New Report on Energy Efficiency

By PlanetLaundry staff | Sep 21, 2009

A report, recently released by the National Small Business Association, shows that small business collectively could reduce greenhouse gas emissions by 259 million tons each year if they improved their energy efficiency by just 25 percent. The report, "On-Bill Financing: Helping Small Business Reduce Emissions and Energy Use While Improving Profitability," goes on to highlight the significant savings small businesses stand to achieve through on-bill financing.

On-bill financing is a mechanism that enables small businesses to work with their utility company to improve their energy efficiency. In practice, a local utility company identifies a small business with potential savings and evaluates their energy use and the company’s financial stability. The utility company then extends a low- or no-interest loan to the small business to make energy-efficient upgrades. The small-business owner repays the loan by continuing to pay the average monthly bill and any money paid in excess of what their actual costs are will go directly to pay down the loan.

Currently implemented in several states, on-bill financing programs have made thousands of loans to small businesses with unparalleled success. According to the report, energy-efficiency programs such as on-bill financing can help the average small business save $4,932 – and oftentimes more – every year on its energy bills. The report also makes recommendations on how the federal government can help facilitate additional on-bill financing programs.

The number-one reason small-business owners cite for their inability to make their firms more energy efficient is cash-flow, according to recent studies. Programs such as on-bill financing can eliminate this very significant barrier.

Energy efficiency and entrepreneurial growth can and do go hand-in-hand. The current state of the U.S. economy makes it absolutely crucial to have government policies that foster, not hinder, entrepreneurial growth. With 29.6 million small firms – comprising 99.7 percent of all U.S. employer firms – small businesses stand to make significant, positive and lasting improvements to both the economy and the environment.