Maximizing Energy Savings for Small Businesses

By tapping into a number of resources and financing options, small business owners can save significant money and energy, increase profits, promote their businesses, and cut greenhouse gas emissions.

Dollars saved through energy efficiency can directly impact a business’s bottom line and enable it to be more competitive in today's market. Many small businesses reside in commercial buildings smaller than 50,000 ft2, which consume 44% of U.S. commercial building energy use (nearly 3 quadrillion Btu annually). 

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The Benefits

There are three key reasons small business owners should improve the energy efficiency of a building:

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Increase Profits

Reduce operating costs and utility bills while increasing potential rental income and the overall property value.

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Promote Your Business

Enhance the marketability of your products, services, and brand image, particularly with environmentally-conscientious customers.

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Reduce Environmental Impacts

Reduce CO2 emissions while improving customer experience and comfort.

How To Do It

NREL helps small building and small business owners by demystifying the three-step processes and providing tools and resources needed to overcome obstacles to achieving building energy efficiency.

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Step 1: Contact a Qualified Energy Auditor/Contractor

To better identify the goals for your building and business, as well as the paths for achieving those goals, it’s always recommended to consult with a qualified energy auditor/contractor to:

Identify low- or no-cost energy savings opportunities

Benchmark building energy performance

Conduct and energy audit

Talk about the timing of building or equipment upgrades

Estimate your energy and cost savings potential.

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Step 2: Make a Business Case

After consulting with a qualified energy auditor/contractor and you are ready to put your business case on paper, focus on:

Positive and negative cash flows

Understanding the risks and how to manage them

Finding financial incentives for energy efficiency and renewable energy strategies

Researching financing options and other programs, including those offered by the U.S. Small Business Administration (SBA).

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Step 3: Find More Information

Once your business case is in place, get more information about available programs. Resources include:

  • State and Federal Financial Incentives: The Database of State Incentives for Renewables & Efficiency® (DSIRE) website is a comprehensive source of information on incentives and policies that support renewable energy and energy efficiency in the United States

  • Resources and Case Studies on Energy Efficiency: The U.S. Department of Energy's (DOE's) Better Buildings Initiative hosts a catalogue of resources to support the adoption of energy-saving building technologies that include simple steps to saving energy in commercial buildings

  • Small Business-Specific Resources: NREL's four-page guide helps small businesses understand the energy and non-energy benefits of energy-efficiency investments. These resources also help small businesses know what contractor and auditor qualifications to look for, identify low- and no-cost energy savings opportunities, and understand the decision process for energy-efficiency upgrades

  • Government Guaranteed Financing:
    • SBA's loan programs offer numerous opportunities to finance building energy improvement projects for small businesses
    • U.S. Department of Agriculture (USDA) programs provide funding opportunities for rural small businesses through loans, loan guarantees, and grants.

Explore additional financing options through DOE's Better Buildings Financing Navigator.

Key Resources

Here are quick links to top resources to help business owners achieve their energy-efficiency goals and save money:

NREL's four-page lender's guide with discussion on timing and low-cost methods for managing risk associated with energy-efficiency upgrades

NREL's borrower's guide and accompanying presentation

NREL's two-page guide on making the most of SBA's Grow (504) Loan Program

DOE's tax incentives information and design and decision support guides, available for free download

The USDA's Business and Industry Loan Guarantees program, Rural Business Investment Program, and Rural Energy for America Program Renewable Energy Systems & Energy Efficiency Improvement Loans & Grants.

NREL's Research

Significant work has been done at NREL around making small businesses and buildings more energy-efficient.

  • NREL provided industry research and recommendations for Small Buildings and Small Portfolios. NREL worked with the National Trust for Historic Preservations Preservation Green Lab to identify potential approaches and strategic priorities for the DOE Building Technologies Office to explore that support the implementation of high-potential energy efficiency opportunities for the small commercial building sector. A summary of the findings is available.

  • NREL conducted a pilot project, Reducing Transaction Costs and Analysis of Economic Risk, focused on overcoming two barriers to financing energy efficiency upgrades in small buildings: disproportionately high transaction costs and unknown or unacceptable risk. After working with Michigan Saves and Energi Insurance Services, NREL developed technical solutions that provide a quick and easy process to encourage energy efficiency investments while managing risk.

  • Research was conducted to develop Energy Efficiency Measure (EEM) packages for small commercial office buildings that achieve 20% energy savings cost effectively, the results of which are summarized in a simple spreadsheet tool called the Energy Efficiency Measure (EEM) Selection & Cost Evaluation ToolMicrosoft Excel. NREL worked to quantify performance risk and the uncertainty in cash flow associated with EEM packages that are designed and installed correctly. This analysis quantifies the effects of uncontrollable uncertainties that go beyond typical performance guarantees including variations in weather, occupant behavior, fuel escalation rates, and quality of preventative maintenance.