Renewable Energy for Your Business (Benefits, Costs, Funding Options)
In this era of high competition and fast changes achieving business growth might sometimes be a difficult task for entrepreneurs. As an entrepreneur, you need to take every aspect of your business into consideration and study them in detail before making an investment.
It doesn’t hurt to look for ways to make your company more sustainable and save some money from your budget. There are several ways businesses can reduce their expenses and one of them is renewable energy. It is one of the latest trends in which businesses tend to invest and it has turned out to be highly rewarding.
Using renewable energy your company will not only save an essential amount of money and help its bottom line, but will also be able to attract more customers and clients.
Switching to a certain type of renewable energy does have a lot of benefits but they will take time to become tangible in a business. This means that you have to be patient and take your time with the process of conversion to renewable energy.
Benefits of Renewable Energy for Business
As already mentioned, renewable energy can be highly beneficial for your business. Some of the benefits of switching to renewable energy include:
Lower Energy Bills: Renewable energy will essentially cut down your monthly bills. You will be able to save thousands of dollars as compared to your competitors who are wasting huge amounts of money using the common energy resources such as oil or natural gas.
More Clients: The probability that a customer will choose your company over one that uses the traditional energy forms is very high. People have become more concerned about the environment nowadays and your decision to go green will make them respect you and choose you rather than a competitor.
New Jobs: You will indirectly contribute to the creation of new vacancies in the sphere of renewable energy. The industry will grow and hire more people if there is a demand for its services.
Better Connectivity: You probably lost time and clients before because of service disruptions and power outages. This is highly improbable with renewable energy as the latter is more stable and trustworthy in that respect.
Higher ROI: Due to renewable energy, you will see a huge ROI in your business within a few years. The energy bills will decrease and the investment you made initially in the process of switching to renewable energy will be paid back.
New Marketing Approaches: As the millennials become more interested in making the world a greener place, they show a higher tendency to choose companies that respect their health and the condition of the Earth. This said, you could develop new marketing approaches that target this exact audience of people and will be appealing for them.
Renewable Energy: How to Start and Which One to Choose?
The process of choosing, installing and getting your renewable energy source going might seem hard and time-consuming especially if you don’t have much knowledge in the field. However, once you start, you will see that it is actually worth your time and money.
The first steps to having your business go green are as follows:
You will need to have planning permission as this will help you know which renewable energy type is the best for your business and its surroundings.
In case there happens to be a need to make changes to your building, you will also need connection requirements.
You should carry out a site survey for choosing the best renewable energy solution for your business.
Make sure you know and have covered all the required regulatory and legal obligations.
Your installer must be MCS (Microgeneration Certification Scheme) approved. This will be a guarantee that the product and the installation are of high quality.
Keep in mind that renewable energy conversion will have the best results if you own the site where your business is or have rented it for a long-term period. The conversion to renewable energy will be especially effective if you are the owner of your business building or have rented it for a long-term period.
When it comes to renewable energy, there are a number of options to choose from. However, the choice must be done carefully and after some planning in order to have the best option for your business.
In this article, we’ll focus on wind and solar renewable energy forms:
Wind Power: If you have a large amount of land around your building then wind power could be the right choice. It uses wind to generate power. Special turbines are used for turning kinetic energy of the wind into electricity. Wind has become one of the most popular renewable energy sources used around the world. Due to its high demand, it has also become quite affordable. Moreover, the prices keep falling. The problem, though, could be the cost of turbines. They are, by far, the most expensive investment that you would have to make.
Solar Panels: Solar panels use sunlight for the generation of electricity. In terms of installation, solar panels are quite easy and flexible to manage and can easily be located on the side of your building. Solar panels are also very popular and have a high demand in the market. The costs for solar panels have also been decreasing in the last decade. You can also use solar thermal energy for water heating. Its installation process is also very simple and can easily be set up in your building. A point worth mentioning here is the fact that businesses can always choose to avoid the installation costs by purchasing energy from an energy supply company (ESCO).
Some other renewable energy sources include:
Biomass: These use organic material (straw, wood pellets, etc.) to generate heat and electricity.
Anaerobic Digestion: In this case, the source of heat and electricity becomes the methane that is gained as a result of breaking down the organic materials (plant/animal waste).
Geothermal and Ground Source Heat Pumps: This method uses the low-level heat that is in the ground naturally.
Hydroelectric Power: Hydroelectric power uses water from an immersed turbine or water wheel to create electricity.
Renewable Energy Costs and Funding Options
Let’s now have a look at the costs of renewable energy sources in more detail:
Wind Power: The turbine costs can differ depending on the size. Microturbines start from $13.000 going up to 4 million dollars for larger turbines. In case of small turbines with a power of 20-50 kW, it will take you 8-15 years to notice a tangible return, while with larger turbines that have a power of 1 MW up to 2.5 MW, you won’t have to wait that long for a payback - from 1 to 5 years.
Solar Panels: Solar panels cost from $7000 up to $13000 - this refers to small-scale systems. You will notice a payback within 6-10 years.
The costs of renewable energy technology keep falling annually because the demand is rising. Besides, there is always a second way out - you can try to gain funding for your project. There are a few funding options:
Collateralized Loans: You can find the so-called non-traditional lenders who offer collateralized asset finance. These types of loans are given for specific purposes - like buying a certain type of equipment, building project or other relevant investment.
Feed-In Tariffs: This is a specific mechanism designed to accelerate investment in renewable energy technologies. As you are using renewable energy sources, energy suppliers might be willing to pay you for the energy.
Capital Allowances: The cost of your renewable energy equipment can be written off against your taxable profit as a full 1st-year capital allowance.
Salix Funding: The government also tries to support the businesses that want to go green. Salix is a government-funded program that gives interest-free loans to companies or public sector organizations that want to switch to renewable energy.
Agreement on Power Purchase: You make an agreement with a private funder who purchases the energy. The funder will be the legal owner of the purchased system and will have the right to claim subsidy rewards. There is also a possibility to rent the system. After you pay the lease wholly (which you can do by means of the income gained from government subsidies), you will be the owner of the system.
Business Loan: You can try to take a business loan from your bank. This might be a difficult process but it will allow you to own the system eventually.
The thing to remember is that you should always consider your financial opportunities carefully so as not to stumble upon problems later. Here are a few tips to help you calculate your chances:
For starters, you need to know your electricity consumption data as well as the money spent on the usage of other energy utilities.
Identify the amount of solar/wind energy you are going to procure as compared with the amount of electricity you use. If you procure too much energy, you might be fined.
Research the market carefully and understand all the technical details of renewable energy sources. There can be possible changes in the costs, in demand charges and the ways the power is used. So, make sure you are aware of them all before signing the purchasing contract.
Next, you should decide which of the renewable energy generation options is suitable for your business - on-site or off-site. If you have available roof-property space or ground space then on-site generation could be the right choice. However, if the conditions for having an on-site generation are poor then it’s recommended to have off-site generation rather than spend money on creating better conditions.
Reduce your carbon footprint on earth, grow your business, acquire more clients and become a trustworthy company by investing in renewable energy generation!