5 ways businesses can leverage renewable energy for profitability
- Written by Samuel Renotte
Renewable power is energy derived from any source that won’t run out on a human timescale. Solar, wind, hydroelectric, and geothermal heat are some of the most common types of renewable energy. These sources are considered cleaner than nonrenewables like coal and oil, as they’re less polluting and emit less greenhouse gas emissions.
So renewable energy is clean and abundant, but there are other reasons to draw on these types of power. For businesses in particular, using renewable sources to power their premises could provide additional flow-on advantages. With this in mind, these five benefits outline why renewable energy could be well worth the initial investment for your business.
1. Lower energy bills
Electricity is probably one of the biggest overheads in your business. One of the most immediate advantages of switching to renewable energy is the savings you’ll make on your power bills. An example is that installing a solar system can be beneficial by generating most of your own electricity, which can significantly lower your business's electricity costs.
The payback period could be much shorter than you expect, at around two to six years depending on your location and your system. Additionally, with feed-in-tariffs, minimal maintenance, high reliability, government incentives and grants, and potential tax rebates, renewable options like solar are more attractive to businesses than ever.
2. Enhance brand and reputation
Businesses with sustainability and green credentials are often more appealing to prospective customers. Sustainable practices like utilising renewable energy can promote your business brand and reputation by giving consumers confidence they’re supporting a business with green values.
It also gives your business a way to differentiate itself from competitors, in your marketing and promotional campaigns. More generally, the stronger your business’s brand and reputation, the greater your level of consumer recognition. Additionally, you could use it to strengthen customer loyalty and credibility in your industry and in the marketplace as a whole.
3. Positively impact the environment
Businesses don’t need to wait for consumers or new regulations to make the right changes. As a business owner, you can take the lead and start minimising the impact your operations have on the natural world. The private sector accounts for the majority of economic activity and so businesses taking the initiative to use renewable energy can make a dramatic difference.
By simply switching to renewables, you can do your part to drastically reduce harmful emissions. From sea level rises and mass extinctions to storms and drought, this is an urgent issue that could come full circle for your business, given climate disruption is already costing the global economy around $1.2 trillion each year.
In other words, making a positive impact on the environment could in turn support a sustainable economy that fosters industry and your business. Doing your part to preserve the environment can benefit everyone in your business and beyond. It could strengthen employee morale and loyalty to your organisation. In addition to switching to clean energy such as solar, businesses can encourage recycling or zero waste, go paperless, and conserve energy.
4. Improve long-term profitability
A large percentage of company leaders agree sustainability contributes to the short- and long-term value of their businesses. Research from organisations like Harvard and Deloitte have shown companies that commit to green goals, like zero harmful emissions and switching to renewables, are financially outperforming their competitors.
This is in part because environmental waste is an effective way to identify economic waste, so reducing the first minimises the second. For example, when a company switches to generating its own power from solar panels, it’s indirectly eliminating polluting emissions through sources such as coal and cutting down its overheads at the same time.
5. Attract new customers
Consumers value businesses committed to sustainability, and a business that runs entirely on renewable energy could attract environmentally conscious customers. The majority of consumers believe buying ethically can make a big difference, and customers are willing to pay more if the brand is sustainable. Protecting the environment is one of the top customer values that could be driving your prospective market’s buying decisions.
All else being equal, communicating to prospective customers your business is powered by renewable energy can be the differentiating factor between you and a competitor. It could see you achieving greater brand engagement and higher sales.
Businesses can take the lead to shift to a more sustainable economy. Switching to renewable energy like solar is one of the easiest ways to do it, with government incentives and savings on your overheads significantly lowering payback times. Installing your own solar system is likely the most feasible way to do it as a business. However, increasingly energy retailers are offering accredited green power products, which might be based on wind, hydro, and other sources.
Other ways to leverage renewable energy include subscribing to green web hosting and servers for your business and working with other suppliers and businesses that rely on renewable power. By making these simple switches, your business could save money, attract customers, and inspire other businesses in the process.