By going green, business owners can obtain the same energy from renewables for half the cost and can avoid future rate hikes.

Earth Day Goes Corporate

When put into hard numbers, the financial benefits of a project that optimally combines solar and efficiency can seem too good to be true.

As I stood in a boardroom at a Boys & Girls Club in San Diego watching a third-grade basketball game through the window, it felt good to know the facility where those kids were playing had just been turned into an energy-neutral building. The installation had been operational for 21 days and, in turn, created the carbon sinking equivalent of planting 205 trees. Even though those children were playing in a more sustainable environment, that was not the primary reason for why this green energy project became a reality. As with most renewable energy and sustainability projects these days, the primary driving-force for implementing such a project can be summed up with one word: money.

For the Boys & Girls Club, it was simple math. The organization uses charitable donations (money) to create services and programs for local children. Less money spent on utilities equal more services and programs for even more children. And, thanks to third-party financing, the Boys & Girls Club paid nothing out of pocket for its solar efficiency project, creating a significant savings from day one. Now, every month the organization can use its savings to further assist the children of San Diego even more than it has done in the past. The primary objective wasn't just about saving the environment – it was about an organization realizing that by aligning its fiscal well being with the well-being of the environment, it can perform its core mission more effectively.

When put into hard numbers, the financial benefits of a project that optimally combines solar and efficiency can seem too good to be true. Take for example, a common commercial building of about 50,000 square feet. In Southern California, such a building on average will have a monthly electricity bill of $20,000. After incentives and credits are taken into consideration, the solar efficiency project to eliminate the bill would cost approximately $750,000. So, the total cost to supply the building with 50 years of renewable energy is less than three years of utility power. This translates into commercial projects with internal rates of return (IRR) in the neighborhood of 33 percent, or higher.

Green Industry Gains Lobbying Power
Green energy investments also provide desirable financing options. Whether a loan or a lease is preferred, a solar efficiency project can often create a 50 percent savings between payments and utility bills. In Southern California, utility companies are charging businesses twice as much for dirty energy, and steadily increasing rates up to six or seven percent year over year. By going green, business owners can obtain the same energy from renewables for half the cost and can avoid future rate hikes.

Additionally, the current green energy landscape offers more jobs and revenue. In California, the size of the solar industry has eclipsed the utility industry, and it is just now crossing the threshold where five percent of the power on the grid is made by renewables. This gives the green industry the massive lobbying power it was lacking from the early ideologically-driven environmental movements. A green industry driven by financial self-interest as opposed to moral imperative is critical, as it speaks to the ongoing power of the current green energy industry.

Since 2007, the utility industry has lost one legal battle after another in an unprecedented series of reversals. In both the state legislature and in arguments before the California Public Utilities Commission, the State of California has upheld the rights of individuals and corporations to be guaranteed predictable financial benefits if they choose to be more sustainable. At this point, in California at least, the green industry has political and economic power on its side, and the utility industry is in a full-scale retreat. This political and economic reality is crucial in creating an atmosphere conducive to the adoption of sustainable business practices.

The future looks a lot brighter as the financially driven green industry brings about the sea change that the ideologically driven green movement dreamed of but was never able to accomplish. This change is the transformation away from an expensive, non-sustainable reliance on fossil fuels to an inexpensive, sustainable deployment of renewable energy.

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