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Energy Efficiency Trends Vol. 19 Essential insight for consumers and suppliers of non-domestic energy efficiency in the U.K. June 20, 2017
Energy Efficiency Trends Vol. 19
June 20, 2017
© Bloomberg Finance L.P.2017
No portion of this document may be reproduced, scanned into an electronic system, distributed, publicly displayed or used as the basis of derivative works without the prior written consent of Bloomberg Finance L.P. For more information on terms of use, please contact [email protected]. Copyright and Disclaimer notice on page 24 applies throughout.
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The Environmental Industries Commission (EIC), founded in 1995, represents the businesses which provide the technology and services that
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Minimise Energy provides LED lighting products and services that maximise efficiencies and ROI for clients. The company delivers a
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+44 (0) 330 313 3231, [email protected] email or visit www.apcplc.com/lighting
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Energy Efficiency Trends Vol. 19
June 20, 2017
© Bloomberg Finance L.P.2017
No portion of this document may be reproduced, scanned into an electronic system, distributed, publicly displayed or used as the basis of derivative works without the prior written consent of Bloomberg Finance L.P. For more information on terms of use, please contact [email protected]. Copyright and Disclaimer notice on page 24 applies throughout.
Contents
Section 1. Introduction 1
Section 2. Executive Summary 2
2.1. Supplier trends 2
2.2. Consumer trends 3
2.3. Special feature – customer satisfaction 3
Section 3. Supplier trends 5
3.1. The order book 5
3.2. Staff numbers 6
3.3. Sale prices 6
3.4. Industry risk 7
3.5. Government Effectiveness 8
Section 4. Special feature: customer satisfaction 9
Section 5. Consumer Trends 10
5.1. Technologies and measures 10
5.2. Property types 11
5.3. Project costs 12
5.4. Project finance 12
5.5. Financial payback 13
5.6. Measurement and verification 13
5.7. Consumers not undertaking energy efficiency 14
Appendices 15
Appendix A: Methodology 15
Appendix B: Supplier respondents 16
Appendix C: Consumer respondents 17
About US __________________________________________________ 18
Contact US __________________________________________________ 19
Energy Efficiency Trends Vol. 19
June 20, 2017
© Bloomberg Finance L.P.2017
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Table of figures
Figure 1: Market Monitor – tracking industry confidence................................... 2
Figure 2: Consumers commissioning efficiency projects .................................. 3
Figure 3: Trends in orders from national customers ......................................... 5
Figure 4: Trends in orders from overseas customers ....................................... 5
Figure 5: Trends in the number of staff employed ............................................ 6
Figure 6: Trends in sale prices achieved, 3Q 2012 – 1Q 2017(e) ..................... 6
Figure 7: Key issues of concern to energy-efficiency suppliers, 1Q 2017 ......... 7
Figure 8: Trends in key issues of concern ........................................................ 7
Figure 9: Trends in industry views on energy efficiency policy ......................... 8
Figure 10: Industry views of the wider economy’s management ...................... 8
Figure 11: Respondent assessment of supplier performance across different process steps .................................................................................................... 9
Figure 12: Respondent assessment of supplier performance by technology ..... 9
Figure 13: Responses on overall supplier performance ..................................... 9
Figure 14: Uptake of energy efficiency technologies, 1Q 2017 versus four-quarter average ............................................................................................... 10
Figure 15: Trends in top technologies for consumer uptake ........................... 10
Figure 16: Breakdown of commissioned projects by property type, 1Q 2017 .. 11
Figure 17: Trends of commissioned projects by property type ........................ 11
Figure 18: Trends in capital costs ................................................................... 12
Figure 19: Trends in finance models .............................................................. 12
Figure 20: Trends in expected payback periods ............................................. 13
Figure 21: Trends in the use of good practice M&V ........................................ 13
Figure 22: Consumer reasons for lack of efficiency uptake, 3Q 2016 versus four-quarter average ....................................................................................... 14
Figure 23: Who completed the survey? 1Q 2017 ............................................ 15
Figure 24: Breakdown of respondents by supplier type, 1Q 2017 ................... 16
Figure 25: Supplier respondents’ organisation size (no. of employees), 1Q 2017 ................................................................................................................ 16
Figure 26: Consumer respondents by sector, 1Q 2017 .................................. 17
Figure 27: Consumer respondents’ organisation size (no. of employees), 1Q 2017 ................................................................................................................ 17
Energy Efficiency Trends Vol. 19
June 20, 2017
© Bloomberg Finance L.P.2017
No portion of this document may be reproduced, scanned into an electronic system, distributed, publicly displayed or used as the basis of derivative works without the prior written consent of Bloomberg Finance L.P. For more information on terms of use, please contact [email protected]. Copyright and Disclaimer notice on page 24 applies throughout. 1
Section 1. Introduction
Welcome to the latest edition of U.K. Energy Efficiency Trends, the leading source of market
insight for the energy efficiency sector. As well as reporting consumer and supplier trends from for
the first quarter of 2017 this edition also includes a special feature on ‘customer
satisfaction’ (see page 9).
