Despite Singapore’s ambitious climate goals under the Green Plan 2030, a recent survey by renewable electricity retailer Flo Energy reveals that cost savings remain the dominant factor driving electricity choices among small and medium enterprises (SMEs).
The findings highlight a persistent gap between the nation’s net-zero ambitions and SME adoption of green energy solutions. According to the “SME Renewable Energy Insights Survey” conducted by Flo Energy, nearly two-thirds (62 per cent) of SMEs in Singapore consider price the most crucial factor when selecting an electricity provider, while only 15 per cent prioritise sustainability.
Among those who switched providers, just 13 per cent cited environmental reasons, with most motivated by short-term incentives such as promotions or contract flexibility.
This trend underscores the enduring challenge of aligning SME behaviour with long-term environmental objectives. While over half of respondents acknowledged that sustainability is “quite important” to their broader business decisions, it remains a secondary factor in energy procurement.
“Singapore has a clear roadmap to reach net zero by 2050, but our research shows that many SMEs are still putting cost ahead of sustainability,” said Matthijs Guichelaar, CEO of Flo Energy. “The good news is that sustainability is increasingly seen as an area for improvement, which shows growing awareness and demand.”
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Despite nearly half (45 per cent) of SMEs considering renewable energy options, awareness of tools such as Renewable Energy Certificates (RECs) remains low. Over half of all SMEs surveyed were unfamiliar with RECs–a key mechanism for tracking and verifying the use of green power. Among those who had switched retailers, awareness was higher, indicating that education and exposure play a critical role in accelerating adoption.
High upfront costs and lack of information were cited as the most significant barriers to renewable adoption, aligning with global SME trends.
Interestingly, the survey found that once SMEs are onboarded, sustainability rises in importance. It ranked second to faster service and technical support regarding improvements SMEs wanted from their current provider, suggesting growing expectations for greener practices over time.
SMEs account for over 99 per cent of businesses in Singapore and are central to the nation’s economic and environmental future. However, as highlighted in an OECD report, smaller firms often struggle with limited resources, a lack of awareness, and difficulty navigating green incentives—all of which hamper decarbonisation efforts.
This reality presents a strategic crossroads: as Singapore pushes towards net zero by 2050, SMEs will need more support and incentives to make the green shift viable.
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Image Credit: Khanh Do on Unsplash
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