How Going Green Can Help Finances
OCEAN CITY - When Scott Sklar was planning the offices of The Stella Group, his five-person strategic marketing and policy firm, he put his company's expertise in eco-friendly work environments to work on the new headquarters' design. A $20,000 investment in solar shingles and a wind turbine reduced his monthly energy bill to $70 a month •€' about a quarter of the local utility's typical rates. This enhancement, along with tax credits and accelerated depreciation for energy-efficient roofing, let the Arlington, VA company recoup its entire investment in only seven years.
Both federal and state incentives are making such eco-friendly small businesses more viable than ever. "The Small Business Administration (SBA) and other federal agencies have issued some very nice directives," says Sklar. "It is almost imprudent now not to do it."
Many of the tax- and cost-saving energy incentives result from The Energy Policy Act of 2005, and many states also offer tax-credit and grant programs as well. (Visit www.dsireusa.org for a comprehensive list.) As a result of both federal and state incentives, says Sklar, "Businesses in some regions are effectively paying just 10 to 20 cents on the dollar for these eco-friendly systems."
What Going Green Means
Some of the typical energy-efficient overhauls include building or renovating facilities; installing double-paned argon-filled windows, reducing lighting usage or installing green heating and cooling systems; and installing solor water-heating and electrical systems.
And even more simple ways to implement eco-friendly upgrades can help cut energy costs. For example, compact fluorescent bulbs use 75% less electricity than standard bulbs, while reducing the output of air-conditioning systems by 10%, as they burn cooler than traditional lighting. Other resource-conserving devices such as low-flow toilets and automatic faucets pay for themselves within 18 months.
Congress is working on legislation which, if approved, will support those small and midsize companies who plan to make their companies eco-friendlier. For additional information on federal tax programs, visit www.sba.gov/advo.
Incurring any new costs is always serious business. But with more and more attention being paid to alternative fuels and eco-conservation, the incentives to go green •€' both financial- and value-based •€' make sense right now.
(A Merrill Lynch Senior Financial Advisor. She can be reached at 410-213-8520.)