Company profits from helping others with efficiency
Greenscape Capital has been contracted to upgrade energy efficiencies at Queen Charlotte Lodge, including the installation of alternative energy, either wave or geothermal power. (Photo courtesy queencharlottelodge.com)
You bet it is. If it hasn't clicked for you that your company could realize significant profit from energy efficiency, consider this: a new B.C. company is basing its business model on helping you cut your energy bills. If you don't profit, they don't.
"Our key business is getting companies to retrofit their operations," says Bryan Slusarchuk, CEO of Greenscape Capital. "The payback on this is just immense in terms of bottom line savings from reduced energy cost. And this is not a sector-specific opportunity – every business in the world that uses energy is a potential retrofit client."
Greenscape's list of new clients – $30 million of new business in B.C. over the past few months – includes parking facilities, a tourist lodge, and an auto dealership.
"The retrofit business is so misunderstood," says Slusarchuk. "There's been a lack of understanding in the business community of just how much increased profitability can be realized through simple energy savings."
Indeed, a 2009 McKinsey & Company study, "Unlocking Energy Efficiency in the US Economy," identifies US$1.2 trillion in potential energy savings that could be realized with an investment of $520 billion through 2020.
Closer to home, the 2007 Conservation Potential Review study produced for BC Hydro identified opportunities for efficiencies that identified more than 10,000 GWh/year of electricity that could be saved annually through conservation. The "new" energy that would be made available by reducing inefficiencies would be enough to power one million homes.
That's why BC Hydro has a wide variety of Power Smart programs that provide energy efficiency incentives to residential, business and industrial customers. Improved efficiency also helps reduce greenhouse gases and improves energy security.
As companies act on efficiency opportunities, the testimonials are adding up. Nine Swiss Chalet restaurants in B.C. are saving nearly $10,000 per year in electricity costs – and the lighting upgrade qualified for an incentive of nearly $2,500 through Power Smart's Product Incentive Program (PIP). Abbotsford's Sevenoaks Shopping Centre is saving $12,000 per year in electricity and labour costs through upgrading just its decorative lighting.
One strata council is aving $30,000 per year after a lighting retrofit in its parkade. And a Vancouver Island law firm has cut its monthly lighting costs by 69%.
If there's proof that money is to be made through efficiency, why have companies been so slow to embrace it? The McKinsey report identifies several barriers. It's a challenge to estimate potential energy savings. Opportunities for efficiency are fragmented across billions of electrical devices in millions of locations, so "efficiency is the highest priority for virtually no one."
Finally, there is the up-front cost – efficiency upgrades pay for themselves over time, but they usually require an infusion of cash at the outset.
Greenscape's retrofit plans
To overcome this barrier, Greenscape's model provides full service energy retrofits, which include financing. "We finance the retrofit so that most of our revenue model is based on sharing in the energy savings over time," says Slusarchuk. Greenscape reinvests profits from its energy retrofitting business into a portfolio of other green companies, including at present an eco-clothing line and a wholesaler of organic food products.
While it never did make sense to operate inefficiently, the cost of doing so in some industries has been low. With carbon taxes, peak oil, and global energy insecurity placing new pressures and potential risks on companies, those costs could rise. Slusarchuk says that means it's a great time to think about getting lean. It just happens that this also means 'going green.'
"The context for this discussion has traditionally been that business owners and corporations should do things more efficiently because it's the "right" thing to do," Slusarchuk continues. "But I think the context has to be, 'What is the return on investment? Can we decrease your energy consumption, decrease packaging costs, decrease your transportation costs and result in enhanced profitability?' And the by-product is good for the environment."
Slusarchuk says energy efficiency is also good business strategy.
"Cheap resources are becoming more scarce," he says. "Businesses that don't adapt now are going to be faced with massive losses in the future, and collectively, it's going to spell a lot of trouble for the North American economy. Companies that aren't realizing that energy retrofitting, becoming leaner, and producing less waste means bottom line performance, are going to be devastated down the road."
You can learn more about BC Hydro's Product Incentive Program and other programs online, or you can contact the staff at the Power Smart Helpdesk. Phone them at 604 522 4713 in the Lower Mainland or toll-free 1 866 522 4713, or send them an email.