, and helps packaged solutions.
banks to meet regulatory requirements associated
zz Understanding and engaging with local
© OECD/IEA, 2015
with clean energy and climate change.

financiers. EBRD works intensively with local
Programme staff play an important role in financiers to create a long-term transformation in
ensuring that technical co-operation is effective. the lending market. EBRD works particularly hard
The initial experience confirmed that strong to demonstrate how energy efficiency financing
technical support to both banks and SMEs was can be commercially viable and profitable.

zz Providing technical support for SMEs. By an important role in unlocking the many benefits
providing energy audits and business advice to that energy efficiency can deliver. In many of these
SMEs, the EBRD ensures a steady supply of quality new countries, such as those in the Southern and
projects that will be eligible for SEFF funding. Eastern Mediterranean, SMEs make up a large part of
the market, delivering 90% of new jobs in the region
zz Policy dialogue opportunities have been explored (IEA, 2014c). Given the success of SEFFs in addressing
in parallel to SEFF implementation, and in some barriers to energy efficiency in SMEs, they will provide
cases provided up front, to support the creation an important mechanism to reach the globally needed
of specific markets and enabling environments goal of reducing GHG emissions while enhancing
for sustainable financing (e.g. energy efficiency the competitiveness of local economies. In general,
regulations and energy performance contracts). SEFFs are designed to help financial institutions fund
zz Combining SEFFs with other mechanisms such energy efficiency as well as resource efficiency (water
as direct lending and policy support. These and material efficiency) in SMEs, corporate, municipal
initiatives help to address economy-wide barriers and residential sectors. They have been successfully
that limit the uptake of energy efficiency projects implemented in 22 countries and attract significant
by SMEs. levels of demand.
zz Learning from experience. The commitment of The EBRD will also continue to play an important role
the participating financial institutions, and their in promoting the importance of energy efficiency
close interaction with SEFF implementation teams, finance, collaborating with other banks around the
are vital to the success of SEFFs. It is therefore world to do so. For example, in September 2014,
extremely valuable that the people at the forefront together with the world’s six multilateral development
of SEFF implementation are able to communicate banks, as well as in September 2015 at the forum
early and often with banks to thoughtfully shape on “Building a Global Energy Efficiency Financing
SEFF products. Alliance” in Istanbul, the EBRD together with over 70
financial institutions reaffirmed its commitment to
lead by example in responding to the challenge of
Conclusions climate change. During COP21 in Paris, the SEFF model
is presented as a vehicle demonstrating that financial
The SEFF model has succeeded in accelerating energy
instistutions are integrrating energy efficiency into
efficiency improvement in SMEs by combining
their business operations and that continued support
dedicated finance with capacity building and technical
for their activities is critical in addressing climate
support. As the EBRD expands the number of countries
change.
within which it operates, SEFFs will continue to play
Australia: Using industry associations

and non-profit organisations to educate SMEs
Background The programme’s objective was to empower
both SMEs and community organisations to make
© OECD/IEA, 2015
The Australian Energy Efficiency Information informed decisions about energy efficiency and
Grants (EEIG) programme was established to thereby reduce their operational costs. Grants were
address an identified lack of knowledge about offered to industry associations and non-profit
energy efficiency among SMEs and community organisations that could deliver practical, tailored
organisations. This lack of knowledge contributed energy efficiency information to SMEs or community
to SMEs not seeing energy efficiency as a priority. organisations. The programme disbursed a total of

USD 24.6 million in merit-based, competitive grants. facilities; online interactive tools, videos and
Some 46 recipients received amounts of USD 81 000 calculators; advice hotlines; site visits; and
to USD 1 390 000. Two funding rounds were offered, newsletters.
one in February 2012 and another in October 2012.
All projects were completed by 30 June 2015. To extract the maximum value from grants, EEIG
The programme was managed by the Australian promoted the sharing of both information products
government’s Department of Industry and Science. and project experience. It sent all grant recipients
a quarterly newsletter that featured problems
The EEIG programme was part of a package of encountered, lessons learned, good news stories,
measures to help SMEs adapt to the changing and the launching of websites. The newsletter kept
energy landscape. Funding for the programme recipients apprised of one another’s progress and
originated from general revenue. The programme encouraged them to share experiences and advice.
was successful when a trusted source made it easy This emphasis on communication has resulted in a
for an organisation with little time or money to number of recipients pursuing partnerships among
acquire high-quality information. These successes themselves and externally so that their projects
demonstrated that when businesses are offered could continue beyond the completion of the
tailored, solutions-driven education, they will start EEIG programme.
to engage in energy efficiency.
The funding agreement with EEIG grant recipients
provided the department with a licence to use any
Programme implementation energy efficiency information material produced
with grants funds. This enabled the department
The EEIG programme used a merit-based evaluation
to reproduce or publish effective material for
of project proposals. Projects were evaluated on
distribution in other sectors or locations, or on
the basis of effectiveness, design and management
the Internet.
and value for money. While an open, merit-based
grant programme does not guarantee equal
delivery across all industry sectors, it fosters higher-
quality projects. Providing detailed grant funding
guidelines, with clearly articulated merit criteria
and assessment methodologies, contributed to
successful programme outcomes. And by revising
the grant funding guidelines between funding
rounds, it was possible to make changes on
the basis of lessons from the initial programme
implementation phase.
The EEIG programme included agriculture and

food processing; commercial property; community
services; manufacturing; retail; and tourism.
That diversity demanded a similar diversity of
information products and delivery methods,
© OECD/IEA, 2015
carefully tailored to each target audience (Box 18).
Information products delivered by successful

projects included: face-to-face and online training;
fact sheets; how-to guides; case studies; on-site
energy audits of businesses and community

Box 18 An EEIG project example benchmark their energy performance
against industry best practice and to help
them locate key opportunities within their
The Australian supply chain and logistics business.
industry generates 37% of Australia’s emissions,
a share that has grown by 80% in the last zz Fact sheets on road transport operations;
20 years, but SMEs in this sector are often warehousing, refrigerated stores and
neglected by efforts to improve energy materials handling; alternative fuels; the
efficiency. Even when assistance is available, importance of procurement in energy
SMEs frequently lack the time, expertise, savings; and energy efficiency “on a
funding and freedom from immediate business shoestring.”
pressures that would allow them to analyse and
zz How-to guides on: data systems and
improve their energy use.
management; identifying opportunities;
To address this need, the EEIG programme evaluating opportunities; and
awarded a grant to the Supply Chain and implementation.
Logistics Association of Australia (SCLAA),
zz Case studies on the achievements of selected
which proposed to develop and deliver
SMEs (McGill’s Transport; Keysborough; and
energy efficiency information to the Australian
Xtreme Freight).
transportation and warehouse sector. SCLAA
identified multiple energy-saving opportunities zz A webinar series.
across the entire industry, including
warehousing, distribution and road, rail, sea and zz A dedicated website that helps SMEs to
air transportation. understand where and how energy is used in
their business, and offers strategies to reduce
Through a project called Energy Efficiency energy use and stabilise operational costs.
Solutions for Australian Transport and Logistics
SMEs, SCLAA developed a suite of information, For further information on the Energy Efficiency
including: Solutions for Australian Transport and Logistics
SMEs project, and to access the tools available,
zz A Step Guide to help SMEs identify, evaluate see http://sclaa.com.au/.
and implement efficiency projects. This
included an assessment tool to help SMEs
Company-level impacts off-peak energy consumption from the grid by

