Reduce Energy Costs for Your Small Business

Small businesses can save money and help the environment by using less energy. Here's how.

For small businesses, reducing energy costs can make a significant dent in monthly bills -- especially as the price is rising on gas, electricity, water, and other energy resources. Whether through simple changes or larger-scale investments, every business operation can do something to save energy. Cutting back on energy use will improve your bottom line and help the environment, and your greening efforts likely won't go unnoticed by customers.

This article can help you figure out the best ways for your company to save energy and put your plan into action.

Energy Audits and Online Calculators

For many businesses, the best way to begin saving energy is to get help from experts. Many utility companies provide free or low-cost personalized evaluations of how your particular business can implement cost-saving energy reductions. Often, this process involves an onsite visit to your business and a detailed evaluation of your energy needs, usage, and ways to save.

You can also take advantage of the many energy saving calculators that are available online. Plug in information about your business, and get specific suggestions for saving energy -- including an estimate of the up-front costs of implementing changes and how much money those changes could save you over time. Examples of online energy saving calculators include:

Energy Saving Tips

When it comes to saving energy in your small business's day-to-day operations, how-to tips abound these days. Here are some simple and easy-to-implement ideas.

  • Change all of your light bulbs to energy efficient compact fluorescent lamps (CFLs) and light-emitting diodes (LEDs).
  • Install motion detectors that automatically shut off the lights in lesser-used areas of your business.
  • Turn off lights when you don't need them.
  • Install skylights and make use of natural daylight.
  • Install power strips or other devices that effectively unplug computers, kitchen appliances, printers, and other electronics at the end of the day.
  • Install a programmable thermostat.
  • Replace old equipment with Energy Star appliances.
  • Install water efficient appliances, low-flow faucets, low-flow toilets, and high-efficiency urinals.
  • Install an energy efficient water heater.
  • Consider buying a laptop next time you need a computer upgrade (they consume far less energy than a desktop).
  • If you make deliveries or use vehicles frequently, combine trips to save on gas and consider using a Global Positioning System (GPS) system to find the shortest routes and avoid traffic.

Use Technology to Reduce Energy Costs

Businesses can also take advantage of new technology to reduce energy costs. For example, web cameras and accompanying software can allow companies to hold virtual meetings -- instead of driving or flying to meet clients or colleagues in distant offices.

Technology also allows business owners to create innovative and flexible work arrangements for employees. For example, by allowing two employees to work from home on alternate days, you can save money on overhead and equipment by having those employees split the use of an office, computer, and phone.

Educate Your Employees

Don't forget to educate your employees about energy saving policies you would like to implement in your business. Hold a meeting to discuss your expectations for reducing energy and waste, provide all employees with written guidelines on office policies, and invite employee ideas on how to further cut energy costs. If you approach the issue with the right attitude, most employees are more than happy to help the business and the environment.

Build Green

If you plan to build out a new space or a new building for your business, put energy conservation on your list of priorities. Investing in green technologies may be more expensive at the outset, but saves money in the long run. Examples of green building include:

  • using thicker drywall to prevent heating and cooling loss
  • installing skylights
  • using a low energy lighting system
  • installing solar panels
  • installing a water collection system that redirects drain water to landscaping, and
  • purchasing low energy appliances.

There are hundreds of other ways to green your business space and operations -- some cost almost nothing and others are more expensive. Consult with an architect or builder who has experience with the latest green business ideas and products. The government website has a wealth of information and lists of resources about green building design.

Tax Credits and Financing for Energy Saving Measures

Federal, state, and local governments may provide tax incentives when you buy energy saving appliances or equipment for your business or when you take other steps to reduce your energy use -- like adding insulation to your office space. Some public utilities offer rebates for these energy cutting measures. For information on available incentive programs, visit the federal government's Energy Star website at

There are also many financing options available to help you purchase energy efficient equipment and facilities. The Small Business Association has several loan programs, and there are lots of state, local, and regional programs that offer assistance to businesses seeking to improve energy efficiency. For comprehensive lists of programs offering loans, grants, and financing assistance for energy reducing measures, visit and type "Financing Energy Efficiency Projects" into the search field. To learn about financing through the federal Small Business Administration, visit

Market Your Green Efforts

Environmentally conscious consumers are eager to use businesses that make a concerted effort to cut energy costs. Laud your improvements in your marketing brochures or post information in retail spaces that discuss your energy saving efforts. Also consider joining a local green business group. You can get new ideas for saving energy and cutting costs, and you may be able to include your business in a green business listing. Savvy consumers may consult such lists when looking to patronize environmentally friendly businesses.

To learn more about ways to cut costs and save a struggling business during these trying economic times, get Save Your Small Business: 10 Crucial Strategies to Survive Hard Times or Close Down & Move On, by Ralph Warner and Bethany K. Laurence (Nolo).

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