Looking at the results of the satisfaction survey, we are very pleased to report that customer
feedback on supplier performance was almost universally positive. Customers appear to be
particularly satisfied with the energy saving technologies and services that U.K. suppliers are
offering (and successfully installing). But in challenging economic times customers are also
looking for good value-for-money and this is something suppliers will want to be mindful of when
looking at these results. Overall, however, it was a very strong outcome for energy efficiency
suppliers, so well done to them.
In an upbeat report generally, other positive points to highlight include increasing levels of
supplier confidence on the back of sustained and increasing orders; and on the eve of the U.K.
General Election we even saw an uptick in ‘support’ (in truth, less negativity) towards Government
action, perhaps in response to the BEIS Industrial Strategy consultation and the commitment to
energy efficiency therein.
A final reason to be cheerful midway through 2017 is that consumers reported increased
spending – suggesting that energy efficiency is now a bona fide growth sector within the U.K.
economy. It will, however, be very interesting to see what changes following the June election
results and as the Brexit negotiations begin in earnest. As ever, watch this space!
Tom Rowlands-Rees
Bloomberg New Energy
Finance
Ian Jeffries
EEVS Insight
53% Suppliers reporting an
increase in domestic orders
52% Consumers ‘very satisfied’ or
better with energy efficiency
services
£260,000 Median reported energy
efficiency project size
Energy Efficiency Trends Vol. 19
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Section 2. Executive Summary
The EEVS/Bloomberg Energy Efficiency Trends Survey (Vol.19) was completed
by 70 U.K.-based respondents (26 consumer organisations and 44 suppliers),
between April 10 and May 19, 2017. Their answers relate to the situation in the
first quarter of 2017.
2.1. Supplier trends
Figure 1: Market Monitor – tracking industry confidence
Source: EEVS, BNEF. Note: based on weighted confidence indicators from Figures 3, 4, 5, 6, and
9. Zero represents neutrality.
• Increasing levels of confidence continued this quarter, pushing the EEVS/Bloomberg Market
Monitor (see Fig.1 below) into clear positive territory and, looking ahead, on an upward
trajectory.
• The sector’s positive outlook appears to reflect further increases in order-book growth, allied
with increased consumer spending (see consumer section below). In 1Q, eight out of ten
suppliers reported that order levels are either remaining stable or are increasing, and this
optimism is carried forward to suppliers’ future growth projections. By contrast, orders from
overseas have seen little material change, with no clear growth (or decline) in business
activity outside U.K. borders.
• Staffing remained largely flat overall. However, there is a mixed picture looking at the sector
in more detail; 34% of suppliers reported staff increases, 14% are still reporting headcount
reductions.
