Beyond the financial crisis of the moment, long term challenges and business opportunities remain, including energy efficiency. Wasted energy is a major drag on the US economy, and improving energy efficiency is a major opportunity. As energy costs steadily rise so does the incentive to save money by using energy more efficiently. Amory Lovins, cofounder of the Rocky Mountain Institute, has been talking for decades about energy efficiency as the cheapest and greenest energy resource that we have. Entrepreneurs are pursuing a variety of strategies to build businesses that make energy efficiency a reality, making money by reducing waste.
One opportunity is to improve the energy efficiency of buildings and verify the savings by creating energy efficiency certificates, or White Tags. White Tags are tradable certificates that can be bought and sold as one way for business or utilities to meet their environmental goals. Sterling Planet is moving the White Tag market forward, verifying energy efficiency projects and connecting buyers and sellers of white tags. In addition to highly developed markets in Europe, three states in the US have a market for mandatory White Tags where utilities are required to demonstrate energy efficiency. The voluntary market for White Tags is another opportunity for those seeking to offset their environmental impact based on efficiency projects developed elsewhere.
Energy Service Companies, or ESCOs, are a broad category of companies that go into buildings and audit their energy performance, then retrofit them for improved performance. ESCOs include large firms like Johnson Controls, a global building and consulting company, and these large firms are often focused on large projects.
Small businesses are also improving the efficiency of buildings. Sustainable Spaces in San Francisco works closely with each customer to assess and test their home and then identify the best strategy to help them improve. By looking at the building envelope, heating and cooling systems, lighting, insulation, and by considering the impact of renewable energy, they can help consumers save money and reduce their environmental impact, doing it in a way that makes the most sense in each case.
Many feel that the time of real estate sale transactions is the perfect opportunity to make homes more efficient. Thomas Conlon, the president of Geopraxis, is developing the EnergyCheckup program, recruiting real estate agents and home inspectors to provide a quick overview of how well a home is performing. The time of sale is an ideal opportunity and home inspectors are positioned to add this to their portfolio of factors they look at. Homes and their owners need all the value they can get, and the EnergyCheckup program may help them out, helping to attract the attention of realtors and buyers. As inspection of the energy efficiency when homes are sold expands and even becomes mandatory in some areas, there will be more opportunities for others to get involved.
Green Irene Eco-Consultants are pursuing yet another route, going out to homes to perform a 1-2 hour Green Home Makeover, examining home energy efficiency as well as looking for opportunities to reduce waste and exposure to unwanted chemicals. Each Green Irene Eco-Consultant works independently in their area with training, products, and other support to help them out. Their business model provides a simple, personal approach for consumers and an opportunity for entrepreneurial people to build their own business as Eco-Consultants with a flexible work schedule and minimal cost.
One difficulty overall is reluctance to spend money on energy efficiency. The bar for investment in energy efficiency is often set incredibly high, with people demanding a return on investment (ROI) in two years or less. This equates with an investment that yields 50% a year. Anything that can achieve a 50% annual return, and do it with little risk, is a great business opportunity. For the time being, there is plenty of wasted energy to go around for businesses that can make efficiency happen.