UK could fail to meet its climate obligations without the help of small businesses, warned the Federation of Small Businesses (FSB) in its latest report, The Price of Power: Energising small business in the next UK Carbon Plan, published on Wednesday (4 January).

The report as seen by IBTimes UK revealed the country's energy sector was currently facing an unprecedented change as it seeks to meet challenging carbon emissions targets and move towards a distributed energy system. This could be met to an extent by encouraging small firms to start generating electricity, which would not only help the UK close the carbon gap but also make the country less reliant on imported energy.

FSB's report said small businesses had a complex and varied relationship with the energy sector. While some of them were already generating energy, the proportion was very small. It pointed out that just 12% of small businesses were currently generating their own electricity, the majority of which was from solar panels, thanks to government subsidy schemes in recent years.

This proportion could be increased by introducing better incentives and fewer barriers. The report called on the government to come up with an updated Carbon Plan, including a holistic strategy for promoting microgeneration, efficiency, storage and demand response across the country's small business community. "Without this, the UK will not meet its binding carbon reduction targets," the report noted.

The FSB report further explained that microgeneration would allow small businesses to invest in solutions that work for them. This, it said would reduce their dependence on a centralised energy grid and also help reduce carbon emissions.

The report based on data collected from two separate surveys of FSB's Big Voice panel had other highlights. It found that 86% of small firms believed the UK was too reliant on imported energy with 61% saying energy is a significant cost to their business. Also, while 78% of them said they chose energy efficiency methods to save money, 70% said the decision was taken to protect the environment.

Commenting on the findings, FSB national chairman Mike Cherry said: "The UK energy sector is facing the greatest transformation since the Industrial Revolution. But the whole system for incentivising and subsidising infrastructure lacks transparency, consistency, direction and ambition. It needs a strategic overhaul.

"The Government should produce urgently an updated carbon plan, looking specifically at small businesses as an audience. Without the input of an engaged and empowered small business community, the UK risks failing to meet its binding emissions targets."