Strategies for Small Business Decarbonization

Why Energy Efficiency and Electrification Are Important for Your Small Business

Small business owners are no stranger to wearing many hats, but developing a plan for energy reduction and electrification could be unfamiliar territory.

When time and resources are scarce, making clean energy upgrades and efficiency improvements, such as installing on-site electric vehicle charging or attic insulation, can feel overwhelming. But these investments also align with many small business priorities: employee productivity, reduced overhead costs, and customer satisfaction to name a few.

There’s no one-size-fits-all approach to decarbonization – the process of switching from equipment powered by fossil fuels to efficient, all-electric technologies. From mixed-use buildings to commercial properties and leased spaces, let’s unpack how small businesses can prepare for an electrified future.

Take Stock of Energy Use

Knowing where to start can be a barrier to any project, even to business owners who see the value in making energy upgrades. Beginning with an energy assessment, also known as an energy audit, can benchmark current energy performance and identify energy-saving and electrification opportunities that are specific to a business’s needs.

These recommendations typically include expected energy savings and cost estimates and can range from immediate energy-saving improvements, such as air sealing windows or caulking doorways, to more complex upgrades like installing air source heat pumps.

Small businesses in New York can access funding through Green Jobs – Green New York or their utility to cover the cost of an assessment, or tap into cost-share support for a more in-depth, site-specific energy study through NYSERDA’s Flexible Technical Assistance (FlexTech) Program.

How to Plan and Prioritize Energy Investments

With an assessment in hand, small businesses have a basic framework to reduce their energy use and switch to clean energy technologies. If faced with a comprehensive list of improvements, it’s important to note that decarbonization is rarely an all-in-one investment. Rather, a phased approach that begins with energy efficiency to reduce consumption and optimize building performance before installing new, all-electric equipment offers a more feasible and cost-effective model.

The project cost and payback period are often top of mind when weighing options. When assessing costs, consider how decarbonization investments (both efficiency and clean energy) compare to the net present value (NPV) of continuing business-as-usual. This involves going beyond energy savings alone to factor in maintenance costs and lifespan of current equipment, among other factors, when evaluating the long-term cost of energy retrofit projects.

Inflation Reduction Act (IRA) tax credits and New York State incentives, including rebates, financing, and tax credits, should also inform decision-making, as there are equipment and contractor requirements for small businesses to be mindful of to ensure their project is eligible.

Business owners may weigh additional factors, such as indoor air quality and occupant comfort, when prioritizing decarbonization projects.

In any case, small businesses can get hands-on support from their Regional Clean Energy Hub to navigate their options. New York’s 12 Clean Energy Hubs have both technical knowledge and local expertise to assist businesses with program applications, comparing energy technologies, demystifying financing and incentives, and exploring workforce training opportunities.

Peeko Oysters , an aquaculture business on Long Island, was faced with high energy bills stemming from outdated, inefficient heating and cooling equipment used to maintain water temperatures for the year-round hatchery. While the challenges were clear, Peter Stein, Peeko Oysters’ founder, faced barriers getting started.

“I was lacking somebody to come in, at an affordable rate, to do an energy audit, and understand, ‘OK, here are the systems that you have today. Let me help you design a new system for what you can use going forward,’” says Peter.

This is where the Long Island Clean Energy Hub came in with hands-on support and local expertise. One of the Hub’s Community Energy Advisors walked Peter through the various assistance programs and connected them with a NYSERDA- and PSEG-Long Island-approved contractor to complete a no-cost energy assessment.

Following the assessment, the contractor is working to design a system to recapture thermal energy from heated water during the winter months to create a more energy-efficient hatchery operation. Peter also expects that future energy savings will allow him to scale up business – something he’s long wanted to do.

Looking more long-term, Peter plans to transition Peeko Oysters completely off fossil fuels and incorporate on-site solar energy to power the hatchery and further energy cost savings. “I'm a whole lot more confident now that I have somebody who's kind of in my court, on my team working with me, because I was really a deer in headlights trying to navigate all this stuff,” adds Peter.

Going All-Electric

Full electrification is possible today for most commercial building types and vehicle models.

Heating and cooling are generally the largest energy hogs for small businesses. Replacing fossil fuel heating equipment with heat pumps – a dual heating and cooling solution that’s efficient, all-electric, and effective in cold climates – can deliver energy and maintenance savings while enhancing indoor temperature control and comfort.

Matt Green, owner of Liquid Fables in Beacon, NY, says that improved comfort has been the greatest impact of their business’s mini-split air source heat pumps. “You can keep your customers comfortable without having to condition the whole space the same way,” adds Green.

Electric vehicles (EVs) and charging stations represent an opportunity to reduce business costs and attract a growing number of EV drivers, whether customers or employees. EV charging infrastructure is eligible for a 30% tax credit, potentially in combination with upfront discounts on level 2 charging stations through Charge Ready NY 2.0.

SRC, Inc. in Syracuse, NY, installed their first EV charging stations in 2013 and utilized Charge Ready incentives to expand their charging capacity, which now totals 30 chargers for employee use. “SRC wanted to be ahead of the curve when it came to accommodations for electric vehicles,” says Kevin Hair, President and CEO at SRC, Inc. “Offering this technology helps us demonstrate our commitment to being an environmentally sustainable business, attract top talent, and enhance the employee experience,” notes Hair.

As businesses electrify more equipment and building systems, installing solar panels and energy storage or subscribing to a community solar project can help save on electric bills while boosting resilience to outages and fluctuating energy costs.

Developing Your Decarbonization Strategy

Finding the time and resources to dedicate to clean energy and efficiency upgrades can be challenging amid competing priorities. Small businesses have an array of funding opportunities and technical assistance at their disposal to reduce energy use and improve their bottom line.

Developing a plan that aligns with your business goals can streamline efforts to begin saving energy today while working toward a decarbonized future.