As California regulations and taxes drive up the cost of utilities, smart energy upgrades can help your bottom line
Small business is the backbone of the California economy. Yet, the ever-increasing costs of energy, combined with California’s increasingly-aggressive climate change regulations, create a costly piling-on effect for struggling small businesses across the state. According to the National Federation of Independent Business’s (NFIB) Energy Consumption poll, energy costs are one of the top three business expenses for one-third of small businesses.
The good news is there are proactive, innovative solutions that can help small businesses cut their energy costs and improve their bottom line. The Property Assessed Clean Energy (PACE) program empowers small business owners, or any property owner, to curb escalating energy costs by providing the often-unavailable financing tools needed for energy-efficient building improvements.
Given California’s climate change goals already on the books, making the PACE program available to all is vital now more than ever. PACE is a financing option that provides California homeowners and small business owners the ability to make energy efficient property upgrades. Through PACE, California businesses are able to achieve energy efficient, renewable energy, earthquake resiliency, and water conservation improvements that play a critical role in meeting California’s expanding greenhouse gas (GHG) reduction goals.
Energy efficiency is a powerful means to cut costs, which is critical for our small business’ bottom lines especially with our state’s increasingly aggressive environmental and tax policies, which so often are borne by our struggling job creators. For example, one-third of all small business costs are spent on heating or cooling, and another one-fifth is spent on the energy costs associated with operating equipment. Any improvement which reduces energy consumption helps a small business invest more into their business and employees.
PACE works and is needed to ensure increased energy costs will not continue to burden small business owners. In fact, since its inception in 2008, PACE has helped thousands of California businesses and homeowners secure the financing they need for increased energy and water efficiency while lowering utility bills.
Small business owners will be the first to tell you that it’s not just energy costs that are going up in California. Health care costs are expected to rise at least 20% next year. Minimum wage is going up every year. Worker’s compensation premiums unexpectedly spike, and don’t forget about that potential lawsuit that could be around the corner. Small businesses are buried under the piling-on of all these costs, but PACE at least offers a way to reduce the burden of rising utilities costs.
To date, PACE has financed more than 150,000 home improvements, has reduced total carbon emissions by 4 million metric tons and saved 10 billion gallons of water in California. Additionally, PACE has been instrumental in jumpstarting local economies by infusing $5 billion in communities across the state and creating an estimated 30,000 new jobs.
Viable financing options are critical to business success, but all too often, small business owners are unable to adjust the price of their goods and services fast enough to keep pace with the increasing energy costs without an impact on their customer base. Consumer protection also is an important part of this equation.
As a small business advocate in California, and across the country, understand how often protecting our members’ best interests and supporting robust consumer protections go hand-in-hand. In fact, in 2016, PACE providers led the way in discussions with the California Legislature to develop the most comprehensive consumer protections and disclosure policies in the nation, including standardizing disclosures and ensuring consumers do not take out more financing than they can afford.
Simply put, PACE works. Without it, small business owners would continue to see unending spikes in their energy bills, leaving a devastating impact on their bottom line. We know when small businesses thrive, California thrives. PACE is an important part of the puzzle in contributing to California’s economic well-being while meeting the state’s climate change goals. Our members need options and solutions to feasibly meet these goals without devastating their already slim budgets, and PACE empowers small businesses to achieve this.
Tom Scott is the State Executive Director for NFIB California, which represents 22,000 dues-paying small business members across the state.