Article written by Tim Mooney
The UK’s net zero sector is providing high-wage jobs, energy security, innovation, and in-demand services, driving growth during periods of economic instability, report finds.
The report from the Confederation of British Industry (CBI) suggests the UK’s net zero sector expanded 10 per cent in 2024, contributing £83bn in gross value added.
This growth is being driven by the 22,900 net zero businesses employing almost one million skilled workers in full-time jobs, about three er cent of the total workforce, with an average wage £5,600 above national average.
Most of the activity in the net zero sector comes from SMEs, taking up 98 per cent of the 22,900 registered net zero businesses. These net zero businesses cover everything from renewable energy, including solar and wind power, heat pumps and energy management, to green finance and electric vehicles.
A factor projecting UK net zero forward is domestic demand for its products and services and national targets reliant upon green technologies. For example, while heat pump sales across Europe fell 23 per cent last year, the UK bucked trends with a 63 per cent rise in heat pump sales over the same period, a likely impact of the government’s targets to install 600,000 heat pumps a year by 2028.
Commenting on the report, Vicky Wilding, Green Technologies and Services Lead at Green Economy, said:
“We’re seeing increased demand for green technologies from commercial and domestic customers, but there remains hesitance in the market. Buyers want assurances that they are investing in the right technology that won’t be outdated in 18 months by something better. And in the domestic market, green technologies are competing with a new kitchen or a holiday, so they need be confident that they’ll get a return on investment to commit. Action on green finance and subsidies would help overcome this challenge.”
“The UK government’s climate advisors are supporting a transition to green technology solutions, including heat pumps, solar panels and electric vehicles. The reality is that we do not have the skilled people to provide these installations and there isn’t a clear plan in place to resolve this problem.”
See green sector growth in action: Specialist support leads to job creation and new sales for renewable energy firm
While the UK’s net zero sector is expanding, it still faces barriers to growth and development.
Firstly, deciding on which green technologies and net zero services to back is difficult due to their nascent nature. The consequence is a market of disinformation surrounding “unproven” technologies which impacts green investments and slows the uptake of green technologies. Knowledge sharing and clearer information about the net zero products and services needed for the future will help businesses and households to make informed and sustainable decisions.
Concerns have also been raised regarding capacity. The UK isn’t able to simply switch its energy source; it needs to build necessary energy infrastructure to accommodate this. For example, blending higher levels of hydrogen into gas networks would require upgrading basic household appliances, such as boilers, cookers, and kettles, to be functional on hydrogen.
The same can be said for the cabling and energy storage solutions needed to bolster solar and wind supply. Long duration battery storage is being heralded as one of the most important future technologies as, when partnered with wind and solar farms, it can store excess energy supply and release it to the grid at later dates, avoiding energy waste and avoiding periods of over-supply.
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Finally, there’s the global stage. The UK must now battle to maintain a strong net zero stance during a period when the global green economy is taking hits, with Trump withdrawing the US, one of the world’s biggest emitters, from the Paris Agreement, and just 10 of 195 countries meeting UN climate reporting deadlines. Being a climate leader during a period of shifting priorities is a serious challenge.
While the UK net zero sector is expanding and growing at impressive rates, it still remains to be seen whether the government will commit fully to net zero policies. During a period of global economic uncertainty, the challenge of upscaling investment in net zero goods and services is both daunting but promising.
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