installing solar photovoltaic cells, with further
The programme helped SMEs identify savings of approximately 50% from upgraded
improvements to their energy efficiency. Examples
© OECD/IEA, 2015
lighting. These savings will provide expected

include: total electricity consumption savings of
approximately 70%.
zz P&W Marine, Queensland, which casts and
machines high-precision components, is zz Angelakis Bros, a seafood, poultry and game
expecting to offset approximately 20% of its company with three manufacturing sites around

Adelaide, spent about 85% of its electricity the evaluation measured impact on:
budget on refrigeration. Through an EEIG-
funded audit, it learned that it could reduce its zz SME awareness and knowledge of energy
annual refrigerant costs by 96% and achieve efficiency, including opportunities for
annual electricity cost savings of USD 56 000 by improvement
upgrading and consolidating its refrigeration zz ease of accessing information and advice
plants.
zz SME attitudes towards energy efficiency, e.g.
zz GM Scott, an abattoir in New South Wales, perceived return on investment/effort and
improved the energy efficiency of its existing motivations for action/inaction
refrigeration systems by installing smart controls
to a newly built ammonia refrigeration plant zz key behaviours, including monitoring energy
and R404A refrigeration plant. They expect this costs
measure to deliver 155 MWh of energy savings
annually and reduce energy costs at the site by zz incidence of energy efficiency assessments and
USD 26 000. In addition, the smart controls will action plans
enable the refrigeration plant to operate at lower zz key barriers to taking action.
pressure ratios, which will reduce stress on parts
and prolong the operating life of the plant. The central component of the EEIG programme
evaluation was a pre-post survey of SMEs and
zz Capilano Honey, based in Queensland, uses community organisations potentially exposed
both electricity and natural gas; its total energy to EEIG-funded activity. The pre-activity survey
consumption is 18 000 gigajoules at a cost (March 2014) was based on 2 135 responses within
of USD 430 000 per annum. Its EEIG-funded the target audience. The post-activity survey (June
energy assessment identified energy savings 2015) was based on 1631 responses (of which
in pasteurisation (30%), compressed air (15%) 680 were EEIG participants and 951 were non-
and other thermal systems (10%). In addition, participants).
LED lighting and solar PV was recommended
to Capilano to reduce its annual energy costs. By establishing a pre-activity baseline and then
These savings constituted energy savings of over taking a post-activity snapshot, it was possible
USD 34 000 per year. to measure changes in awareness, attitudes and
behaviour over the life of the programme (Figure 5).
zz McLaren Vintners, a wine maker in South These analytics showed that initiatives like energy
Australia, will save USD 37 000, or 22 per cent efficiency assessments (with resulting action plans)
of its annual energy costs, by insulating its are most likely to lead to better outcomes in terms
processing tanks (at a cost of USD 166 500 and a of behaviour, attitudes and perceived knowledge.
return of investment in 4.5 years).
The surveys showed that those who participated
in EEIG-funded activities were less likely to
Programme evaluation report as barriers a lack of information relevant
The Department of Industry and Science engaged to their organisation or a lack of advice tailored
© OECD/IEA, 2015
consultants to evaluate the EEIG programme to their organisation. This suggests that the
throughout its four-year duration. These consultants EEIG programme was able to effectively address
developed a new instrument to measure energy information-related barriers.
efficiency awareness, attitudes and behaviour
among the target SMEs and community groups.
Designed around the EEIG programme objective,

Figure 5 Impact of the EEIG programme on expectations of return on investment
100%
90%
80%
70%
Would invest in energy efficiency
60% initiatives for other reasons, not
driven by financial return
50%
Would invest if there was a net
40% financial benefit within 4-10 years
30%
Would invest if there was a net
20% financial benefit within 2-3 years
10% Would need to have significant savings

immediately or a return on investment
0% within 12 months
% % % %
(n=2 135) (n=1 631) (n=680) (n=347)
PRE activity POST activity EEIG Participants EEIG participants
who had energy
audits undertaken
Source: EBRD (2014a).
The surveys further found that EEIG participants people, using existing information channels and
were more likely to have had an energy efficiency relationships, and targeting information to SME
audit or assessment and to have developed an needs. Programme managers also highlighted
energy efficiency action plan than companies not the importance of providing support beyond
participating in the programme. The proportion of information; capacity building is needed not only
programme participants having taken measures to for SMEs but also for the people who work with
reduce energy use increased across most sectors. SMEs. It was also found that targeting remote or
EEIG participants that had undertaken energy audits rural areas requires additional efforts.
showed the highest increase in taking practical
steps to reduce energy usage. Of these SMEs, nearly In terms of using existing information channels
half have developed an energy efficiency action and relationships and targeting the right
plan; 60 per cent were monitoring their energy people, trust is paramount to SMEs. Approaching
use on a quarterly basis; they were more prepared SMEs through trusted sources that know the
to accept a longer return on investment in energy sector and have credibility (e.g. local business
efficiency (i.e. up to ten years) (Figure 5); and were networks and local government contacts) was a
immediately undertaking energy efficiency activities more effective way of capturing the attention of
such as upgrading lighting and equipment, and the target audience than large-scale or indirect
changing staff behaviour. marketing. It is also important to find a business’s
key players: the person who recognises efficiency
© OECD/IEA, 2015
opportunities may not know the person with the

Lessons from the EEIG programme decision-making power. Sometimes a link must
be forged between energy advocates and senior
The EEIG programme reinforced the importance
members of staff.
of ensuring that information comes from a trusted
source, targeting the information to the right

