These days, it’s hip to be green. Everywhere you look, businesses are marketing themselves as “green,” “eco-friendly,” “sustainable” or other iterations on the theme.
And consumers are buying it. Whether it is because they, too, want to ride the green wave or because they are truly eco-conscious, it is clear that, as they would say in fashion, green is the new black.
For business owners, going green can not only mean a marketing splash but also substantial savings in energy costs for running their business.
So, what can you do to help your business go green?
One of the first and simplest things a business owner can do is determine ways to cut existing energy use. The first step in this process is to have an energy audit conducted at your facility. This can help you determine ways to reduce your existing demand. In addition, Connecticut Light & Power, United Illuminating and most utility companies along with ISO-New England, the independent service operator of the New England power grid, all maintain demand response programs in which a business can literally be paid for agreeing to reduce its power usage during peak demand periods (even if a reduction is never required).
Part of an energy audit/energy reduction plan could include updating equipment that your business uses to Energy Star-rated equipment and variable speed motors. Updating equipment can have twice the bang for your buck – not only will it reduce your energy consumption and thereby reduce your utility bills, but there are also numerous incentives and rebates available for such purchases, both through the state of Connecticut and the federal government.
In addition to these incentives, many conservation projects can produce Conservation Credits (also known as white tags), which can be traded similar to stock and can provide added return on the investment.
Some business owners may want to go further than this and install green electric generation at their business. There are numerous factors that must be considered when seeking to conduct on-site generation. First, what generator makes sense for your business? Does your facility have large, unused roof space with additional structural capacity? If so, then solar panels may be the best option for you.
Other popular options include wind turbines and fuel cells. A fuel cell is a device that uses a chemical reaction to convert hydrogen to electricity with heat and water as the only by-products. Many people are not aware that Connecticut is known as the fuel cell capital of the world. Because of that, there are particularly lucrative financial incentives from the state for the utilization of fuel cells. These incentives are available through the Connecticut Clean Energy Fund (CCEF). The CCEF is funded by a surcharge on the bills of ratepayers. While part of CCEF has been used to balance the state budget, there still remain financial incentives for many projects.
In addition to these incentives, many on-site generation projects can produce Renewable Energy Credits (also known as green tags) which can be traded similar to stock and which can provide added return on the investment.
When considering the type and size of installation, it is important to have a good understanding of your business’ existing energy usage. As its stands right now, Connecticut’s net metering law does not make it cost effective for a business to generate more power on-site than its current usage. Therefore, not only is the type of generation an important consideration but also the size of the installation as well. Even if the installation is “right-sized” for the facility, a business owner should still interconnect the facility back to the grid through an interconnection agreement so that it can make money selling excess capacity, even if the rates for doing so are not particularly lucrative.
Once you determine the best fit for renewable generation at your facility, you need to review the ever-changing funding available to assist in payment of its renewable installation. As discussed above, those resources can include funds from the utility company, the state (CCEF) as well as the federal government. On the federal level, there are grants, loan guarantees, tax credits and other incentives available. It is important to identify these potential funding sources early on. Particularly with federal incentives, many of these programs require a recipient to comply with the National Environmental Policy Act (NEPA). NEPA compliance can be a long and cumbersome process and will require the assistance of an environmental professional.
At the same time, a business must identify the appropriate regulatory approval process to have on-site generation approved. In Connecticut, the regulatory approval body will depend on the generating capacity of the installation. Typically, any on-site generation over one megawatt would require approval from the Connecticut Siting Council. Fuel cells require Siting Council approval for any installation above 10 kW. Smaller installations will still require local zoning approval. There are other regulatory approvals that one must keep in mind. For example, if a business would like to install a wind turbine, the turbine may require approval from the Federal Aviation Administration.
Another way to financially capitalize on a renewable generation installation is by selling renewable energy credits (RECs). Under the recent Regional Greenhouse Gas Initiative, certain large power plants in New England and the mid-Atlantic are required to reduce carbon emissions or purchase credits to offset carbon emissions (known as Cap and Trade). RECs are bought and sold on markets similar to a stock exchange. The most well known REC market is the Chicago Climate Exchange.
Once the installation is approved and constructed, it is time not only to see the financial payoff in reduced energy bills but to make a marketing splash. So, contact the press and let your customers and the public know that you are riding the green wave. What’s good for the environment can also be great for your business.
Carrie L. Larson is an attorney in the Utilities and Green Development practices at Pullman & Comley, LLC; Brad N. Mondschein practices in the area of Alternative Energy and is chair of Pullman & Comley’s Green Development practice. They can be reached at clarson@pullcom.com and bmondschein@pullcom.com.
