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Can small business save the planet?

Entrepreneurs will solve our energy woes, a Washington advocate argues.

By Byron Kennard

Washington, D.C. (Fsb.com) -- By now, virtually every American supports the goal of national energy security and nearly two-thirds of us, according to a recent Harris Interactive poll, believe that human activity is responsible for climate change. So everyone agrees on the goal: to reduce our reliance on fossil fuels that must be imported and that are responsible for greenhouse gasses. But there is no consensus on how to get there.

Two paths to energy security are being debated. One involves big technology; the second is based on small companies' innovations. The first approach requires big oil and gas development in the U.S. (including opening up the Alaska's Arctic National Wildlife Reserve to drilling), nuclear power, and clean coal research, which will cost billions of dollars and take decades to deploy. The second strategy pursues vastly increased energy efficiency and widespread deployment of renewable energy technologies. This route, favored by environmentalists, also serves the interests of small business.

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Byron Kennard

Energy efficiency, one venture at a time

Every single small business in the nation can profit by making its own workplace more energy-efficient. According to the EPA's Energy Star Small Business program (energystar.gov), small firms can save between 20% and 30% on their energy bills through off-the-shelf cost-effective efficiency upgrades. The tools are available now: Installing programmable thermostats, compact fluorescent bulbs and Energy Star-compliant computers and office equipment.

Some energy-guzzling businesses can realize even more significant savings. For example, a venture in Berwyn, Ill. that bills itself as the "World's Largest Laundromat" relies on hot water provided by 36 rooftop solar panels. It contains 153 washers and 148 dryers and operates 24 hours a day. At a cost of $150,000, this hot water system was installed to combat monthly heating bills as high as $13,000. That was the equivalent of 25 percent of the business's total monthly revenue. The owner calculates that the system saves him $25,000 annually.

Small business, big opportunity

As the nation gets more serious about conservation, entrepreneurs are already swinging into action to produce energy saving products. And tens of thousands of small concerns will be needed to design, manufacture sell, install, and service energy-efficient heating and air-conditioning systems, lighting and other equipment.

The long-term solutions to America's energy and environmental challenges will involve renewable energy. This, too, will be a boon for thousands of small businesses. That's because the clean tech companies producing innovations in solar power, wind energy, and so on are mostly small. And when the results of their labor become available, other small enterprises will sell, install, and service the products that use them.

Small business owners, perhaps more so than consumers or big business, need to have a strategy to cope with the changing energy landscape. They are less able to absorb price increases and less likely to have alternative sources of power to continue operating during brownouts and shortages.

In this situation, the issue of scale points the direction to an effective response, both technologically and politically. In his classic book, Small is Beautiful (1973), E. F. Schumacher assets that small-scale technologies are intrinsically better for the environment than big ones. That now seems to be true for small businesses as well. This confluence creates new political common ground between small business and environmentalists, major forces in America that have not always been on the same side. Elected officials and policymakers who are considering measures to promote energy independence should pay heed.

Byron Kennard is executive director of the Center for Small Business and the Environment (www.aboutcsbe.org).  Top of page

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