In terms of messaging and information, a “show energy efficiency initiatives. Additional support
me the money” approach was more successful is required by SMEs to take energy efficiency
in garnering attention of SMEs. The biggest knowledge and turn it into action. This is because
incentives for efficiency action were concerns about many SMEs become overwhelmed when navigating
energy prices and the desire to maintain or enhance their way through the energy market, the
profit margins. Hence the majority of EEIG recipients application process for funding and the supplier
found that messaging that was short, sharp and market. They also lack adequate internal resources
provided a clear illustration of the costs and benefits to develop good documentation to go to the market
of energy efficiency (a “what is in it for them” for an implementation solution. Several SMEs also
approach) was most effective in attracting this reported that they received vastly different quotes
time-poor audience. To ensure the appropriateness for technologies and were unsure which would be
of energy efficiency material, focus group sessions best suited for their purposes. Others noted that
with SMEs are particularly valuable. These sessions they did not know what to look for when purchasing
allow SMEs to identify what information they would items (such as energy efficiency lighting) and
most value and the best mechanisms to deliver that that mistakes were made when these items were
information. purchased.
A “one-size fits all” approach is not appropriate The programme managers also found that energy
for SMEs. They need flexible support options to suit service providers could benefit from training that
a range of different businesses and sectors. Offering develops their skills and knowledge of energy
a variety of tools in a range of convenient ways efficiency options for SMEs. Providers have strong
ensures that participants can better engage with technical skills and experience conducting energy
energy efficiency information. For example, some audits in large organisations. To meet the needs of
participants noted that online tools were more SMEs, however, they may require training in more
useful for small businesses, whereas on-site audits clearly communicating the recommendations from
were better suited to medium-size businesses. energy audits so that non-technical, time-poor
Businesses that used multiple tools – for example, personnel in SMEs are not overwhelmed by the
attending a workshop in addition to undertaking variety of options available to them.
an audit – had greater results than employing one
component in isolation. To deliver programmes to rural and remote
areas, careful planning is needed. Serving these
SME managers placed high value on real world areas requires extra resources unless recipients and/
examples. Case studies and the testimony of peers or their partners already have a presence in the
who have implemented energy efficiency initiatives area. Where there is no presence in the area (and
are effective; written information and the testimony therefore no relationship in place with SMEs), the
of bureaucrats and consultants is less effective. target audience may initially assume that they will
Some SMEs are particularly wary of outside receive inferior service and therefore they do not
experts if they suspect a hidden agenda. Thus, for see the value in participating in energy efficiency
workshops, enlisting a speaker who has received an programmes. Fewer skilled practitioners can provide
audit and implemented energy efficiency changes advice in regional areas, so seeking out industry
is particularly effective. This speaker should address clusters, or even clusters of diverse SMEs, can be
© OECD/IEA, 2015
the expenses incurred and the savings that resulted. helpful so that support services and distribution
networks can be used to reach these areas.
In terms of the need for additional support
beyond information, the programme managers
found that there is a gap between the receipt
of information and the implementation of

Conclusions SMEs need to know what to focus on and how
action can easily and quickly be taken. Ideally, they
The EEIG programme was successful in reducing need to be provided with some financial support
SMEs’ perceived barriers to taking action on energy or demonstration that up-front cost is not an issue
efficiency – particularly in terms of overcoming a lack where savings are immediate.
of information and tailored advice – and in raising
awareness and enhancing knowledge of the benefits The evaluation of the EEIG programme by both the
of energy efficiency. However, up-front costs, and department and outside experts has ensured that
lack of time and staff resources, remain key barriers. results, impacts and lessons have been captured
and will be thoroughly analysed to inform future
The projects that included deeper capacity building, policies and programmes.
such as energy audits, clearly had a bigger impact
than those that were purely information-based.
Supply chains present major energy efficiency opportunities

Background efficiency product supplier – illustrate these
benefits. A pilot programme initiated by the US
Large corporations are increasingly focusing on Department of Energy as part of its Better Plants
energy efficiency along their supply chains to cut programme shows how government initiatives,
costs and support environmental objectives. The programmes and support can give corporations
supply chain is the production and distribution incentives to work with their supply chains on
network that encompasses the sourcing, energy efficiency.
manufacturing, transportation, commercialisation,
distribution, consumption and disposal of goods.
IKEA achieves a 25% improvement in its
Providing energy efficiency training, resources supply chains
and support to companies in supply chains can
provide benefits to SMEs in the supply chain and In October 2008, IKEA started the Supplier Energy
to corporations. Supply chain energy efficiency Efficiency Program (SEEP) to engage its most
programmes can lead to cost savings both for energy-intensive suppliers in order to discover
suppliers and corporations; they can reduce supply potential energy efficiency improvements. IKEA
cost inflation; make supply chains more resilient and started with around 100 suppliers to determine
competitive; reduce risk; and improve relationships actual energy use, as well as the potential for
between producers and suppliers. Corporations improvement. With the support of IKEA, the
seeking to reduce greenhouse gas emissions suppliers have been able to save millions of dollars
often find that their direct emissions are marginal (PwC, 2012). The return on investment was very high
compared with the emissions in their supply chains in some cases, at around 750%. Generally, savings of
(Palmbeck, 2012). Studies have found that across 20% to 40% were identified and have been achieved
industries, corporations’ direct greenhouse gas in many cases (PwC, 2012).
emissions average only 14% of their supply chain
© OECD/IEA, 2015
Currently, IKEA works with more than 1 000 home

emissions (Matthews et al., 2008).
furnishing suppliers to reduce their energy use.
Supply chain initiatives taken by three corporations These efforts contribute to the company’s overall
– IKEA, a home furnishing company; Walmart, a environmental objectives, while saving money
general retailer; and Johnson Controls, an energy for their customers, suppliers and the company

itself. IKEA has developed a sustainable supplier Walmart improves energy performance of
index that covers energy management, energy- its supply chain in China
efficient production, renewable energy and raw
materials efficiency. In 2014, suppliers achieved a Building on the success of its US supplier energy
25% improvement compared with 2013 (IKEA, 2014). efficiency programme, Walmart has since
Working with a glassware company in China led implemented an energy efficiency programme
to improvements in product quality of 80% and in its supply chain in China, resulting in a 20%
reductions in product costs of 13% (Willoughby energy reduction in more than 200 factories and
et al., 2011). USD 279 million savings in energy costs (Goldberg
et al., 2012). To adapt the programme to the Chinese
business environment and the needs of Chinese
Johnson Controls shares experience to cut
SMEs, Walmart organised a launch meeting and
supply chain energy demand training sessions, and developed approaches to
Johnson Controls has developed a programme that connect suppliers with energy service companies.
sends energy efficiency experts to supplier plants Programme experience indicates that SME
to train staff on low-cost/no-cost energy efficiency managers in China typically do not have a strong
best practices. Their pilot supplier efficiency energy or efficiency background. Providing insight
programme was announced at an annual supplier and resources through training, call-in lines and
conference in 2013 and offered to all interested tools can help build capacity.
suppliers. As suppliers participated in on-site Under its supplier energy efficiency programme,
assessments, Johnson Controls was able to share Walmart covers the cost of energy audits if the
information on energy management processes and energy efficiency opportunities identified through
tools with its suppliers, while identifying potential these audits are implemented (Goldberg et al.,
improvement measures for its suppliers and making 2012). After a piloting phase involving 40 factories
preliminary estimates of project costs and benefits. in China in 2014, Walmart announced that it will
By surveying suppliers, Johnson Controls could strengthen its supply chain energy efficiency work
identify knowledge gaps and provide specific in China, aiming to engage suppliers representing
training opportunities tailored to their needs (US 70% of Walmart’s business sourced in China
DoE, 2015). (covering approximately 500 enterprises) in its
The supplier training follows an industry practice energy efficiency programme by the end of 2017
known as “energy hunts,” which Johnson Controls (Clancy, 2014).
has used at its own manufacturing plants around
the world. Suppliers participating in the programme Government programmes can provide
typically achieve energy savings of 5% to 10%, strong incentives
with a payback period of less than two years (US
DoE, 2015). Development of a standard, scalable Governments can play an important role in
programme that provides SME suppliers with providing initial incentives for corporations to
energy management tools, training and on-site work with energy efficiency in their supply chains.
technical assistance enables the company to The US Department of Energy’s (DoE) Better
© OECD/IEA, 2015
effectively expand the programme. In 2015, the Plants programme is a partnership consisting
programme was scaled up to support 60 additional of more than 160 companies, which represent
suppliers over the following three years as part of a over 2 300 facilities and almost 11% of the total
“Commitment to Action” under the Clinton Global US manufacturing energy footprint. Leading
Initiative (US DoE, 2015). manufacturers and industrial-scale energy-using
organisations demonstrate their commitment