• The sector’s view on Government action remains negative, with over half of suppliers
considering energy efficiency policy to be ineffective. However, this negative sentiment has
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Positive sentiment(max = 500 points)
Negative sentiment(min = -500 points)
Energy Efficiency Trends Vol. 19
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softened over the last six months and, if this mini trend continues, the Government could
enjoy cautious support for energy efficiency policy in six months’ time.
2.2. Consumer trends
Figure 2: Consumers commissioning efficiency projects
Source: EEVS, BNEF. Note: shows the proportion of respondents who have commissioned (or
plan to commission) projects in a given quarter.
• High Efficiency Lighting remains the lead technology and was incorporated within seven out
of ten consumer investments. However, this quarter also saw a sharp and atypical rise in
smart metering and cooling/air conditioning technologies. By contrast, BEMS, behaviour
change and solar PV projects all saw material declines on typical uptake levels.
• Consumer spending ticked up again this quarter -- median project values edged to a new
high of 260 thousand pounds per project (against 50-100 thousand pounds when the survey
began in 2012). Alongside positive supplier feedback (see above), this suggests that energy
efficiency is currently a growth sector within the U.K. economy.
• Customer payback expectations softened a touch, moving out towards four years. This
quarter also saw almost 40% of consumers reporting payback expectations of five or more
years for their energy efficiency investments.
2.3. Special feature – customer satisfaction
• Customer satisfaction results were strong. All respondents were, to a greater or lesser extent,
satisfied with their supplier’s end-to-end service. Zero respondents said that they had
received an unsatisfactory or poor level of service from a U.K. supplier.
• Key insights include:
– Customers were highly positive about U.K. suppliers’ technology offering -- seven out of
ten said this was ‘very satisfactory’ or ‘superior’.
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2012 2013 2014 2015 2016 2017
Energy Efficiency Trends Vol. 19
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– Value-for-money received the lowest level of relative satisfaction, with 58% of customers
reporting that they were ‘mostly satisfied’, suggesting that more could be done by
suppliers to demonstrate value to U.K. customers. This said, Figure 14 also shows that
customers tend to think that overall costs were ‘about right’.
– Almost all respondents (81%) said that they would recommend their energy efficiency
supplier to other colleagues and organisations; four out of ten respondents reported that
they were likely to place further orders with their existing supplier on the back of previous
performance.
– Negative or unsatisfactory experiences were rare. Only 4% of customers said that they
were now less likely to work with their supplier again following their last project
experience.
Energy Efficiency Trends Vol. 19
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Section 3. Supplier trends
3.1. The order book
Figure 3: Trends in orders from national customers
Source: EEVS, BNEF. Note: the confidence indicator is an input to the market monitor in Figure 1.
Zero represents neutrality.
Figure 4: Trends in orders from overseas customers
Source: EEVS, BNEF. Note: the confidence indicator is an input to the market monitor in Figure 1.
Zero represents neutrality.
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Confidence Indicator(RH axis)
Energy Efficiency Trends Vol. 19
June 20, 2017
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3.2. Staff numbers
Figure 5: Trends in the number of staff employed
Source: EEVS, BNEF. Note: the confidence indicator is an input to the market monitor in Figure 1.
Zero represents neutrality.
3.3. Sale prices
Figure 6: Trends in sale prices achieved, 3Q 2012 – 1Q 2017(e)
Source: EEVS, BNEF. Note: the confidence indicator is an input to the market monitor in Figure 1.
Zero represents neutrality.
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Confidence Indicator(RH axis)
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Fall significantly
Fall slightly
Remain constant
Increase slightly
Increase significantly
Confidence Indicator(RH axis)
Energy Efficiency Trends Vol. 19
June 20, 2017
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3.4. Industry risk
Figure 7: Key issues of concern to energy-efficiency suppliers, 1Q 2017
Source: EEVS, BNEF. Note: each supplier respondent was asked to select their primary issue of
concern. Therefore results sum to 100%.
Figure 8: Trends in key issues of concern
Source: EEVS, BNEF. Note: each supplier respondent was asked to select their primary issue of
concern, therefore results sum to 100% in each period.
