Small businesses represent roughly 80% of the KwH consumed by commercial customers, and very few small businesses participate in utility administered energy efficiency initiatives. For utilities working to meet new and upcoming energy efficiency standards, this represents a significant challenge.
The problem is not a lack of demand. Small businesses understand that energy costs are a significant portion of their bottom line. The problem is that traditional approaches to delivering energy efficiency programs provide too little demonstrable benefit at too high a costâ€”in both capital and time.
How Traditional Energy Efficiency Initiatives Are Failing the Small Business Sector
Energy efficiency programs are traditionally well utilized by companies that have the resources and expertise on staff to navigate the program. Unfortunately, only the largest companies do, and they represent only about 20% of commercial energy use.
The other 80% simply don’t have the resources to effectively navigate traditional energy efficiency programs. Here are 8 reasons why:
- Lack of accessibility. Many small business owners simply don’t know what’s available or how it can help them. Without a concentrated effort to research programs and identify those that are a good match, small businesses are missing out on programs they don’t even know exist.
- Hands-off approach. Most energy efficiency programs begin with a facility audit and end with recommendations. This leaves the customer responsible for finding the right equipment and installation services to meet their need. This is a barrier to follow-up and causes spotty participation.
- Inconsistent messaging. Each potential vendor may provide a vastly different message regarding cost, benefits, and return on investment, which erodes customer confidence.
- Paralysis by analysis. With hundreds of potential equipment decisions and dozens of vendors, customers get stuck trying to find the best value from a reliable supplier. To make things more complex, each vendor may provide different recommendations for how best to solve the problem. In order to make a good choice for their organization, customers must become experts in energy efficiencyâ€”a hurdle that is unpalatable for most busy small business executives.
- Speed of obsolescence. Because of the significant time investment required to become an expert, customers often delay decisions for months or years. By the time they decide to move forward, the technology has changed so that they must begin the decision progress all over again.
- Lack of confidence. Because of the complexity of the process and the number of vendors in the market, customers are at risk of being misled or even scammed by vendors. Even a decent but less-than-optimal solution can erode savings or cost more than it returns. Customers understand this and lack confidence because of it.
- Lack of post-install support. For those few who make it past initial hurdles to a successful implementation, new challenges await. Because of the multitude of entities involved and the length of life expectancy for equipment, customers frequently have trouble accessing troubleshooting, maintenance, and warranties. In many cases, by the time a problem arises, the installation company or equipment manufacturer no longer offers support. In other cases, it may be unclear which of the vendors is even responsible.
- Opacity of savings. Without clear data on current spend, cost of installation, cost of financing, and long-term savings, customers lack visibility into the true return on their investment.
How Utilities Should Approach Small Business
To penetrate the small business market, an energy efficiency program must overcome each of the eight challenges and deliver unmistakable value to the customer. Here’s how Lime Energy’s integrated services model delivers tens of thousands of MwH savings to utilities by serving the small business market.
- Easy accessibility. Lime pioneered a direct-to-customer system that literally puts feet on the street in the form of representatives who knock on the doors of small businesses and providing immediate, non-intrusive audits that show business owners exactly what they will gain from an energy efficiency installation, and makes the decision a no-brainer.
- One-stop solution. Lime’s team goes through a formal process with the utility to identify exact requirements and the measures necessary to meet them. Our supply channel partnership with Rexel delivers measures to the small business at the lowest possible cost. We fix labor costs across trade allies. The result for the customer is a simple, one-stop solution that provides immediate, clear value.
- Unified message. The individuals who meet with the small business customerâ€”the feet on the streetâ€”are Lime employees, all trained in one consistent message.
- Easy decision-making. The customer is presented with only a small selection of equipment and vendors to choose from, all of which represent good value, so that the decision making is simple.
- Speed of install. Our integrated direct install approach streamlines the process so that customers always receive up-to-date equipment.
- Purchasing confidence. Due to our close vendor relationships and bulk purchases, the customer knows they’re getting the right equipment and that the pricing is as competitive as possible. All installers are carefully approved trade allies who provide as non-intrusive and high-quality installation as possible.
- Long-term post-install support. We contract directly with the utilities to warranty the lifetime of the equipment. There is a single 800 number for customers to call for troubleshooting, maintenance, and repair, and they have the peace of mind that it will still be there in six or ten years, and that their needs will be met.
- Transparent savings. We provide customers with detailed data on current spend, cost of installation, and estimated savings. We help them navigate subsidies and financing to access no-brainer solutions. Often, customers achieve immediate positive cash flow, which is easy to see thanks to the transparency of the data.
Small business owners love the ease and transparency of savings, and utilities love the Nega-watts produced.
We think every small business deserves access to programs like this. Working together with our nation’s utilities, we can make it happen. Contact us to learn more today!