The Impact of Financial Support to SMEs to Improve Energy Efficiency: A Pan-European RCT

The EENergy project, funded by the EU’s Single Market Program (SMP), supports small and medium enterprises (SMEs) in improving energy efficiency and sustainability, contributing to the EU’s goal of achieving climate neutrality by 2050. Implemented by the Enterprise Europe Network (EEN), the program offers advisory services to 1,800 SMEs, with 900 of them receiving up to €10,000 in direct financial support. This funding is earmarked for investments in renewable technologies, energy efficiency consultancy, and employee training. Eligible SMEs must collaborate with EEN’s sustainability advisors to create tailored action plans targeting reduction in energy consumption.

2024-07-21

2026-03-31

energy efficiency, energy resilience, business performance

1. First Stage
a) Received funds from implementation partner

2. Investment and Composition of Investment:
Index of any investment
a) Any energy efficient investment
b) Any renewable investment

Index of expenditures comprising
a) Expenditure on training for EE and RE investments
b) Expenditure on capital for EE and RE investments
c) Expenditure on consulting for EE and RE investments
d) Index of type of expenditure (e.g. solar PV investment, type of EE investment such as lighting, heat capture etc.), also to be reported separately

3. Energy Use, Intensity, and Cost:

a) Total energy expenditure (logged), as well as sourcewise expenditure (heating, electricity, other)
b) Emissions intensity: log (revenue divided by energy expenditure) and log(profits divided by energy expenditure)
c) If emissions factors are available, emissions by source-wise expenditure

Downstream firm-level outcomes, satisfaction with energy advisor, and support for mitigation policies

1. Final firm outcomes:
Index comprising:
a) Total number of FTE (full-time employees)
b) Value of total capital stock
c) Employees working on sustainability-related tasks
d) Formal sustainability practices: Adoption of sustainability targets (binary); Regular monitoring of energy usage (binary); Obtaining energy performance certificates (binary); Assignment of sustainability responsibilities (binary).
e) Revenues
f) Profits


2. Intentions for future energy investments

3. Satisfaction with energy advice: index comprising

a) How closely did they follow the baseline report’s advice
b) Agreement with statement “the EEN energy spent enough time to implement suggestions from the baseline report”

4. Support for climate mitigation policy:

Index comprising agreement with the following statements:

a) Climate change will have a serious impact on the quality of life of people in the EU during my lifetime
b) Human activities are a significant cause of climate change
c) On balance, the transition to renewable energy solar from fossil fuels like coal and gas will be beneficial for the EU economy in the next 10 years
d) The E.U. government should do more to reduce greenhouse gas emissions
e) E.U companies should do more to reduce greenhouse gas emissions

The design is a two-stage randomized trial, implemented over two calls (one between Feb-May 2024, one between Dec-Feb 2025). In the first stage, firms are assigned to treatment and control (max 900 T, 900 C). As a result of the first call for funding, 1,406 firms were randomized, with 707 firms allocated to the Cash Group (50.28%) and 699 firms to the Standard Group (49.72%). The second call randomization is planned for March 2025.

Not available

Following the collection of application (baseline) data, a lottery was employed. Explored will be the comparison between SMEs that receive direct financial support of up to EUR 10k and those that “only” receive standard EEN advisory services. The randomization for the EENergy project was conducted after the eligibility checks were completed and ineligible firms were removed. The allocation of firms that applied for the first EENErgy call into the two groups — the Cash Group and the Standard Beneficiary Group — was performed on June 21st, 2024, using STATA (randtreat command).

Specifications:
1. Treatment vs control
2. Test for spillovers: compare control firms amongst high-intensity advisors with other control firms
3. Test for spillovers amongst treated firms: compare treated firms amongst high-intensity advisors with other treated firms
4. Advisor elasticity of effort, prices: regress prices, effort of advisors on high intensity dummy
Pool across calls with calls and strata dummies if specification comparable. PDS lasso to improve precision using baseline controls.
Correct for differential attrition using weighted regressions and check for differential attrition by baseline characteristics.

Main: Firm

No

Randomization is at the firm level, but we considered 62 strata of EEN advisory service providers in call 1. Additionally, we plan to control for the fact randomization occurred after two separate calls.

1,800 SMEs

Planned: 900 treatment vs. 900 control (in two calls).

Using the indicator "share of electricity produced with own renewables (e.g., solar panels)", a sample size of 1,800 firms (900 in each group), and assuming a significance level of 0.05, and a delta (expected change) of 10 percentage points between control and treatment groups (from about 21% to 31%), the resulting power for detecting an increase in the renewable indicator is 0.998.