Customer demand43%
Subsidy/policy uncertainty
11%
National competition 11%
Raising finance9%
Pressure to reduce costs5%
Regulation5%
International competition
5%
Staff costs2%
Other 9%
Customer demand
Subsidy/policy uncertainty
National competition
Raising finance
Pressure to reduce costs
Regulation
International competition
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2012 2013 2014 2015 2016 17
Other
International competition
Regulation
Pressure to reduce costs
Raising finance
National competition
Subsidy/policy uncertainty
Customer demand
Energy Efficiency Trends Vol. 19
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3.5. Government Effectiveness
Figure 9: Trends in industry views on energy efficiency policy
Source: EEVS, BNEF. Note: the confidence indicator is an input to the market monitor in Figure 1.
Zero represents neutrality.
Figure 10: Industry views of the wider economy’s management
Source: EEVS, BNEF. Note: CI = confidence indicator. The dotted line represents the CI from
Figure 9, which is overlaid here for comparison with views on the wider economy. Zero represents
neutrality.
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Very ineffective
Ineffective
Neutral
Effective
Very effective
Confidence Indicator(RH axis)
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Very ineffective
Ineffective
Neutral
Effective
Very effective
Confidence Indicator(RH axis)
Energy Efficiency CI(RH axis)
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Section 4. Special feature: customer satisfaction
Figure 11: Respondent assessment of supplier performance
across different process steps
Figure 12: Respondent assessment of supplier performance
by technology
Source: EEVS, BNEF Source: EEVS, BNEF
Figure 13: Responses on overall supplier performance
Source: EEVS, BNEF
0% 50% 100%
Technology (or service)quality
Purchase experience &customer service
Installation/commissioning
Value for money
After purchase service
Superior Very satisfactory Mostly satisfactory
0% 50% 100%
Overall
Lighting - high efficiency
Building energymanagement system
Power management
Superior Very satisfactory Mostly satisfactory
0% 50% 100%
What is the likelihood of your organization working
with the same supplier again?
Do you think the project represented good value
for money?
Would you recommend the supplier to colleagues
and contacts in the sector?
More likely About the sameLess likely
Exce
ptio
na
l va
lue
Good value (about right)
Yes No
Did
no
t an
sw
er
Energy Efficiency Trends Vol. 19
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Section 5. Consumer Trends
5.1. Technologies and measures
Figure 14: Uptake of energy efficiency technologies, 1Q 2017 versus four-quarter average
Source: EEVS, BNEF. Note: ranks technologies according to the proportion of consumers who
commissioned a project in each technology out of the overall number of consumers
commissioning projects. PFC = power factor correction.
Figure 15: Trends in top technologies for consumer uptake
Source: EEVS, BNEF. Note: shows the proportion of respondents who commissioned a project in
the respective category out of the total number of respondents who commissioned a project.
Smart metering was only tracked from 4Q 2014 onward.
