Government unveils £2m boost to help SMEs slash energy costs

12 December 2025

Small businesses across the UK will soon be eligible to apply for government funding to invest in low‑carbon upgrades, following the announcement of a £2 million initiative to boost efficiency and reduce operating expenses.

The new support, delivered through an expanded Made Smarter Adoption Programme, targets investment in technologies such as improved heating systems, insulation upgrades and on-site solar generation.

The funding forms part of the government’s formal response to the Willow Review, an independent assessment led by Small Business Britain and backed by Barclays. The review highlighted strong returns from sustainability action, noting that a significant majority of SMEs that had adopted measures such as rooftop solar or grid export reported noticeable reductions in running costs.

The programme complements wider efforts to support small companies through the transition to clean energy. Current initiatives include a hospitality sector trial providing hundreds of businesses with free energy assessments and tailored emissions-cutting advice. Early projections suggest the pilot could deliver millions of pounds in cumulative savings and reduce carbon output equivalent to several hundred transatlantic flights.

The government also points to the ongoing national rollout of smart meters for small businesses, which gives firms clearer insights into energy use and help drive down consumption.

Michelle Ovens CBE, CEO and founder of Small Business Britain, says:

“This is a strong step towards helping SMEs turn sustainability into new opportunities and better growth, benefitting not only the businesses, but also the wider economy. We look forward to continuing working with the Department for Business and Trade and the Department for Energy Security and Net Zero to ensure small businesses can fully make the most of the opportunities that sustainability brings.”