We hear a lot these days about going green, investing in green energy, green this and green that– but what does it all really mean for businesses and how can you use it to your advantage?
It’s true that you probably can’t get your business energy completely from renewable sources at the moment, unless you have some method of generating your own green power which meets all of your needs. However, there are a lot of things you can do to help reduce your carbon footprint as well as reducing your fuel costs going forward.
Many larger companies have already committed to working towards 100% renewable energy, including Google, BMW and Unilever, to mention just a few. However, smaller businesses can also reap great benefits from making the changes now. Changing the way your business sources its energy can produce significant benefits over time but may require a fundamental alteration in its power infrastructure, with potentially considerable costs initially.
What are the business rewards of starting out on this green journey and where can you get green energy financing from?
1. Public relations
Making the changes now rather than later can be of definite benefit to your business.
Well, to begin with, as the worldwide green initiative and its publicity builds, significant kudos is beginning to be attached to those businesses who are pushing ahead and leading the field. Using renewable power now is a way to enhance your firm’s profile and reputation with clients and potential investors. It shows that you are an up-to-date and forward-thinking company, astute and forward-seeing enough to make the move while it’s a matter of choice, not legislation.
All businesses have a responsibility to reduce their carbon footprint and investing in green energy for business power supplies is a great way to reach that goal.
There have already been government carbon emission reporting and reduction initiatives in place for larger companies, which will no doubt be brought online in some form for all businesses in the foreseeable future. The government has a target to change 30% of the UK’s electricity to renewable energy by 2020 and commitment to the Kyoto Protocol for the reduction of greenhouse gasses.
Going as green as possible now while there’s relatively little pressure to do so and help with green energy funds is available will make those inevitable compulsory measures much easier to deal with.
On a financial level, setting set up to produce even just some of your needed energy will help to proof your firm against third-party energy price increases and volatile energy markets going forward. As the supplies of fossil fuels diminish, inevitably prices for supply of those fuels will increase.
Green energy users since 2010, the IKEA company has solar panels on almost all of its stores with an aim to increase that to 100% by 2020. Chief Sustainability Officer Steve Howard stated as long ago as 2012:
“We know we’re going to be using energy in 20 years’ time. If we can own our own renewable energy plants … it gives us complete price certainty. All our solar [installations] will pay back in 10 years or less and will last for 20 years.”
So, the more you can reduce your electricity grid dependency, the more secure your energy supplies will become and the more stable the ongoing costs will be.
3. Lower your energy bills
As well as helping to avoid price increases, greener power can significantly reduce your existing energy expenses.
Solar panels, wind generators and biomass boilers (which burn waste or ferment it to produce burnable methane) are all becoming more readily available every day and produce reliable, renewable energy for a fraction of the costs of fossil fuels. The more companies that take up producing their own energy, the more accessible the technology will be and the less it will cost.
Referring again to IKEA, the company’s 2015 sustainability report showed savings of £115m since 2010, due to their implementation of energy efficiency measures.
4. Green energy income
As well as reducing your own energy costs, you can also stand to make money from your renewable energy investing.
Selling your excess energy to the national grid is an opportunity not to be missed. Even small amounts build up over time and, in effect, provide free money. On a larger scale, selling to the grid can significantly help to offset the initial costs of setting up the systems.
There are various government subsidies in place for those who take up the green energy banner. These vary in their application and content, but some actually pay you an amount for every unit of electricity you produce, even if it’s your company that uses it.
Check out these:
- Feed in Tariff (FIT)
- Renewable Heat Incentive (RHI),
- Renewables Obligation (RO)
- Contracts for Differences (CfDs).
How to finance the changes?
All that sounds great but how do you finance the changes from fossil to green if you don’t have an available pot of money to invest?
Green energy finance is a growing area and sources of green energy funding are becoming more accessible.
There are several ways to get systems in place.
- The UK is keen to assist small business to go green and has implemented government grants for biomass boilers, for example.
By working with an energy solution partner who collects the RHI, your company could enjoy the use of a completely fuelled and maintained biomass boiler for a set period of time at no cost other than for the energy it produces. This fixed cost is guaranteed to be significantly lower than grid tariffs and could save up to 60% on your power outgoings.
Biomass finance is also available from independent finance companies on an individual basis.
- Green energy finance can be obtained from traditional lenders such as banks and finance companies. These sources make green energy funds available in the same way that other business assets can be funded, though repayable loans.
- Leasing green energy equipment is another option to explore. Companies which specialise in setting up asset leasing partnerships with businesses are ideal places to approach. This can be a much more cost-effective and easier route than using traditional finance methods, as it’s possible to include maintenance costs and other expenses in the repayment agreement.
Want some help?
If you’re interested in exploring the possibilities of running your company on green energy, have a look at our asset finance solutions information or contact us via the form below. We have several avenues open to you, including offering expert leasing and finance partnerships to set you off on your road to a cleaner, greener future.