to improving energy performance by signing zz average payback period for identified
a voluntary pledge to reduce their energy recommendations is less than one year
intensity by 25% over a ten-year period. To help (Defontaine, 2015).
manufacturers make energy efficiency more visible
in their supply chains, the programme is working
Other stakeholders can also play an
with a select group of Better Plants partners
to extend and promote the benefits of energy important role
efficiency to suppliers. The contribution that other stakeholders can make
Better Plants partners who participate in the has been demonstrated by CDP (formerly Carbon
supply chain pilot receive DoE recognition Disclosure Project), an independent, not-for-profit
for their leadership in improving supply chain organisation working to reduce GHG emissions and
energy efficiency. The pilot allows partners to promote sustainable water use by businesses and
engage suppliers in an established, national cities. It provides a platform for companies and cities
programme that offers clear goals, technical around the world to measure, disclose, manage and
assistance (such as a DoE technical account share environmental information. CDP runs a supply
manager who is available for individual coaching), chain programme in which companies disclose
and methods for data collection and tracking information on the impact of their supply chain
progress. DoE helps partners and their suppliers (Goldberg et al., 2012).
to improve energy efficiency through a series The objective of the CDP supply chain programme
of energy management webinars, access to is to better understand how global businesses
energy-saving tools and calculators, energy are managing climate risks and how they are
audits, and opportunities to network and learn positioned to exploit opportunities – and to
from peers. Legrand North America and United encourage both purchasing companies and their
Technologies Corporation have taken a leading suppliers to take action (CDP, 2015). The 2014 supply
role in piloting the programme and reaching out chain programme involved 66 companies with
to their suppliers. A key part of the programme is USD 1.3 trillion in procurement spending (CDP,
the provision of free energy audits for qualifying 2015). In 2015 there were 75 supply chain members
suppliers. These are undertaken by Industrial representing over USD 2 trillion. Participating
Assessment Centres (IACs). An evaluation of the corporations receive performance scores and a
two initial cohorts in the programme revealed the leadership index for SME suppliers and corporations
following results: to recognise achievements.
zz 13 suppliers have set goals to improve energy
efficiency by 25% over ten years Lessons from supply chain projects
zz Nine have submitted annual reports Lessons learned from working to improve energy
efficiency within supply chains:
zz 11 have conducted IAC assessments
zz A clear value proposition is needed. For
zz total savings identified by IACs are close to
corporations that engage with their supply
USD 1.2 million
chain, the starting point is to show the
© OECD/IEA, 2015
zz average savings per plant are about USD 120 000 potential benefits to supplier companies, such
as improved competitiveness, productivity,
zz average savings equal about 13% of plant-wide business relationships and resilience, and lower
energy use energy costs.

zz Sharing of best practices helps SMEs engage.
Sharing of best practices, case studies and
technical resources helps to engage supply
chain SMEs. This should be followed with
the provision of support and training for the
implementation of energy management systems
and energy audits, engaging employees in smart
low-cost/no-cost operations and maintenance
improvements, as well as larger capital projects.
zz Recommendations are not enough. Technical

recommendations should be connected with
project financing and with energy efficiency
programmes run by governments, utilities or
development banks that offer technical support,
financial incentives and recognition.
Conclusions
Supply chain energy efficiency programmes are a
promising approach that could achieve significant
improvements with limited public resources, but are
still in an early phase. Supply chain programmes can
be an effective way to stimulate and support SMEs
to work continuously with energy efficiency as part
of their customer strategy. Involving corporations
may help to motivate and scale up SME energy
efficiency projects. Supply chain programmes
can further offer governments and stakeholders
an effective way of reaching SMEs, a notoriously
difficult policy target because of the large number
of small businesses and their diverse nature.
There is a growing interest from corporations in

improving the sustainability of their supply chains as
a strategy to reduce costs, limit risks and contribute
to a positive public image. Governments can play
zz Incentives and clear criteria help. Using an important role in accelerating the engagement
purchasing companies’ purchasing power to of corporations with their supply chains on energy
encourage action and provide recognition or efficiency by providing incentives. Supply chain
rewards for achievements, such as preferential efficiency offers a way of aggregating energy
© OECD/IEA, 2015
contracting arrangements, can be an effective efficiency project financing. However, this is still an
approach. However, it is important to provide area that lacks developed financial products.
clear procurement criteria and to avoid
overburdening suppliers with reporting
requirements.

Conclusions
Accelerating the implementation of energy However, the large potential for energy efficiency
efficiency measures by SMEs could lead to in the sector will not be realised without support
substantial energy savings. It could also generate programmes that target SMEs. This Policy Pathway
significant economic benefits, by improving SMEs’ shows how governments, industry associations,
productivity, competitiveness and resilience, as financial institutions and other stakeholders can
well as wider social and environmental benefits. develop and implement effective programmes.
Better engagement with SMEs

Engaging SMEs in energy efficiency programmes Building on existing communication channels can
requires a good understanding of SMEs’ constraints reduce the resources needed for engagement
and their needs. National governments may not and information delivery. For communication
always be best placed to reach out to SMEs directly, to be effective, it needs to be in language that
but they can provide incentives and support to is understandable for general managers; overly
other stakeholders, such as industry associations, technical language may not raise interest. Effective
to work directly with SMEs. Working with regional engagement also relies on presenting a good
networks, industry associations or other entities business case for energy efficiency, by focusing on
that SMEs trust and consider authoritative can aspects that are of interest for managers such as
also improve programme participation. Local profitability, risk mitigation and product quality.
governments may be better placed to work more Once SMEs are engaged, programmes need to make
directly with SMEs than central governments due it as easy as possible for SMEs to participate and
to their proximity and better insights into local obtain support.
business conditions.
Capacity building is important for SMEs and their partners