0% 20% 40% 60% 80% 100%
Other
Combined Heat and Power (CHP)
Heat Pumps - Ground Source
Heat Pumps - Water Source
Solar - Thermal
Optimisation - of set-points and controls
Compressed Air Equipment
Heat Exchangers
Heat Pump - Air Source
Radiant and Warm Air Heaters
Refrigeration - Optimisation
Power Management - Voltage Optimisation, Power Factor Correction
Refrigeration - High Efficiency Unit
Refrigeration - Controls
Solar - Photovoltaic
Monitoring and Targeting (M&T) / Performance Management Software
Boiler - Controls
Behaviour Change
Building Fabric - Glazing, Insulation, Materials
Energy Recovery
HVAC
High Speed Hand Dryers
Motors and Drives
Boiler - High Efficiency Unit
Boiler - Optimisation
Building Energy Management System (BEMS)
Lighting - Controls
Cooling and Air Conditioning
Smart Metering
Lighting - High Efficiency
1Q 2017
T12 average
Smart Metering
Cooling and Air Conditioning
Lighting - High Efficiency
Lighting - Controls
0%
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80%
90%
100%
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2012 2013 2014 2015 2016 2017
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5.2. Property types
Figure 16: Breakdown of commissioned projects by property type, 1Q 2017
Source: EEVS, BNEF
Figure 17: Trends of commissioned projects by property type
Source: EEVS, BNEF
Office24%
Public building
3%University
5%
Manufacturing8%
Industrial5%
Leisure Centre / Sports
5%
Hospital8%
Retail - High Street
8%
Retail - Out of Town3%
Data Centre8%
Laboratory5%
Residential3%
Warehousing and
Distribution8%
Other5%
OfficePublic buildingSchoolManufacturingLeisure Centre / SportsHospitalRetail - Out of TownData Centre
Office
Public building
School & University
Manufacturing & Industrial
Retail
Leisure Centre / Sports
Hospital
Other
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100%
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
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Other
Retail
Hospital
Leisure Centre / Sports
Manufacturing & Industrial
School & University
Public building
Office
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5.3. Project costs
Figure 18: Trends in capital costs
% projects in each band £ Thousands
Source: EEVS, BNEF. Note: the line shows the cost trend for energy efficiency projects over time
based on the estimated median.
5.4. Project finance
Figure 19: Trends in finance models
Source: EEVS, BNEF
0
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Unknown
£500K+
£100-500K
£50-100K
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<£10K
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(RH-axis)
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Supplier-arranged
Third party finance
Combination
In-house
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5.5. Financial payback
Figure 20: Trends in expected payback periods
% projects in each band Number of years
Source: EEVS, BNEF. Note: the line shows the expected payback trend for energy efficiency
projects based on the estimated median.
5.6. Measurement and verification
Figure 21: Trends in the use of good practice M&V
Source: EEVS, BNEF. Note: M&V = measurement and verification.
0
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Unknown
10 + years
5-10 years
3-5 Years
1-3 years
<1 year
Median
(RH-axis)
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Yes
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5.7. Consumers not undertaking energy efficiency
Figure 22: Consumer reasons for lack of efficiency uptake, 3Q 2016 versus four-quarter
average
Source: EEVS, BNEF. Note: respondents not commissioning projects may have cited multiple
reasons. The chart shows the proportion of respondents in each category out of overall
respondents, not commissioning projects. Results therefore do not sum to 100.
0% 20% 40% 60% 80% 100%
Other
Lack of trust in the industry
Preference for renewable energy (e.g. solar)
Subsidy uncertainty
Wider macro-economic uncertainty
Negative impact on core operations
Uncertainty over the financial benefits / business case
Lack of affordable finance
Senior management not bought in
Buildings are landlord-owned, so little upside
Lack of resource
Energy efficiency has already been undertaken
Higher priorities elsewhere
Future projects are planned
1Q 2017 (negative impact)
T12 average
1Q 2017 (industry neutral)
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Appendices
Appendix A: Methodology
The EEVS/Bloomberg Energy Efficiency Trends Survey (Vol.19) was conducted between 10 April
and May 19, 2017, and completed by 70 U.K.-based respondents (26 consumer organisations and
44 suppliers).
This is the 19th in a series of reports showing industry trends in non-residential energy efficiency.
As the report series evolves, we continue to make minor tweaks.
Initially, the report covered a broad range of European countries, but since Volume 8, it has
presented U.K.-based results only, as these consistently accounted for the bulk of data received.
In focusing the report on a single country with better data coverage, we were able to present
cleaner, more robust results. This coincided with a revamp of the analysis including – among other
modifications – the introduction of a set of time series charts.
Please reach out should you wish to discuss any of the trends observed in the charts.
