Several years ago, when Cleveland’s Council of Smaller Enterprises (COSE) first started to offer energy assessments for our business members, we anticipated lines out the door. Well, perhaps not lines, but we thought that business owners would be eager to learn how they could cut their utility bills.
Unfortunately, that turned out not to be the case. It seems that people did not want to know what was wrong with their business or how they could improve it if they didn’t have the means to pay for it. Several owners told us it was like going to the doctor without having the insurance or other means to fix all your ailments.
As we mark the 50th Anniversary of National Small Business Week, I’m delighted to report that COSE has now formalized a three-point “energy doctor” solution to help businesses capture significant savings on their utilities bills that can then be plowed into marketing or other investments designed to get that next customer in the door.
We recognize that America’s small businesses play a huge role in the economic health of our communities, our states and our country. Small businesses nationwide create two out of every three new private sector jobs. According to the Small Business Administration, half of all working Americans either own or work for a small business.
To make it easier for our small business members to save money on energy costs, our three-part energy plan includes partnerships with banks interested in making traditional capital loans. We just recently launched a loan guarantee that offers small businesses that fall outside of traditional underwriting parameters the opportunity to achieve their energy efficiency goals.
The third and newest part of our suite of solutions is a partnership with efficiency-services financiers Metrus Energy and CalCEF, organizations focused on accelerating clean energy technologies. Together, we have created the Ohio Efficiency Resource Fund, a pioneering financial tool that provides otherwise hard-to-get financing for small- and medium-sized businesses to make energy efficiency improvements with no upfront costs and no risk. This new fund is made possible through a structure called an Efficiency Services Agreement (ESA).
An ESA is an innovative financing model that eliminates the first cost barrier often associated with efficiency improvements without impacting borrowing capacity for other capital needs. It converts energy efficiency improvements into a service where building owners pay only for measured energy savings at a rate lower than their utility rate. Since this is a service and not a loan or equipment lease, the agreement is not a liability on the business’s balance sheet and is an immediate source of positive cash flow.
The Fund recoups its investment by billing customers only for a portion of their actual realized efficiency gains. In other words, owners immediately see savings on their utility bills and are charged only a portion of those savings. Best of all, since the useful life of the energy efficiency equipment continues well beyond the life of the contract, building owners will continue to save for years to come.
ESA costs are guaranteed, reducing exposure to utility price fluctuations. And, our regular payments are treated as an operating expense instead of a capital expenditure that sits on the balance sheets.
Solutions like these are just a few examples of how we’re helping our members in Ohio, but case studies like these exist in local chambers of commerce throughout the United States. Last month, Chambers for Innovation and Energy highlighted the excellent work of 10 local chambers from around the country. I’m pleased that COSE’s energy efficiency efforts were one of the 10 programs honored for selection.)
Small businesses are at the heart of the nation, and with energy efficiency measures, chambers of commerce throughout America are helping small businesses weather the still rough economy. In honor of Small Business Week, we’re celebrating Ohio’s small businesses and creating economic solutions designed to help save money – and get the next customer through the door.