Capacity building for SMEs should be an integral part The competence of auditors and the quality of
of energy efficiency programmes. However, other audits, quick checks or walk-throughs is essential for
stakeholders such as government staff, business ensuring industry participation and implementation
associations, auditors and financial institutions also of recommendations. Audits that are perceived by
need capacity building to enable them to provide SMEs as being of low quality can dissuade companies
support and services needed to help SMEs. Staff or from participating in the programme and future
partners working on energy efficiency programmes energy efficiency programmes. Capacity building
may benefit from capacity building to help them of local banks can have far-reaching effects in
better understand and meet the needs of SMEs. counteracting barriers to access to finance.
Cost-effectiveness is possible
The costs of implementing (or administering) use of existing resources or replication of successful
© OECD/IEA, 2015
energy efficiency programmes that target SMEs models can help to ensure cost-effectiveness.
are higher than those for large enterprises because Developing programme elements relevant for
of the large number of SMEs spread over many a large number of industrial segments is a key
industrial sectors, with smaller energy savings per challenge (e.g. a cheese factory is very different
entity. However, careful planning, partnering, and from a steel rolling mill in terms of processes).

Solutions include focusing on particular industrial achieve significant results at low cost. Adding
segments or clusters, developing industry-specific an energy efficiency component to existing
guidance documents or focusing primarily on business development, innovation or other types
improving support processes that are similar across of programmes can be a cost-effective way of
industry segments. A large share of energy is used improving energy efficiency in SMEs, as can the
for support processes such as lighting, heating and provision of additional support to enable SMEs to
cooling, which are similar across SMEs. This opens participate in existing programmes targeting large
up possibilities for standardised solutions, which enterprises.
can help improve cost-effectiveness.
Approaches and resources used in past or existing
Using existing channels of communication can energy efficiency programmes targeting SMEs can be
further help cut costs. Partnerships can help expand used or replicated in other programmes. Surveying
a programme’s resources. Providing incentives for current and historic domestic policies, as well as
other stakeholders such as business associations international experiences, can save time, effort and
or corporations to work more actively with SME costs in the design of programmes for SMEs.
energy efficiency can enable governments to
Getting better data

When working with the SME sector, all programmes guidance and insights. Existing data sources can
will encounter a lack of data. Integrating data show the magnitude of energy savings that can
collection into programme objectives and be achieved in various sub-sectors or the types of
mechanisms will contribute to an improved energy efficiency measures that can be adapted to
understanding of the sector, which will help to local circumstances. Increased efforts in the area
further develop programmes and initiatives. will also help generate an interest in and funding
All countries have at least some existing data for programmes. Data collection efforts should
sources that can be used to estimate energy be based around information that is useful and
demand, potentials and the value of other valuable to SMEs, and opportunities to help SMEs
benefits. Reviewing calculations and programme develop better capabilities to measure, assess and
evaluations from other jurisdictions can provide verify data should be utilised.
Monitoring and evaluation are essential

Monitoring and evaluation are essential steps to Further evaluation of which programme elements
enable improvements and to report on progress are the most effective would greatly improve future
and results. Well-designed and well-conducted SME programmes. Currently, not every programme
evaluations can facilitate access to further funding is evaluated, and some that are evaluated opt not
and enable programme continuation or expansion. to publish the results. Initiatives aimed at sharing
Optimally, evaluations include a quantitative experiences between programme designers and
assessment of energy savings, monetary savings general managers would further facilitate the
© OECD/IEA, 2015
and the value of other benefits. Furthermore, development of effective programmes.

it is important that the evaluation includes the
qualitative identification of the key programme
success factors. Reporting requirements should be
built into the programme and issues concerning
confidentiality need to be dealt with.

Need to scale up
Finally, there is a need to expand and scale up When scaling up, it is vital to build on lessons both
SME programmes so that the benefits of energy from national programmes and programmes in
efficiency improvement become more widespread. other countries. It makes sense to build on existing
This will require greater understanding of and initiatives, replicate successful programme elements
confidence in the potential benefits; better and develop standardised approaches that reduce
programme evaluations to reveal what works; resource requirements.
more skilled personnel to design and implement
programmes; and resources to support the
implementation of programmes so that they can
deliver on their potential.
© OECD/IEA, 2015

o ok shop
e b
/ b o o ks PD
g
in
or
Fv
Onl
er s
.
y Agency
iea
erg
io n
En
s at 2
l
Internationa
w w.
To ge t her
0% dis
w
E-mai
le
c
ab
ta
in o u
l: bo
S e c u re Sus
nt
oks
@
iea
. or
g
Energy
Policies
Energy of IEA
Technology Countries
World
Perspectives series
Energy
series Outlook
series
© OECD/IEA, 2015
Energy
Oil
Statistics
series
Energy Medium-
Policies Term Market Renewable
Reports Energy
Beyond IEA Energy
Efficiency
Countries series
Coal Market
series
Gas Report
Abbreviations and acronyms
AP Govt Andhra Pradesh Government OECD Organisation for Economic

BAFA German Federal Office for Economic Affairs Co-operation and Development
and Export Control PSEE Private Sector Energy Efficiency
BEE Bureau of Energy Efficiency R&D Research and development
CAGR Compound annual growth rate SBI State Bank of India
CHUEE China Utility-Based Energy Efficiency SCLAA Supply Chain and Logistics
Finance Program Association of Australia
DECC UK Department of Energy SEAI Sustainable Energy Authority of Ireland
and Climate Change SEEP Supplier Energy Efficiency Program
DoE Department of Energy SEFF Sustainable Energy Financing Facility
EBRD European Bank for Reconstruction SEP Superior Energy Performance,
and Development US Programme
ECCJ Energy Conservation Center, Japan SIDBI Small Industries Development
ECF European Climate Foundation Bank of India
EEIG Energy Efficiency Information Grants SIDO Small Industries Development Organization
EEN Energy Efficiency Network SME Small and medium-sized enterprises
EJ Exajoules SPT Sustainable Energy Policy and Technology
EMAK Energy Management Action Network UKEEP Ukraine Energy Efficiency Programme
ESCO Energy service company UNEP United Nations Environment Programme
EST Energy Saving Trust UNIDO United Nations Industrial
ETO Energy Trust of Oregon Development Organization
GDP Gross domestic product WB - GEF World Bank Group’s Global
Environment Facility
GEF Global Environment Facility
GHG Greenhouse gas
GSEP Global Superior Energy
Performance Partnership
IAC Industrial Assessment Centres
IFC International Finance Corporation
IPEEC International Partnership for Energy
Efficiency Cooperation
ITC International Trade Centre
KyrSEFF Kyrgyz Sustainable Energy
Financing Facility
NSIC National Small Industries Corporation
© OECD/IEA, 2015
METI Ministry of Economy, Trade and Industry

in Japan
NABARD National Bank for Agriculture
and Rural Development
NBI National Business Initiative