Figure 23: Who completed the survey? 1Q 2017
Source: EEVS, BNEF
Consumer37%
Supplier63%
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Appendix B: Supplier respondents
Figure 24: Breakdown of respondents by supplier type, 1Q 2017
Source: EEVS, BNEF
Consultancy services36%
ESCO27%
Lighting9%
CHP5%
Finance5%
Monitoring and Targeting
5%
Building Management Systems
5%
Heat pumps2%
Boilers2%
Building fabric2%
ICT2%
Figure 25: Supplier respondents’ organisation size (no. of employees), 1Q 2017
Source: EEVS, BNEF
27%
39%
18%
5%
11%
Less than 10
10-50
51-250
251-500
501-1000
More than 1000
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Appendix C: Consumer
respondents
Figure 26: Consumer respondents by sector, 1Q 2017
Source: EEVS, BNEF
Figure 27: Consumer respondents’ organisation size (no. of employees), 1Q 2017
Source: EEVS, BNEF
Health15%
Local or Regional Authority
15%
University12%
Other4%
Retail & Wholesale, 8%
Services & Storage, 4%
Property and Real Estate, 4%
Leisure and Recreation,
4%
Manufacturing19%
Other8%
Transportation4%
Other4%
Health
Retail & Wholesale
Manufacturing
Agriculture
Other
Public / Institutional
Commercial
Industrial
Other
Agriculture
4%
11%
4%
12%
69%
Less than 50
50 - 250
251-500
501-1000
More than 1000
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About US __________________________________________________
About EEVS
EEVS is the U.K.’s leading provider of performance assurance, analysis and information services in relation
to energy efficiency. Our performance assurance services include working with clients to devise and develop
performance management systems and strategies; procurement policies and tender evaluations; due
diligence on performance contracts and guarantees; performance and financial risk analysis.
Alongside this, our established team of energy analysts provide high quality, independent Measurement and Verification (M&V) services
for all sizes and types of energy saving projects. Since 2011 we have evaluated the savings performance of hundreds of energy efficiency
projects to the global good practice standard, IPMVP. Our trusted analysis helps suppliers to credibly prove their project’s or technology’s
saving performance, whilst providing customers with much-needed certainty around their investment’s return and value for money.
EEVS wider market information and research services – in particular the Energy Efficiency Trends publications – aim to improve the
attractiveness, transparency and investability of the energy efficiency market through the provision of reliable market-level performance
and trend information. For further details about EEVS and our services, please visit www.eevs.co.uk
About Bloomberg New Energy Finance
Bloomberg New Energy Finance (BNEF) is the definitive source of insight, data and news on the
transformation of the energy sector. BNEF has staff of more than 200, based in London, New York,
Beijing, Cape Town, Hong Kong, Singapore, Munich, New Delhi, San Francisco, São Paulo, Sydney,
Tokyo, Washington D.C., and Zurich.
BNEF Insight Services provide financial, economic and policy analysis in the following industries and markets: wind, solar,
bioenergy, geothermal, hydro & marine, gas, nuclear, carbon capture and storage, energy efficiency, digital energy, energy
storage, advanced transportation, carbon markets, REC markets, power markets and water. BNEF’s Industry Intelligence Service
provides access to the world’s most comprehensive database of assets, investments, companies and equipment in the same
sectors. The BNEF News Service is the leading global news service focusing on finance, policy and economics for the same
sectors. The group also undertakes custom research on behalf of clients and runs senior-level networking events, including the
annual BNEF Summit, the premier event on the future of the energy industry.
For more information please visit about.bnef.com
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Contact US
Ian Jeffries
+44 (0) 33 0313 8488
EEVS Insight Ltd
6 Stirling Park,
Laker Road,
Rochester,
Kent
ME1 3QR
Tom Rowlands-Rees
+44 (0) 20 3525 4144
Bloomberg New Energy Finance
City Gate House,
39-45 Finsbury Square
London
EC2A 1PQ
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electronic system, distributed, publicly displayed or used as the basis of derivative works without
the prior written consent of the joint partners.
For more information on terms of use, please contact [email protected].
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responses will be treated anonymously and aggregated to form the published Energy Efficiency Trends report.
To find out more about Energy Efficiency Trends, or to download previous editions please visit our website:
www.energyefficiencytrends.com
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