December 18, 2008
One Last Chance: Starting a Green Business
by Scott Sklar, The Stella Group Ltd.
Q: I live in Michigan with my family. We have owned our own construction
business for over 10 years now, but with the economy we have watched
everything we built slip away and like many others, we now find ourselves at
a crossroad that we cannot deny. Either we try to wait for better days, or
we change course to something new. We have chosen alternative energy. But
after trying to weather the economic storm, we find ourselves in a place to
only have one shot to financially make the right choice. The big question is
which is the smartest direction to take in starting a alternative energy
business in the future. If your son or daughter asked you for advice in this
matter what would you tell them? Thank you for your valuable time. --
Christine, T., Mancelona. MI
A:
Christine,
In this harsh economic meltdown, literally hundreds of thousands of small
businesses are being pushed to the edge. My heart goes out to you. Energy
prices, primarily gasoline and in some cases natural gas, are also going
down in response to less demand due to this worldwide recession. And lack of
credit for businesses and consumers also tamper demand to those interested
in reducing energy costs, lowering emissions and being technology leaders.
So I am not surprised about the gloomy outlook for the alternative energy
market.
But, electricity prices are not lowering and in some cases still going up.
State and local government incentive programs are still active, you can log
onto www.dsireusa.org to find what incentives are offered. Because the
economy is so bad, tax credits and tax exemptions may have less influence on
market decisions because many businesses and individuals will not have large
tax liabilities they are trying to offset, which made clean energy
investments attractive.
So I would begin to focus my business to sectors receiving grants. In
Michigan, I see these State Grant Programs: Biomass Energy Program Grants,
Community Energy Project Grants, Energy Efficiency Grants, and Large-Scale
Photovoltaic Demonstration Project Grants, and one Utility Rebate Program
Wisconsin Public Power, Inc. - Renewable Energy Rebate. These areas would
deserve attention because grants bring in dollars directly for the consumer.
The energy efficiency market is underserved. Whether it's buildings —
insulation, double and triple-pane windows with low-e coatings, sealing
ducts, smart energy controls, solar daylighting and water heating, pv attic
vent fans and ground-coupled heat pumps, as well as water-saving
technologies — all have immediate payback for the customer.
There is also industrial efficiency including smart controls, the
aforementioned building efficiency applications, transpired solar and
solar-driven radiant and air space heating, as well as extremely efficient
motors, manufacturing controls, waste heat or combined heat and power
systems and the host of on-site renewable energy distributed generation all
make economic sense. States such as Michigan, are focusing on making their
existing industries more competitive and the incoming Obama administration
is expected to pump even more money into reviving our traditional industries
as they emphasize growth in the green industries.
Finally, both the federal government and state and local governments have
set goals for energy efficiency and renewables in their buildings and
facilities, which include both renovations and new construction. I would
contact the appropriate web sites for both federal, state and local
governments to get onto their RFP announcement lists, so you can bid on
projects. Governments are good clients because they have funds and will pay.
Teaming up with companies that have previously won construction and
renovation contracts is a good tactic if they have performed well in prior
instances. I have participated in many teamed procurements where I bring in
my specific expertise and rely on others for their areas of expertise.
The economic downturn will get better, and as the economy gets better,
demand for energy will increase and energy prices will again rise. I've been
through this seesaw several times in my life. Whether you cycle in or out of
the clean energy industries or stick through the ups and downs of this
industry, the future still looks solid for the green alternative energy
industries.
Best of luck,
Scott
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