References
Akman, U., E. Okay and N. Okay (2013), “Current EBRD (2014c), TURSEFF: Turkish Sustainable Energy
snapshot of the Turkish ESCO market”, Energy Policy, Finance Facility, EBRD, London, www.ebrd.com/
Elsevier, Amsterdam, Vol. 60, pp. 106-15. downloads/sector/sei/TURSEFF_Case_Study_
Jan_2014.pdf.
CDP (2015), Supply Chain Sustainability Revealed: A
Country Comparison, Supply Chain Report 2014 – 2015, EBRD (2014d), The EBRD’s Experience with Policy
www.cdp.net/CDPResults/CDP-Supply-Chain- Dialogue in Ukraine: Case Study – Energy Efficiency,
Report-2015.pdf. EBRD, London, www.ebrd.com/downloads/about/
evaluation/1405PDEE.pdf.
Clancy, H. (2014), “Walmart Extends Energy Efficiency
Focus to Chinese Suppliers”, Forbes, 29 August, 2014, EBRD (2014e), Energy Efficiency Solutions for SMEs in
www.forbes.com/sites/heatherclancy/2014/08/29/ Kyrgyzstan, information brochure, February 2014.
walmart-extends-energy-efficiency-focus-to-
chinese-suppliers/. ECCJ (Energy Conservation Center, Japan)
(2014), “Energy Efficiency in Small and Medium
Connolly, E., D. Norman and T. West (2012), Small Manufacturing Businesses in Japan: Subsidized
Business: An Economic Overview, Small Business Energy Audit in Japan”, presentation by N.
Finance Roundtable, Reserve Bank of Australia, Kitagawa at the conference Energy Efficiency
www.rba.gov.au/publications/workshops/other/ in Manufacturing SMEs: Sharing Australian
small-bus-fin-roundtable-2012/pdf/01-overview.pdf. and International Experience in Policy and
Program Design, Sydney, www.iea.org/media/
Crittenden, P. (2013), “The energy management workshops/2014/eeu/industry/Mr.NiroKitagawa.pdf.
practices of designated consumers in Mongolia”,
prepared for the GIZ Energy Efficiency in the Grid Edinburgh Group (2013), Growing the Global
Connected Supply program with support from Economy through SMEs, www.edinburgh-group.
Ulaanbaatar University. org/media/2776/edinburgh_group_research_-_
growing_the_global_economy_through_smes.pdf.
DECC (UK Department of Energy and Climate
Change) (2014), Research to Assess the Barriers and EFILWC (2013), Restructuring in SMEs in Europe,
Drivers to Energy Efficiency in Small and Medium Sized European Foundation for the Improvement of Living
Enterprises, www.gov.uk/government/uploads/ and Working Conditions, Dublin, www.eurofound.
system/uploads/attachment_data/file/392908/ europa.eu/publications/report/2013/labour-market-
Barriers_to_Energy_Efficiency_FINAL_2014-12-10.pdf. business/restructuring-in-smes-in-europe.
de Kok, J., et al.(2011), “Do SMEs Create More and Ernedal, S. and E. Gombosuren (2011), “On a path
Better Jobs?”, EIM Business and Policy Research, towards an energy efficiency policy framework
Zoetermeer. – the case of Mongolia”, paper presented to the
ECEEE 2011 Summer Study, Energy Efficiency
EBRD (European Bank for Reconstruction and First: The foundation of a low-carbon society,
Development) (2014a), Bulgaria: 10 Years of EBRD European Council for an Energy Efficient Economy,
Sustainable Energy Financing Facilities, EBRD, London, Stockholm, http://proceedings.eceee.org/papers/
www.ebrd.com/downloads/sector/eecc/seff- proceedings2011/2-229_Ernedal.pdf.
bulgaria.pdf.
© OECD/IEA, 2015
EBRD (2014b), Sustainable energy financing facilities:

Innovative products for businesses and home owners,
EBRD, London, www.ebrd.com/downloads/sector/
eecc/sei-seff.pdf.

Eurochambres (Association of European Chambers Gruber, E., et al. (2011), “Efficiency of an energy
of Commerce and Industry) (2014), Smart energy for audit programme for SMEs in Germany – results
growth: SME actions on energy efficiency powered by of an evaluation study”, paper presented to the
Chambers of Commerce and Industry, Eurochambres, ECEEE 2011 Summer Study, Energy Efficiency First:
Brussels, www.eurochambres.eu/Objects/3/Files/ The foundation of a low-carbon society, ECEEE,
EUROCHAMBRES_Brochure_Smart_Energy_For_ Stockholm, http://proceedings.eceee.org/papers/
Growth.pdf. proceedings2011/3-112_Gruber.pdf.
European Commission (2014a), A Partial and HKEIA (2014), “A Support Programme for SMEs
Fragile Recovery: Annual Report on European SMEs to Adopt the ISO 50001 Energy Management
2013/2014, European Commission, Brussels, http:// System Standard”, Hong Kong Electronic Industries
ec.europa.eu/growth/smes/business-friendly- Association, Hong Kong, www.hkeia.org/iso50001/
environment/performance-review/files/supporting- psummary.html.
documents/2014/annual-report-smes-2014_en.pdf.
IEA (2012), Energy Management Programmes
European Commission (2014b), Progress Report on for Industry: Gaining Through Saving. IEA/
Energy Efficiency in the European Union, European OECD Publishing, Paris, www.iea.org/
Commission, Brussels, https://ec.europa.eu/energy/ publications/freepublications/publication/
sites/ener/files/documents/swd-2013-541.pdf. policypathwaysindustry.pdf.
Fleiter, T., et al. (2012), “The German energy audit IEA (2014a), Energy Efficiency Market Report 2014, IEA/
program for firms – a cost-effective way to improve OECD Publishing, Paris.
energy efficiency?”, Energy Efficiency, Vol. 5, Issue 4,
Springer, Berlin, pp. 447–469. IEA (2014b), Capturing the Multiple Benefits of Energy
Efficiency: A Guide to Quantifying the Value Added,
Fuller, M., et al. (2010), Driving Demand for Home IEA/OECD Publishing, Paris. DOI: http://dx.doi.
Energy Improvements, Lawrence Berkeley National org/10.1787/9789264220720-en.
Laboratory, Berkeley, http://drivingdemand.lbl.gov/
reports/lbnl-3960e-print.pdf. IEA (2014c), Regional Energy Efficiency Policy
Recommendations – Arab-Southern and
GasNatural Fenosa (2015), 8ª Edición del Estudio Eastern Mediterranean (SEMED) Region, IEA/
de Eficiencia Energética en las Pymes, GasNatural OECD Publishing, Paris, www.iea.org/
Fenosa, Barcelona, www.gasnaturalfenosa. publications/freepublications/publication/
com/servlet/ficheros/1297147095827/ RegionalEnergyEfficiencyPolicyRecommendations.pdf.
IEEPResultadosNacionalesyCatalunya,1.pdf.
IEE (2013), Guidelines for the Calculation of the IEE
Global Innovation Lab for Climate Finance (2015), Common Performance Indicators, Intelligent Energy
Energy Savings Insurance, The Lab, Venice, http:// Europe, Brussels, http://ec.europa.eu/energy/
climatefinancelab.org/wp-content/uploads/2015/05/ intelligent/files/implementation/doc/guidelines-iee-
Energy-Savings-Insurance-Overview.pdf. common-performance-indicators.pdf.
Goldberg, A., et al. (2012), Promoting Energy Savings IFC (2012), Study on the Potential of Sustainable
and GHG Mitigation through Industrial Supply Chain Energy Financing for Small and Medium Enterprises
© OECD/IEA, 2015
Initiatives, Institute for Industrial Productivity and in China, International Finance Corporation,
Ecofys, London, www.ecofys.com/files/files/iip_ Washington, DC, www.ifc.org/wps/wcm/
ecofys_2012_industrial_supply_chains_initiatives.pdf. connect/39ecf5004ff94de2acc8ff23ff966f85/
China+SME+Report+for+web.pdf?MOD=AJPERES.

