Onsite Utility Services – No Investment, Just Utility Savings
This article was original published for the Talkin’ Green column in the Lake Geneva Regional News Real Estate Guide. Download a copy of the column from the Lake Geneva Regional News Real Estate Guide.
Imagine if the utilities supplied your lights, hot water boilers and furnace and all you had to do was pay for the lumens, hot water, heating and air conditioning at a rate less than you currently pay. There would be no investment required – you would simply contract for the actual energy that you use onsite. In addition, the ongoing maintenance and/or replacement would be included at a rate that would save you money from day one. Now think about how our utilities, also known as Investor Owned Utilities (IOUs) currently operate. They send you raw energy in the forms of electricity or natural gas and you need to purchase all the equipment to convert that raw energy onsite so you can have heat, cooling, hot water and light. You are also required to do all the ongoing maintenance and then replace the equipment when it fails. Whether you are a business, a school, a retail store or grocery store – the current IOU system continues to take capital out of your bottom line, your community and your local economy.
But what if your local school could get a lighting upgrade, using energy saving technology with no capital expense and then get charged a rate lower than they currently spend for the same service? That saved capital can be used for other educational needs such as computers, lab equipment and more, instead of buying and maintaining equipment. The monthly savings could help cover salary increases or capital building improvements for the school, instead of asking the school’s community for a tax increase. It’s possible with Onsite Utility Services and companies that offer Energy As-a-Service.
The New Sharing Economy
While investor-owned utilities or IOUs, continue to create ways to keep customers using more energy while they enjoy a guaranteed return on investment, onsite utility services are starting to appear more and more, offering savings with no investment and no debt, one building at a time. The IOUs know there are other competing companies with similar models as their own, but they don’t feel threatened because those competitors are in the wholesale market and rely on the IOU’s distribution system, keeping their monopoly safe. Capital and debt have been the one limiting factor for building and business owners to reduce energy consumption or generate power onsite. Utilities have access to capital and debt markets allowing them the opportunity to maintain the status quo. Businesses and building owners have always had to choose between saving on utilities or using that capital and debt to grow their business or keep their main focus of education. What the IOUs didn’t plan on however, is the growing market of Energy As-a-Service with onsite utility services, slowing down the consumption of the utilities’ distribution through efficiency improvements or onsite generation with no investment and no debt for the business. The concept of no investment energy savings is the same concept that has grown solar energy, Uber, software and even Airbnb. The old paradigm of energy supply with the utilities in charge of your wallet is changing. People are beginning to realize the benefit of paying for only the actual service they need, and reducing the amount of raw energy they need while not maintaining the equipment.
Onsite utility services can provide the conversion equipment onsite where you actually need it. There is No investment and no debt. For commercial buildings and schools, no money in the budget is still the number one reason that energy improvements don’t happen. Everyone has capital budget constraints. The small retail store owner has to look at his bottom line and make the decision: do I buy the lighting upgrade which will eventually give a payback or do I want to keep the money to expand inventory and grow the business?
Onsite utility services will be coming to a community near you for businesses, schools, and government buildings. In addition, rural co-ops are experimenting with Pay as you Save tariffs which allow for home energy upgrades paid for out of savings. Ultimately both of these concepts will create savings and local economic growth because each helps more money stays in the local economy. Capital can be saved to grow the local economy. Change for the better is coming and entrepreneurs are bringing the new utility model to communities across the country.