Byron Kennard of the Center for Small Business and the Environment, says states such as California need to look no further than small businesses if they want to cut down on energy costs.
CURWOOD: Thanks to cool weather and decreased demand, California now has a surplus of energy. The state is selling back some of its excess power for this month, at a loss. But Byron Kennard believes California and other states still need to keep an eye towards conserving energy. He says they should look in the direction of small businesses.
KENNARD: Earlier this year, California spent over $7 billion to import out-of-state energy. Unfortunately, a large chunk of this expensive electricity was wasted through inefficiency. Much of this inefficiency can be traced to small businesses, especially those that are energy intensive, such as restaurants, convenience stores, and small manufacturers. Small businesses consume more than half of all commercial energy in the U.S. So the amount wasted is huge. For example, there are 73,000 restaurants in California, and they're among the state's biggest energy consumers. Now, much of this energy, one-third to one-half, can be saved, thanks to new energy efficient technology.
Let's say these restaurants cut their electric energy use by 30 percent. According to the Environmental Protection Agency, that's the amount typically saved through small business energy efficiency upgrades. These cuts would reduce California's energy demand by approximately 1500 megawatts. That's a lot. For comparison's sake, this winter's blackouts in California were caused by shortages of 500 megawatts. Thirty percent less consumption means 30 percent reductions in electric bills. So small business efficiency upgrades pay for themselves over time. Over all, small businesses could save billions of dollars each year.
This helps the environment, too. A 30 percent reduction in energy use by California's restaurants would at the same time prevent the release of over 2 million tons of the greenhouse gas carbon dioxide into the atmosphere. What's more, small business energy efficiency upgrades can be put into effect quickly. Basically, making small businesses energy efficient involves doing the same simple thing over and over again, in lots and lots of places.
Restaurants, for example, could use air-conditioning tune-ups, and window film to reduce the summer heat. Little things mean a lot, especially to small businesses operating on slim profit margins. Just one energy efficient exit sign can save about $20 annually in electricity costs, compared to typical incandescent signs. So why aren't small business energy efficiency upgrades selling like hotcakes? The big obstacle is the high cost and hassle of financing. The best way to eliminate this obstacle would be a federal tax credit for small business purchases of energy efficient products. Such a tax credit would point the nation down the road of profitable energy efficiency, with small businesses leading the way.
CURWOOD: Byron Kennard is Executive Director of the Center for Small Business and the Environment, a non-profit organization in Washington, D.C.
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