Some budgeting is easy. X dollars come into your small business, and Y dollars go out.
Budgeting for energy efficiency is more difficult — but worth it. By investing in energy efficiency now, you’ll reduce your costs in the future. In fact, ENERGY STAR® data shows that small businesses can cut their utility costs by 10 to 30 percent through strategic energy investments.
When choosing which energy efficiency measures to invest in, you need to consider the payoff. Here are some things to consider when you’re creating a budget for improving energy efficiency in a way that’s most valuable to your business, no matter its size.
First of all, you need to understand how your business uses energy. For instance, do you spend more money on lighting or temperature control? Do you use energy-intensive appliances like refrigerators, dishwashers or dryers? How much do factors you can’t control, like cold Michigan winters, affect your business’s energy use?
A free energy audit is a good first step. Consumers Energy’s Small Business Assessment Program analyzes your business’s energy use and recommends the energy efficiency upgrades that can save you the most. The audit will also help you establish savings calculations for energy-efficient products, and help you calculate the percentage of your business utility bill that an energy-efficiency solution is projected to save.
For instance, based on your company’s energy use, would a new HVAC system be a better investment than a lighting retrofit? How can available rebates from Consumers Energy impact your budget? If your budget is small, would replacing your existing thermostat with a Nest smart thermostat, or replacing your incandescent bulbs with LEDs result in more energy savings? Are any of these products available with instant rebates and free shipping from Consumers Energy’s Small Business Marketplace?
Getting the most return on your energy efficiency investment
Some energy efficiency upgrades, such as replacing lighting, can have a bigger return on investment than others. You can determine what works for you by taking into account the following factors: Do you own your building, and how long do you plan to stay there?
Investments like new HVAC systems and appliance upgrades pay you back over the long term, so your budget will need to account for that. These equipment upgrades may also qualify for tax credits, grants and loans that accumulate over the long term, in addition to Consumers Energy rebates.
If you’re a renter or intend to move soon, consider lower-cost and potentially portable energy-saving upgrades like LED light bulbs or faucet aerators. And finally, energy efficiency budgeting should not just impact your company’s electric bill. You also need to take into account intangibles like employee comfort and productivity, along with your customers’ experience and satisfaction. LED lighting and smart thermostats can have positive impacts on both.
Saving energy saves your business money. Discover the many ways your business can save. For more tips or to get started on an energy efficiency project visit Consumers Energy.
For more small business tips, inspiration and small business stories, visit Small Business Pulse.