What if there was a way to save money at your business, create jobs locally, promote local economic development, improve your business's sustainability and lower its environmental impact all at once?
There actually is such a thing, and it's as simple as energy efficiency improvements. And there are a lot of people and programs already working to create more energy efficiency in northwest Michigan, so it's not as difficult as it once was to make that step toward a more energy-efficient home or business, or public building.
"There is widespread consensus there is a need for investment in energy efficiency," says Brian Beauchamp of the
Michigan Land Use Institute. That's evident from the number of local partners already backing programs like
TC Saves and other proposed energy improvement programs like the state of Michigan's
Better Buildings Program: they include the Michigan Land Use Institute,
SEEDS, the
Traverse City Chamber of Commerce, the
Northwest Michigan Council of Governments and
Northwestern Michigan College.
A recent report this summer from the Michigan Land Use Institute and the non-profit SEEDS in Traverse City outlined the impact energy-efficient upgrades can have in economic terms. It particularly studied commercial businesses and public buildings, which stand to gain more from being energy efficient than a residential home.
The savings is already a proven fact; in 2008, the state of Michigan passed a law requiring Michigan energy utilities to help their customers use less electricity and natural gas through incentives for efficiency improvements. Some of the local participating utilities include
Cherryland Electric and
Traverse City Light and Power. Statewide, as of 2010, the two biggest providers,
DTE Energy and
Consumers Energy spent $113 million on incentives and investments to improve energy efficiency. It's a big number, but so is the amount of "avoided costs" that those companies and their customers will not have to pay over the next nine years as a result: $554 million.
When savings like that translates to businesses and local governments, that could be a lot of money freed up for other projects, investments or profits.
"Energy that is not used in the production of goods or services directly impacts the bottom line of a company and helps the existing utility infrastructure meet growing demands," says Laura Galbraith, VP of administration at the Traverse City Chamber of Commerce. "Each business that reduces the percentage of energy used in production keeps a larger percentage of their revenue in the local community helping the overall economy."
Beauchamp says the report focused on local economic opportunities for energy efficiency improvements, and strategizes what the local financial impact of various energy-saving steps would be. One of those impacts is the creation of more than 100 local jobs directly from energy efficiency programs in Traverse City.
"Frankly, we used very conservative numbers looking at job growth," Beauchamp says. "Many more ripple down as businesses are able to grow as a result of the improvements."
The word is out to some of the right people already; the institute held a conference this summer with community leaders, government officials and business leaders to present the report's findings and inform the public of the impact energy efficiency can have.
One business-focused program led by the Traverse City Chamber of Commerce has already had quite a few takers, says Galbraith. It's a low-interest, micro-loan revolving fund designated for energy efficiency; the chamber itself put up $50,000 to start things off.
"The fund provides low-interest micro-loans for businesses located in Antrim, Benzie, Grand Traverse, Kalkaska or Leelanau counties that are investing in energy-efficient measures identified through a comprehensive energy assessment or audit," says Galbraith. She adds that commercial and industrial users can have the biggest impact by improving efficiency, because they use the most energy to start with--and Traverse City-area businesses are responding well to the offer.
"The chamber has had an overwhelming response to its energy efficiency fund," she says. "Within one month, we are close to the $50,000 in loans issued and are actively seeking more capital to replenish the fund."
Cone Drive is one example of a northwest Michigan business making improvements on their own, says Beauchamp. The company saw the savings as an investment in its business, he says.
Galbraith has another example: one of the local businesses that has used the chamber's energy efficiency loan fund.
"The economic impact is an improved bottom line and more cash flow to increase job growth or invest in new projects and services," she says. "I can share with you the total savings one of the chamber’s business customers received with its energy efficiency project. The total cost of their lighting revamp is $14,500. The first year savings on electricity is $4,500 plus a tax incentive of $5,000."
So the improvements will pay for themselves in just a few short years, and ultimately make it possible for that business to be more successful in the community.
There are other loan funds, grant programs and incentives available, including one specifically for Michigan food industry companies like restaurants, says Beauchamp, but the question now is how to increase the amount of money available, and get it flowing to those who are willing to make the needed improvements.
One successful residential energy efficiency program is TC Saves, which started as a pilot program in just a few neighborhoods, but this summer, became available to all Traverse City residents. Incentives are offered until the end of 2012 to homeowners who undergo an energy audit and make the recommended improvements, with the help of local contractors and utility providers.
"So now, how do we continue to sustain TC Saves with local partners once the grant cycle is completed?" says Beauchamp. "We need to bring finance opportunities on board, and we're looking at how to bring local leaders into the fold as well, and demonstrate that there is a market for energy upgrades."
What you might call a TC Saves for businesses is also under development, called the PACE program. It's already a success in Ann Arbor, and Beauchamp says a Traverse City version of the incentive and support program could be up and running within the year.
"We're looking closely right now at the development of a PACE program here in Traverse City," he says.
PACE stands for property-assessed clean energy, according to the MLUI report, and the program would provide small loans between $10,000 and $350,000 to businesses for energy-efficient projects. Instead of traditional payments, the businesses would pay special property assessments over a period of years. In Ann Arbor, a PACE program has attracted more than $700,000 in loan applications. The report indicates a PACE-type program also could work well with residential homes, since homeowners often find it more cost-prohibitive to upgrade to clean energy.
Other strategies suggested are retrofitting old equipment or energy systems, or, similarly, "retro commissioning," which involves a review of existing systems to find energy leaks that can be addressed through better design, new installation, or minor repairs and tune-ups--the type of low-hanging fruit that can be quick and easy to fix, and most of all, cost-effective. Retro commissioning just half of Grand Traverse County's public buildings would save more than $1.8 million over 30 years, for an investment of about $460,000, according to the report.
Beauchamp says the next step is to envision what should happen in the next three to five years, and create a structure for improvements to happen on that scale.
"The good news is there's widespread support. No one is saying that energy efficiency is a bad idea--whether you come at it from an energy standpoint, a jobs standpoint, an economic development standpoint, or a sustainability standpoint," he says.
Kim Eggleston is a freelance writer and editor based in the Upper Peninsula of Michigan. A Northern Michigan University graduate and Marquette native, she also is the managing editor of Marquette Monthly.