The Greening of Small Business
by Peter GrotansThe battle cry for this millennium seems to be “Go green!” Individuals, small businesses, and even large corporations are concentrating on becoming more environmentally friendly. But going green is more than just a trend that promotes environmentally friendly business practices—it can also have an impact on the bottom line—especially for small businesses. Consider the following statistics from GreenBiz.com, a Web site that helps companies align environmental responsibility with business success.
- Small businesses (less than 500 employees) employ half of the private sector workforce and use half of the electricity and natural gas consumed by the commercial and industrial sectors.
- In 2006, small businesses accounted for 99.9 percent of the 27 million businesses in the country.
Given the size and influence that small businesses have on the U.S. economy, imagine the positive impact they could have by going green, and the reduced costs they could achieve.
According to the Sustainability Purchasing Network, which helps businesses integrate environmental objectives into their purchasing practices, “When organizations choose sustainable products they can also avoid costs that are hidden in the upfront costs of traditional products, but have financial implications over the long term.” For example, buying energy efficient light bulbs will save long-term energy costs even though less efficient incandescent bulbs cost less. Since small businesses are generally more susceptible to limited cash flow and changing market forces, reducing overhead over the long run, even slightly, can make all the difference.
How can small businesses take the green movement to a higher level while continuing to keep it simple and easy? The following ideas are quick and easy starting points for small businesses (and for that matter all of us) to set out on a green path.
Lighting
- Replace inefficient incandescent bulbs with Compact Fluorescent Lights (CFLs). CFLs use 75 percent less energy than regular bulbs, last 10 times as long, and generate 70 percent less heat.
- Install bi-level switching, a relatively simple and durable switching strategy that can generate 10–15 percent energy savings. With bi-level switching, each office occupant is provided with two wall switches to control their lights. In a typical installation, one switch would control 1/3 of the fluorescent lamps in the ceiling lighting system, while the other switch would control the remaining 2/3 of the lamps. This allows four possible light levels: off, 1/3, 2/3 and full.
Mechanical
- Proper insulation. An efficient building envelope allows the building owner to “right size” the heating, ventilation, and air-conditioning (HVAC) system. Because HVAC is a building’s biggest energy user, appropriately sizing the HVAC system can reduce energy costs.
- Use ENERGY STAR products. The ENERGY STAR label identifies products where large gains in energy efficiency and pollution reduction can be cost-effectively realized.
- Install a programmable thermostat. Through proper use of pre-programmed settings, a programmable thermostat can save you about 10 percent every year in energy costs.
- Water conservation. If you’re considering a remodel, be sure to install low-flow toilets and faucets. These items don’t cost much more than standard fixtures and they save thousand of gallons of water a year.
- If your office is landscaped, water only every three to five days during the summer. Watering only at night or early morning means less evaporation, which also means you need less actual watering time.
Energy tax credits
Tax incentives from the federal government are another positive aspect of the green movement. The Energy Policy Act of 2005 Section 179D; Deduction for Energy Efficient Commercial Buildings, (updated since then by IRS Notice 2006-52 and IRS Notice 2008-40), includes tax deductions for investments in “energy efficient commercial building properties” designed to significantly reduce the heating, cooling, water heating, and interior lighting energy cost of new or existing commercial buildings.
To qualify for the full deduction ($1.80 per sq. ft.), a building owner must make investments designed to reduce energy costs by at least 50 percent. A partial deduction of up to $0.60 per square foot is available if you reduce energy costs by 16 and 2/3 percent (one third of the 50 percent requirement for investments in one of three systems: lighting, heating and cooling, or building envelope). To be eligible, the building improvements must be placed in service between January 1, 2006 and December 31, 2013.
The most attainable deduction for most small business owners is the lighting density reduction. At the moment, interim rules established a deduction of $.30 per square foot for buildings (or portion of buildings) that achieve at least 25 percent lighting savings relative to the ASHRAE 90.1-2001 lighting power density (watts per sq. ft) requirements (but excluding ASHRAE’s “additional lighting power allowances”) and that also use bi-level switching. This deduction increases progressively to $.60 per square foot for using bi-level switching and achieving 40 percent lighting savings. To qualify for this deduction, a qualified individual (licensed contractor or engineer) must certify the energy saving calculations using the IRS prescribed requirements.
The benefits of going green for small businesses can be both tangible and intangible. Small businesses that have reorganized their operations to reduce energy and water usage have realized direct cost savings from these efforts. In addition to direct cost savings, imbedding sustainability into your operations helps build your brand as a business that believes in a sustainable future for all.