COVID-19 | Utility Dive: The (Energy) Efficient Road to Small Business Recovery

May 27, 2020

By Ralph Cavanagh and John Di Stasio

The (Energy) Efficient Road to Small Business Recovery

The road to recovery for the backbone of the American economy, our small businesses, will be long and arduous as the nation continues to grapple with an incalculable public health and jobs emergency. Our federal policymakers took strong actions to address the immediate needs of small businesses and their employees during the economic shutdown.

Now, with the country reopening, our federal leaders must find innovative ways to continue to support these businesses, which deliver half of the country’s GDP and employ half of our workforce, as they claw back from the human and financial devastation wrought by COVID-19. 

This issue is very much on the table as Congress considers its next COVID interventions. We believe that if policymakers approach this problem as an opportunity not only to help our economy recover, but to make it stronger, more energy productive, more equitable and more sustainable, everyone — not just small businesses — will reap the benefits, including cleaner air and lower energy system costs.

One novel approach that meets these goals would be to establish a Small Business Energy Efficiency Grant program, as called for by the Alliance to Save Energy, that would provide federal grants to electric and natural gas utilities (and institutional partners) and supplement available utility incentives to encourage small businesses — especially minority businesses and underserved communities — to make zero-cost energy efficiency upgrades to their facilities.

Such an initiative will immediately and permanently lower their operating expenses, which will help keep paychecks flowing. We will need efficiency workers to implement the upgrades, putting them back to work and improving the general economy.

Fully 75% of America’s utilities already run programs that help their customers, including small businesses, to reduce energy use and lower monthly bills. These programs offer an established conduit for reaching small businesses across the nation. But even in the best of economic times and with substantial incentives, small businesses struggle to come up with their share of the capital needed to make energy efficiency upgrades.

In today’s economic environment, small businesses are unlikely to use scarce internal funding for such work, even when they realize it could reduce their monthly utility bills by 30% to 40%. By providing grants to America’s utilities to take the costs for these efficiency upgrades down to zero, Congress will ensure that the benefits are much more widely shared. 

And because utility energy efficiency programs rely extensively on small businesses, such a partnership between the federal government and utilities also could help their employees get back to work quickly. Sadly, America’s energy efficiency workforce of more than 2.3 million has been hit harder than workers in any other segment of the clean energy industry, with a recent report from E2 and others finding that more than 413,000 efficiency workers lost their jobs in March and April.

A federal grant program to supplement available utility incentives would result in a high leverage of federal funding; small businesses that are better able to afford and pay their utility bills; the reinstatement and creation of energy efficiency jobs; and macro-economic and societal benefits through overall reductions in energy use and its associated environmental impacts.

Such a program represents the type of innovative but practical policy solutions that we believe can not only get our economy going again, but also make it more productive, more equitable and more sustainable for the future. We hope our federal policymakers agree and take action.

Wednesday, May 27, 2020