IFC (2014), China Utility-based Energy Efficiency Matthews, H. S., C. T. Hendrickson and C.L. Weber
Finance Program, International Finance Corporation, (2008), “The Importance of Carbon Footprint
Washington, DC, www.ifc.org/wps/wcm/ Estimation Boundaries,” Environmental Science and
connect/0f680e004a9ad992af9fff9e0dc67fc6/ Technology, Vol. 42, No. 16, American Chemical Society,
Chuee+brochure-English-A4.pdf?MOD=AJPERES. Washington, DC, pp. 5839-5842, http://pubs.acs.org/
doi/pdf/10.1021/es703112w.
IKEA (2014), IKEA 2014 Sustainability Report, Inter IKEA
Systems BV, Delft, www.ikea.com/ms/en_US/pdf/ Middlesex University (2009), Final Report for BERR
sustainability_report/sustainability_report_2014.pdf. Enterprise Directorate: SMEs in a Low Carbon Economy,
Middlesex University, London, www.mdx.ac.uk/__
IVL (2012), Utvärdering av externa företagsprojekt data/assets/pdf_file/0013/22720/SME-in-a-low-
2012 (Evaluation of External Company Projects carbon-economy.pdf.
2012), Swedish Energy Agency, Eskilstuna, www.
energimyndigheten.se/Global/F%C3%B6retag/ Mueller, S. and B. Tuncer (2013), Greening SMEs by
Energieffektivisering%20i%20f%C3%B6retag/ Enabling Access to Finance, SWITCH-Asia Network
Utv%C3%A4rdering%20externa%20 Facility, www.switch-asia.eu/fileadmin/user_upload/
f%C3%B6retagsprojekt.pdf. A2F_Study_2013_Screen-compressed.pdf.
Jue, E., B. Johnson and A. Vanamali (2012), Case NBI (2013), Boost your business with the Power
Study: Thailand’s Energy Conservation (ENCON) Fund, to Save. Plug into brighter profits with the PSEEs
Center for Clean Air Policy (CCAP), http://ccap.org/ free or subsidised energy saving services, National
assets/Thailand-Energy-Conservation-ENCON- Business Initiative, Johannesburg, www.psee.
Fund_CCAP-Oct-2012.pdf. org.za/Portals/0/Flip-books/Boost%20Your%20
Business%20With%20The%20Power%20To%20
Karlsson, M., P. Thollander and P. Rohdin (2012), Save/index.htm.
“Impact and process evaluation of the Swedish
national energy audit program for small and NBI (2015), PSE Buzz, official newsletter of the PSEE,
medium sized industries”, paper presented to the May 2015, Issue 3, National Business Initiative,
ECEEE 2012 Industrial Energy Efficiency Summer Johannesburg, www.psee.org.za/Portals/0/
Study, 2012, ECEEE, Stockholm, http://proceedings. downloads/PSEE%20Ezine_Issue%203.pdf.
eceee.org/papers/proceedings2012/1-048-12_
Karlsson_pre.pdf. Never, B. (2015), “Behave and Save? Behaviour,
energy efficiency and performance of MSEs in
Koewener, D., et al. (2014), “Energy Efficiency Uganda”, German Development Institute, Bonn.
Networks for companies – Concept, achievements
and prospects”, paper presented to the ECEEE Noda, F. (2013), The Networks for Energy Management
Industrial Energy Efficiency Summer Study, June Activity around the World, Institute of Energy
2014, ECEEE, Stockholm, http://proceedings.eceee. Economics, Japan (IEEJ), Tokyo. https://eneken.ieej.
org/papers/proceedings2011/3-325_Koewener.pdf. or.jp/data/5120.pdf.
Lund, C., et al. (2010), Report for the Long-Term OECD (2013), Economic Outlook for Southeast Asia,
Training Strategy for the Development of Energy China and India 2014: Beyond the Middle-Income
Trap, OECD Publishing, Paris, DOI: http://dx.doi.
© OECD/IEA, 2015
Efficiency Assessment Skills, report by GHD for the

Department of Resources, Energy and Tourism, org/10.1787/saeo-2014-en.
Australia.

