Across the United States, local chambers of commerce and small business associations are seen as thought leaders by their small business members, providing practical and innovative business advice that is good for owners and their employees, for customers, and for communities. This holds true for energy efficiency. Why? According to a Wells Fargo/Gallup small business survey, energy is the third highest concern among small business owners ranking only behind healthcare costs and taxes. In short, energy costs are a big deal for the small business community. However, many small businesses remain in the dark about the cost-effective solutions that exist to improve their building performance.
Small businesses typically occupy small- and medium-sized buildings, which account for the majority of U.S. building stock in both number and area (93.9 percent and 49.5 respectively), according to the National Institute of Building Sciences. Many of these buildings are inefficient energy hogs because of how difficult the sector has historically been for utilities and efficiency advocates to reach. This means there’s a significant opportunity for chambers of commerce and small business associations to bridge the information gap and become the de facto connectors to today’s best-practice efficiency solutions.
To kick-start this work, the Institute for Market Transformation (IMT) and the Council of Smaller Enterprises (COSE)—the small business arm of Cleveland’s chamber of commerce that provides energy solutions to its members—launched the Small Business Energy Initiative in 2016 to work with chambers of commerce, small business associations, and similar local organizations to arm businesses with the tools and information needed to unleash the power of energy efficiency in their buildings. The Initiative stems from IMT and COSE’s pilot Cleveland Energy Aligned Leasing Program, which launched in 2014 and concluded early 2016.
Today, the Small Business Energy Initiative is supported by the U.S. Department of Energy and led by IMT and COSE in partnership with the Chapel Hill-Carrboro Chamber of Commerce (North Carolina) and the Traverse City Area Chamber of Commerce (Michigan). Over the course of the three-year initiative, IMT, COSE, and its partner chambers are hosting workshops for small business landlords and tenants and tailoring energy service options for individual participants. These workshops cover topics that lay the foundation for savings such as energy and water audits and benchmarking, low- and no-cost operational tools and technology, utility rebates and incentives for equipment upgrades, as well as green or energy-aligned) leasing and other innovative tools to lower upfront investment costs.
Insights from the Small Business Energy Initiative’s Energy Symposium
The Initiative recently welcomed community leaders from across the U.S. to Cleveland for a two-day Energy Symposium, hosted in collaboration with the ReMake Group. The milestone event was held to share best practices, discuss opportunities for chamber leadership on energy, as well as to seek feedback from attending chambers and small business associations on the most pressing needs and obstacles that they are facing in order to engage small business members and help them save energy and resources. Fifteen chambers and small business organizations from Colorado, Michigan, Minnesota, New England, and several other regions participated.The Symposium ended with a call to action offering interested organizations the chance to apply to become members of the Initiative.
Below are the top five cross-cutting themes and takeaways that were identified across the day’s discussions and presentations:
Local problems warrant local solutions. As with many issues that are difficult nuts to crack, there is no single recipe for chambers and small business associations to engage the small business sector on energy efficiency. Every city, town, region, and individual are within unique landscapes and at different stages in tackling sustainability, resulting in the need for targeted messaging and programs. In addition to tailored communications and program offerings for small businesses, every chamber and association has a varying level of technical capacity and expertise in energy and sustainability, so we need to develop resources with different entry points to reflect this range.
Chambers can be trusted brokers for efficiency opportunities. Chambers of commerce are in the unique position to act as the trusted intermediary between small businesses, lenders, utilities, and other key players in the energy world. While advocates for the success of small businesses, most chambers also have varying relationships with their utilities; thus, they are in a neutral position to relay messages, opportunities, and programs. Chambers can also work towards being the marketing partners of energy suppliers, brokers, and consulting firms, as these groups often have larger budgets for advertising and sponsorships.
Return on investment (ROI) needs to be front and center. Businesses typically have a low tolerance for a long-term payback that extend beyond three years, unless it is part of their capital improvement schedule or it is required. Chambers need to help provide clarity and direction to their small business members in order for them to gain the confidence to pursue energy efficiency investments. Guidance in understanding the business case, which includes upfront costs, along with ongoing costs, cash flow, anticipated utility savings, and non-energy benefits will bring the necessary clarity to these various aspects of return on investment.
Increased utility energy efficiency investment poses new opportunities. Though inherently conflicted, there are several shifting trends in utilities that can lead to greater small business investment in energy efficiency. Although utilities have traditionally made a profit by selling power, most provide some form of energy efficiency programming due to regulatory standards, changing markets, and public pressure. On their own, small businesses don’t often have leverage with utilities to negotiate, or receive the same level attention and funding as others. This is where chambers can step in and collaborate with their utilities and others in the energy market to make sure small businesses are adequately addressed by efficiency programs.
Local governments need to increase engagement with chambers and their business members to help them navigate energy policies, incentives, and regulatory changes, as well as inform plans to overcome market failures and inefficiencies. Foundational policies such as energy and water benchmarking should be adopted to gain data that can inform energy-saving strategies, and governments should create and promote incentives and programs that benefit both tenants and landlords and help build the business case for investing in energy efficiency.
Now more than ever, building efficiency plays a major role in the economic health and longevity of small businesses and the communities they serve. It’s up to local chambers and business associations to help them find and deploy smart solutions to lower utility bills and operate in a sustainable manner.
For more on key themes, insights, best practices, and existing resources highlighted during the Energy Symposium, download our Empowering Small Businesses: Energy Symposium Report-Out. This resource contains easy steps and best practices that any chamber or small business association looking to incorporate energy efficiency into their programming can execute. In addition, you can find the Small Business Energy Initiative online, download and share energy efficiency graphics created by our partners at Resource Media, and follow the #SmallBizEnergy hashtag on Twitter.
For information on the Small Business Energy Initiative and how to get involved, email me at alex.harry@imt.org.
