It's Easy Being Green

Rising to the Challenge

Miami Beach, Florida, restaurateur Sylvano Carrara was getting an electric shock every time he opened his energy bill. In October 2005, he paid $2,500 in natural gas and electricity costs to power his 1,600-square-foot Italian restaurant, Sylvano Restaurant and Bar, located just five blocks from the ocean in touristy, sweltering South Beach, Florida. "That's a lot of money," says Carrara, 45, who estimates energy costs him half as much as his rent each month.

A year and a half ago, Carrara called his electrical utility, Florida Power and Light, and requested a free energy audit of the restaurant's electrical system and usage patterns. An FPL energy specialist came in and used various tools to gauge the restaurant's air-conditioning system, lighting and kitchen equipment to see how the 20-employee business could lower its energy bills.

FPL recommended that Carrara buy a more efficient AC unit and install compact fluorescent lighting that uses less electricity. Carrara had just installed new lights, however, and a new AC system would have cost at least $4,000--not including business that would be lost during the renovation. Energy efficiency wasn't the first thing on his mind, or the salesperson's mind for that matter, the first time he shopped for lighting. "If the [salesperson] can tell me, 'If you use these lights, you'll save money in the long run because you'll consume less electricity,' then I definitely would have considered buying the more expensive lights," says Carrara, whose restaurant had sales of $1.3 million for 2006. "But you're lucky enough if [the salesperson] knows how the lamp works."

These days, Carrara turns off the lights in the restaurant during the day and leaves only some air conditioning on in the kitchen overnight so the high humidity doesn't damage the food and refrigerators.

Carrara's story is one example of the challenges facing business owners when it comes to energy conservation. The energy issue is complex, and it's easy to bypass the $20 energy-efficient fluorescent light bulb for the $2 pack of traditional incandescent bulbs. Of course, for some, it's even easier to do nothing at all.

Chandler thinks business owners have to start factoring energy costs into their leasing decisions and making energy efficiency a negotiating tool. "It's going to be incumbent upon small-business owners to take [energy usage] into consideration when they're looking at space and say, 'With all things being equal, how can I work with the owner of this building in terms of energy conservation so it can be a win-win for both of us?'" Chandler says. "But unless small-business owners [bring] this to the forefront of their minds in contemplating a space, it's probably not going to happen anytime soon."

Entrepreneurs who make energy-efficient products, meanwhile, face their own challenges. The production tax credit for wind power has expired three times in recent years. These kinds of stops and starts in the U.S. renewable energy market have slowed adoption of energy-saving alternatives compared to some European countries. "If you've got a booming market in Germany for solar and a struggling market in the U.S., then you're selling product in Germany, and you're frustrated that there's not a better market right here at home," Eckhart says. He predicts healthy sales for solar power this year thanks to a new 30 percent federal tax credit for companies that install solar power by December 2008. "The question is, Does it continue, or because [there is] a two-year sunset on that incentive, does the market crater in two years?"

Meanwhile, as this year's Earth Day comes and goes, entrepreneurs like Chandler ponder the positive impact their growing companies can have on the environment. This year, Tactics plans to join One Percent for the Planet, a group whose members contribute one percent of their annual sales to environmental groups. "That is going to be a big step," Chandler says. "The more companies can think outside of next quarter's earnings, the better it would be not only for the planet, but probably also for [the entrepreneurs] in the long run, whatever company they're building."

Test Your E-Q
What's your energy quotient? Find out with this quiz.
(Hint: The more you answer "no," the more energy-efficient practices could benefit you.)

  • I know what kind of fluorescent lighting my business has and how efficient it is overall.
  • I read more than the total due on my electrical bill. I want to know what everything means, and I've called my utility when I don't understand a certain item.
  • I've contacted my electrical utility to see if they'll conduct a free energy audit of my company's energy usage.
  • I've asked the owner of my building about a tenant improvement allowance so I can make some efficiency upgrades over the next year.
  • My company has made at least one energy efficiency upgrade in the past 12 months.
  • I look for products that conserve energy and I am willing to spend slightly more for energy-efficient models.
  • It bothers me when people leave equipment running that isn't being used.
  • Energy efficiency is a driving factor in my leasing decisions; I'll only rent a space if the landlord has taken steps toward conservation or offers a tenant allowance for energy efficiency upgrades.
  • I've invested in a programmable thermostat that keeps the temperature constant and automatically turns down the heat or air conditioner overnight.
  • I've posted a company energy usage policy in my workplace that tells employees when to shut off lights and equipment, and how the thermostat should be set. I want my employees to take energy conservation very seriously, and I reward them for their efforts.
Chris Penttila is Entrepreneur's "Smart Moves" columnist
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Chris Penttila is a Washington, DC-based freelance journalist who covers workplace issues on her blog, Workplacediva.blogspot.com.

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This article was originally published in the April 2007 print edition of Entrepreneur with the headline: It's Easy Being Green.

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