OECD (2015), Environmental Policy Toolkit for Trianni, A. and E. Cagno (2011), “Energy Efficiency
Greening SMEs in the EU Eastern Partnership Barriers in Industrial Operations: Evidence from
countries, OECD Publishing, Paris, www.oecd.org/ the Italian SMEs Manufacturing Industry”, paper
environment/outreach/Greening-SMEs-policy- presented to the 2011 ACEEE Summer Study on
manual-eng.pdf. Energy Efficiency in Industry, American Council for
an Energy-Efficient Economy (ACEEE), Washington,
Palmbeck, E. L. (2012), “Reducing Greenhouse Gas
DC, http://aceee.org/files/proceedings/2011/data/
Emissions through Operations and Supply Chain
papers/0085-000013.pdf.
Management”, Energy Economics, Vol. 34, No. 1,
Elsevier, Amsterdam, pp. S64-S74. Trombley, D. (2014), One Small Step for Energy
Efficiency: Targeting Small and Medium-Sized
Price, L., and H. Lu (2011), “Industrial energy auditing
Manufacturers, ACEEE, Washington, DC, www.nist.
and assessments. A survey of programs around the
gov/mep/data/upload/ACEE.pdf.
world”, paper presented to the ECEEE 2011 Summer
Study, ECEEE, Stockholm, http://proceedings.eceee. US DoE (2015), “ Implementation Model:
org/papers/proceedings2011/3-049_Price.pdf. Supplier Efficiency Program”, Department
of Energy, Washington, DC, http://
PwC (2012), Driving CO2 out of the supply chain and
betterbuildingssolutioncenter.energy.gov/
off retailers’ shelves, PricewaterhouseCoopers, www.
implementation-models/supplier-efficiency-
pwc.com/en_GX/gx/retail-consumer/assets/pwc-
program.
driving-carbon-from-the-supply-chain.pdf.
Utilitywise (2014), “Small businesses missing out
SANEDI (2015), “12L EE Tax Incentive”, South
on energy savings”, www.utilitywise.com/media-
African National Energy Development Initiative,
relations/press-releases/small-businesses-missing-
Johannesburg, www.sanedi.org.za/12l-ee-tax-
energy-savings/.
incentive/.
Warren, P. (2015) Demand-Side Management Policy:
Scheer, J., and B. Motherway (2011), Economic
Mechanisms for Success and Failure, PhD Thesis,
Analysis of Residential and Small-Business Energy
University College London.
Efficiency Improvements, Sustainable Energy
Authority of Ireland, Dublin, www.seai.ie/ Willoughby S., et al.(2011). “Quantifying Non-
Publications/Statistics_Publications/Energy_ energy Benefits of a Carbon Reduction Initiative
Forecasts_for_Ireland/Economic_Analysis_of_ for a Glassware Company”, paper presented
Residential_and_Small-Business_Energy_Efficiency_ at the ECEEE 2011 Summer Study, 2011, ECEEE,
Improvements.pdf. Stockholm, http://proceedings.eceee.org/papers/
proceedings2011/3-122_Willoughby.pdf.
SME Chamber of Commerce of India (2015), “About
MSMEs in India”, SME Chamber of Commerce of Zhu, Y., X. Wittmann and M. Peng (2012) “Institution-
India, Mumbai, www.smechamberofindia.com/ based barriers to innovation in SMEs in China”,
about_msmes.aspx. Asia Pacific Journal of Management, Vol. 29, No. 4,
SME Corporation Malaysia (2015), Annual Report Springer, Berlin, pp. 1131-1142.
2013/14, www.smecorp.gov.my/vn2/node/1479.
© OECD/IEA, 2015
Thollander, P. and J. Palm (2013), An Interdisciplinary

Perspective on Barriers, Energy Audits, Energy
Management, Policies, and Programmes: Improving
Energy Efficiency in Industrial Energy Systems,
Springer-Verlag, London.

This publication reflects the views of the IEA Secretariat but does not necessarily reflect those of
individual IEA member countries. The IEA makes no representation or warranty, expressed or implied,
in respect of the publication’s contents (including its completeness or accuracy) and shall not be
responsible for any use of, or reliance on, the publication. Unless otherwise indicated, all material
presented in figures and tables is derived from IEA data and analysis.
IEA Publications
9, rue de la Fédération, 75739 Paris cedex 15
Printed in France by IEA, November 2015
The paper used has been produced respecting PEFC’s ecological, social and ethical standards
Accelerating Energy Efficiency in
small and medium-sized enterprises
The IEA Policy Pathway series aims to help policy
makers implement the IEA 25 Energy Efficiency
Policy Recommendations endorsed by the IEA
Ministers in 2011.
Small and medium-sized enterprises (SMEs) are a
central part of economies worldwide, comprising
99% of enterprises and providing about 60%
of employment. The IEA estimates that SMEs
use more than 13% of global total final energy
demand, around 74 exajoules (EJ) and that cost-
effective energy efficiency measures can save
SMEs up to 22 EJ – more energy than Japan and
Korea consume per year combined. Improvements
in energy efficiency offers considerable value for
economies, societies and SMEs themselves, but
efficiency investment is lagging because of a lack
of information, resources, technical expertise
and funding. This Policy Pathway describes how
well-designed energy efficiency programmes can
address these barriers, unlocking a wide range
of benefits. The Policy Pathway builds on lessons
learned from country experiences and provides
actionable guidance on how to plan and design,
implement, monitor and evaluate energy efficiency
programmes targeting SMEs.
www.iea.org

Accelerating Energy Efficiency

Uploaded by

Copyright:

Available Formats

Accelerating Energy Efficiency

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Accelerating Energy Efficiency

Uploaded by

Copyright:

Available Formats

Accelerating Energy

Efficiency in Small and

The IEA Policy Pathway series

Modernising Building Energy Codes – to

Improving the Fuel Economy of Road

Vehicles – A Policy Package

Energy Management Programmes for

Joint Public-Private Approaches for Energy

Efficiency Finance – Policies to Scale up

Private Sector Investment

Monitoring, Verification and Enforcement

O – Improving Compliance within Equipment

R E M Energy Efficiency Programmes

POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES 1

Realising the potential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

SME programme case studies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Launching the SEFF model in Bulgaria 56

POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES 3

4 POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES

POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES 5

(ECCJ); Mirko Krück, LEEN GmbH; Benoit Lebot,

6 POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES

POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES 7

demand, around 74 exajoules (EJ). Cost-effective goes largely unnoticed.

8 POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES

Table 1 IEA Policy Pathway: Energy efficiency programmes for SMEs

2 Consult with stakeholders

4 Engage partners and secure funding, staffing and other resources

5 Pilot the programme

IMPLEMENT 6 Launch the programme

7 Manage the implementation process

MONITOR 8 Collect, review and disseminate data

9 Evaluate programme impacts

POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES 9

10 POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES

POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES 11

12 POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES

SMEs play a central role in economies around the world

labour and capital as factors of production. Labour relations are

POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES 13

14 POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES

Benefits of improved energy efficiency for SMEs

POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES 15

16 POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES

Benefits to the economy

Table 2 Types of energy-efficient equipment, controls, software and services

Equipment Controls and software Services

equipment Lighting and daylight phasing

POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES 17

Benefits for utilities and other stakeholders

Barriers to energy efficiency improvement in SMEs

18 POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES

Challenges that programme designers and managers may face

POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES 19

Key elements of an effective programme

training and capacity building for the financial

20 POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES

Figure 1 Strategies for developing energy efficiency programmes for SMEs

Understand the Focus on multiple

POLICY PATHWAY  ACCELERATING ENERGY EFFICIENCY IN SMALL AND MEDIUM-SIZED ENTERPRISES 21

R E M Energy Efficiency Programmes

R EM Programme developers can elect to focus on