How To Finance Energy Saving Solutions With No Out-Of-Pocket Cost

Posted by Jimmy Hovey on Tue, Apr 24, 2012 @ 10:04 AM

Why Finance Your Energy Saving Solutions?

3-reasons-why-you-should-finance-energy-efficiency-improvements

We typically don't have any problem proving to a business owner that an energy efficiency upgrade makes sense. 

We present all of the facts, show the owner savings, how quickly the project will pay for itself. 

"I don't have the money"

While there is no doubt that they need to do the project, we often run into "sounds great, but we just don't have the resources for that right now". 

We understand, we are in business too. The last 4 years has really taken a toll on a lot of businesses. 

If you have been presented with an energy saving solution for your business, don't throw it away simply because the money isn't there. 

Finance the Project

When most businesses borrow money, they look at the interest expense as an extra burden to the company.  That burden becomes the focus of a yes or no decision. 

Energy efficiency makes sense when the financing cost can be recovered from your monthly energy savings.

There shouldn't be any additional burden from the cost of financing an energy efficiency upgrade.

Here is why you should consider financing your energy efficiency project:

1-Free Up Precious Cash Flow

Energy efficiency projects will impact your cash flow in two ways:

Payout for the project

Keep your cash in the bank or for use in other areas in your business.  Energy efficiency can typically be financed very easily with a one page application. 

Buying equipment or other fixed assets is typically much more difficult.  Use your cash for the difficult stuff and save the hassle.

Ongoing annual savings

By financing your project, you will free up cash that is going away every month.  By getting your project done at one time, you are able to take advantage of all the incentives. 

Plus, you will see the immediate change in your energy bill. 
Reducing your energy bill is a great investment because you will save that amount every month for the life of the system. 

Depending on the size of your facility, that could be 10,000...100,000 or even 1,000,000. 

Just be sure to look at all the angles when making a financing decision.

2-100% Financing, No Out Of Pocket Expense

As I mentioned earlier, these projects can typically be financing with no out of pocket expense.  Why is that?

Energy savings can be proven with facts.  It is fact driven meaning that based on the specifications, your project will save you money if you use that product (For more information, take a look at an earlier article I wrote, "Watt's a Watt")

3-Payback with Energy Savings

Since the savings are a provable fact, you can utilize your energy savings to pay back the financing. 

The savings from your project should cover the cost of your financing (Exception: You may decide to pay down the project sooner, and take advantage of the freed up cash flow for other projects). 

Where to Find Energy Efficiency Financing?

Graybar Financial and US Energy Capital are two companies that I have checked out.  I haven't personally worked with US Energy Capital. 

I have worked with Graybar Financial. They are easy to work with and we typically provide a financing quote with every energy efficiency project that we present. 

The application is literally one page long.  The program they offer is a leasing program that allows for you to pay back the financing with the anticipated savings over a 24, 36 or 48 month term.

Is it worth it?

Jeff Crippen from Crippen Automotive in Lansing, MI is saving 12,000 kwh per month.  How much can you save? or you can learn more in our FREE eBook, just by clicking on the book cover below. 

business-owners-guide-to-energy-efficiency

Have you located other sources for energy efficiency financing? Let us know in the comments below.

Topics: energy efficiency services, energy efficiency opportunities, energy saving equipment, energy efficient financing, energy saving solutions, energy management consultants, energy saving consultants