Business people often say that it is necessary to spend money in order to make money. However, there are certainly some areas in which savings are especially appreciated and needed. In terms of the overall balance sheet, spending money on some green energy strategies can be hard to swallow in the short term, but beneficial in the long run.
It is not surprising that numerous business owners feel nervous out making major outlays in this realm and question whether the instant hit to capital funds are worth any savings generated down the road. Though it is likely that case that doing so will in fact produce financial gains in the future, knowing how to finance these upgrades often proves challenging.
If you are among those contemplating energy efficiency expenditures, you almost certainly have questions you wish to have answered, including how best to pay for them. The good news is that by conducting a careful review of what is available out there, you will soon see that energy efficiency adjustments are more affordable than you may think.
Have An Energy Assessment Performed
Because you are on the lookout for advice on paying for energy efficiency upgrades, perhaps you have already done this, but if not, now is the time to get started. The way we use energy is complicated, and in order to get the most bang for your buck, it is necessary to see just how your company utilizes it according to the experts at Josco Energys conference. You must discover how and where your firm is wasting resources and how consumption can be lowered both now and going forward.
Energy efficiency professionals can assist in the process of doing this type of review, using important methods, tools and resources to take an in-depth look at your energy use and determine where you can cut costs in a very real way.
Though they undoubtedly provide numerous benefits in the long-term, substantial types of green energy updates call for lots of planning and, yes, large-scale spending that can have an effect for years to come. Therefore, it is also vital that you conduct a comprehensive assessment of your business condition, goals and objectives.
If your facility leased or owned? Are you planning to remain in your existing location for a long period? Is your business likely to grow to the point where large changes to equipment, personnel or location will need to occur? These answers are going to help determine precisely the kind and scape of upgrades you can and should make.
Comprehending Your Finances
You may be thinking that this is a no-brainer, but far too many businesses actually fail to pay enough attention to this step, putting their enterprise in a precarious situation. The goals and plans that are gleaned from the step described above will have a major effect on your overall financial picture.
Growth and expansion are things that will produce a demand for resources, but there are additional things to think about as well. Plans that involve borrowing funds to procure goods or services are going to necessitate a closer look at your firm’s credit standing. Companies with strong records in this area will be able to obtain more advantageous interest rates and flexible terms.
Engage thoughtfully with your finance team, learn your credit score and, if you find it is lacking, do the things required to get on a better footing so that you can get the best loan terms possible.
Research Available Resources
Lots of green energy efficiency initiatives exist that are designed to help businesses with an interest in them. Lots of them come with a financial assistance component meant to alleviate the cost pressures of making important upgrades. There are always conventional bank-based loans, but if that path does not seem open to you, there are some alternatives to consider.
Local And State Programming
These types of government-based initiatives frequently involve grants that need not be repaid. There are also programs that include energy efficiency upgrade loans which are often characterized by better interest rates and easier terms than a traditional loan product. You may also be able to avail yourself of rebates that work to defray expenses once upgrades have already been made.
Though there is usually a lot of competition to secure these types of green energy incentives, by doing lots of research in advance, you can improve your odds greatly. Helpful lists of current programs can be easily obtained in each state, and there is usually assistance available for every size and type of business.
Consider An Energy Service Agreement
This is a scenario in which a business is afforded the opportunity to make efficiency or renewable energy improvements without having to pay for them on the front end. Rather, a business will enter into a contract with a particular service provider who agrees to effectuate the improvements.
Throughout the term of the contract, the participating business will be required to make payments at a rate that is less than or perhaps equal to its baseline energy expenditures before the project’s completion. Thus, lots of businesses are able to realize savings in short order. After the contract period is over, the business will begin to see the full amount of energy savings.
Leasing For Capital Or Operational Needs
Leases of this sort offer a resource for those wishing to replace aging or inefficient equipment by obtaining new, green-friendly upgrades.
A capital lease is not unlike a traditional loan. After entering into such an agreement, businesses are able to treat new equipment virtually as an asset of its own. It can be included on their balance sheet and depreciation can be claimed for tax purposes. When the leas concludes, lessee businesses are afforded the option of buying that equipment at a discounted rate.
An operational lease functions almost like a rental agreement that permits the enterprise the flexibility to renew the lease at its end, return the capital equipment or buy it at a lower price once the contract concludes. Lease price is folded into the operational budget of the business, something that can be useful tax-wise. Also, leases of this nature can be perfect for those with uncertain long-term plans.
There is little doubt that making key energy upgrades has a positive impact on the long-range financial status of any enterprise. However, paying for these improvements is daunting for many. If your business is considering energy efficiency changes or exploring renewable green energy options, spend some time looking into your consumption needs, business projections and financing options. The peace of mind you will get in terms of the actual affordability factor will be more than worthwhile.