Traditionally, small businesses have been seen as â€œhard-to-reachâ€ customers for utilities. However, if the right program is in place and it’s executed by a team who understands the needs of small business owners, this previously untapped resource can become a boom for utility energy efficiency programs.
With high participation rates, small businesses have the power to help utilities reach energy efficiency goals, regardless of whether those goals are voluntarily, part of an Energy Efficiency Resource Standards (EERS) or part of the IRP process.
In the traditional model, there are often strong barriers that hinder utilities from achieving high participation rates. In newer, progressive models, a well-designed energy efficiency program will overcome these hurdles, making the small business program a huge success.
At Lime Energy, we’ve developed a unique approach to implementing SBDI programs across the country. In doing so, we’ve discovered 4 key components to a small business energy efficiency program that drives high participation levels and results for utilities and small businesses.
1. Find the right businesses, in the right locations
Using a targeted marketing and sales approach, Lime can help utilities identify and engage eligible small businesses located in specific geographic areas.
By working with groups of customers in specific areas, Lime and our Ally Force can minimize travel and decrease distribution costs – which optimizes energy savings and lowers the cost of program delivery expense. Keeping all efforts localized reduces business downtime and effort required by the owner, making participation more appealing to customers.
Utility’s Concerns: A belief that the time, cost and effort required to implement small business energy efficiency programs doesn’t return sufficient energy unit savings.
SMB Concerns: Too much effort necessary to coordinate with installations and fearful of day-to-day business interruptions.
Lime Solution: Implement a highly targeted and personalized outreach effort. Using software and data analytics, Lime can target the best candidates who are most likely to participate, plus identify the measures and incentives that appeal to specific business types. From there, use insights to create customized messaging that is geared to each business owner’s unique perspective. Energy Advisors are assigned compact territories, minimizing downtime, and truly allowing them to get to know the local businesses and environment.
2. Show them the money
Utilities often offer subsidized energy efficiency services through a direct install program, but by combining generous incentives with project financing – which speaks directly to the customer’s bottom line – participation rates can skyrocket.
Small business owners are busy; the cost savings argument is strong enough to grab their attention and when you help them understand that they’ll receive new high-efficiency equipment that will have a positive cash flow impact, they’re convinced to participate.
Utility’s Concerns: Convincing owners of the benefits is a challenge, plus budget constrictions make it difficult for some owners to pay large up-front installation costs.
SMB Concerns: Busy running their own day-to-day operations to meet their bottom line, they want short payback time with minimal time commitment.
Lime Solution: By providing 12 to 24 month financing options, many projects are immediately cash flow positive. With no upfront cost and recurring long term savings, small businesses are far more likely to partake in the program and increase participation rates.
3. Use a local labor force
To initiate conversations with potential customers, utilities should partner with community-based organizations. This creates a workforce that understands the needs of their small business owner neighbors, which also helps the utility get their foot in the door. It also provides value by providing jobs within the community, which is valued by small business owners.
When energy efficiency programs can leverage familiarity with customers, speak their language, provide incentives, and help the community, business owners become more likely to participate.
Utility’s Concerns: There are numerous types of small businesses, each with different energy uses, savings opportunities, financial needs and culture to address. How do we build a program appealing to them all?
SMB Concerns: Owners want to deal with people in their community whom they can trust.
Lime Solution: Our first step is to hire energy auditors with both high sales ability and technical skills. These representatives will make the first impression with the customer, so they need to be able to build a relationship with the customer while speaking knowledgeably on energy efficiency. By establishing trust early on, it will help convince owners that the program is in their business’ best interest.
4. Build Awareness Through Grass Roots Effort
Developing a team of educated local experts to spread the word about energy efficiency programs makes owners more amenable to program opportunities. This opens the door for energy advisors to join the local team and further convince customers to participate.
This reinforces the need for auditors to have both sales and technical skills in order to effectively position the benefits of program participation. They need to become the local experts.
Utility’s Concerns: Small businesses are spread out and owners are busy, making it difficult to spread awareness.
SMB Concerns: Lacking in program knowledge, owners don’t understand the potential benefits. With no familiarity with energy advisors, it’s difficult to trust that the utility will deliver on promises.
Lime Solution: Putting feet-on-the-street is the best way to start creating awareness for a small business program. Use a local labor force that prioritizes building relationships with owners.
Conclusion – The Evolution of Utilities
The business environment for utilities is changing rapidly. Potential new standards from the REV initiative and increasing pressure from regulators are forcing utilities to think outside the box and making traditional energy efficiency programs a thing of the past.
New and progressive ideas have been tested in the marketplace and 2015 calls for utility companies to leverage the resources of traditionally â€œhard-to-reachâ€ customers and realize the potential of targeted small business energy efficiency programs.
The right energy efficiency program will help utilities meet public demands, satisfy regulators, serve customers and contribute to the bottom line. They also make a difference in local communities.
This synergy creates a win-win-win situation. Utilities benefit from meeting efficiency goals. Small businesses benefit by saving money. The communities benefit by saving energy, creating jobs and building stronger relationships.
This win-win-win situation is only possible with high program participation rates and energy savings. Referencing the graphic below, where the data was pulled from a recent ACEEE report, you can see that even successful programs can be improved upon with Lime’s approach.
Large northeastern utilities implemented three different SBDI programs, with three different implementation firms and the results speak for themselves. While the other firms performed well, the Lime Energy model provided the most energy efficiency savings and the highest program participation rates.
If you’re ready to discover how a Lime Energy SBDI program can create a win-win-win for your utility and customers, then contact us today.