The savings and energy conservation your business realizes from a well-designed upgrade should make up for any concerns about financing an energy efficient upgrade. With the government and private company help available, finding the financing shouldn’t be an issue.
For many businesses, an upgrade can produce enough positive energy savings that any outlay can be paid back simply through lower energy bills each month. When investigation how to conserve electricity while finding the money to pay for it, business owners should investigate non-traditional methods as well as the usual government programs.
Justifying the Cost
In a financial environment that’s just beginning to stabilize again, you might find it difficult to justify investing thousands of dollars into newer energy efficient upgrades for existing systems, but it’s important to keep in mind that even high end improvements will pay for themselves over time. In addition, investing in energy conservation for your business is the only way to guarantee a lower energy cost in the future, which may include rate hikes over which you have no control.
Self Financing
If you’re planning on a relatively small energy conservation upgrade, the simplest way to pay for the project is to use funds from your company savings account. Once the upgrade has been installed, calculate how much the upgrade saves your business each month to determine the amount of money to repay the savings account.
The Department of Energy
While the federal Department of Energy doesn’t give cash outright to businesses, it does offer an array of energy tax credits to lower your financial burden at the end of the year. In addition, local and state departments of energy offer multiple loan and financing programs to small businesses.
For example, in Florida the Clean Energy Investment Program offers low-interest loans to businesses, and is created to encourage the adoption of energy conservation methods and energy efficient upgrades. Check with your city and county government to access any programs to help you finance your electricity conservation investment.
PACE
PACE, or Property Assessed Clean Energy, is a governmental program designed to encourage energy conservation by financing energy efficient upgrades. Cities or counties in the program loan homeowners and business owners the funds to upgrade their systems. The loan is then paid back on a regular schedule, usually for fifteen or twenty years, by paying an increased amount on the annual property taxes.
For most users of the program, they find very little difference in actual financial outlay by banking their energy bill savings and putting it toward the tax bill. Using this method, you may even see a profit over and above the expected repayment rate, depending on how efficient your new system is.
On-Bill Financing
Although not yet available in Florida, on-bill financing is a popular concept that’s growing throughout the United States. Utility companies provide the initial funds for homeowner or commercial energy conservation improvements, in the form of a loan. This loan can then be paid back through a monthly payment on the energy bill.
While many businesses find a small increase in monthly outlay, some who have installed particularly efficient systems may end up with a zero-sum situation, with their savings equaling their additional payment, and so won’t see any change to their electrical bill at all.
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