Is the hobbled and largely stagnant economy pushing companies nationwide and in Nevada to become greener?
Well, yes, if they can cut costs by being more energy efficient and recycling. And, well, no if it means having to submit to government arm twisting to use new processes and technologies that raise rather than lower costs.
“There are two sides to the answer, which go in opposite directions,” explains Geoffrey Lawrence, Deputy Policy Director at the Nevada Policy Research Institute in Las Vegas, a free-market think tank that seeks private solutions to public challenges facing Nevada, the West and the nation. “The first is that there are a lot of cost-saving measures that an individual or a business can implement, a lot of them being in the category of energy savings and efficiency measures, like fluorescent lighting or upgrading the HVAC system.” From a pure cost standpoint, he continues, “if you make a one-time investment and you expect to recoup those costs within a four- or five-year time frame that makes sense for a lot of people — and it makes sense without any government incentive.”
On the other side of that equation, Lawrence says, are all of the renewable mandates that have appeared at the state level together with many federal subsidies. “All that really does is this: by compelling rate payers to invest in these technologies that are really most costly it just elevated rates, especially over the medium term.” He predicts Nevadans will see higher electricity prices as a result, which has the net effect of rendering the state relatively less competitive compared to several of the surrounding states “that either do not have an RPS (renewable portfolio standard) or have a less aggressive RPS.”
“Obviously, with the tough economy I think everybody is looking for ways to cut costs,” says Joe Burkel, Area President for Republic Service of Southern Nevada. “In many ways, becoming greener facilitates that – from a recycling perspective to ways to reduce energy and water use. It’s being green, but it’s also cutting costs at the same time. Recycling obviously cuts some cost. It’s being green that makes good economic sense.”
Many still have a perception that going green means raising, not lowering costs. Burkel begs to differ, noting that there are “some very good, common-sense approaches to being green that make a lot of economic sense. Energy-efficient lighting, motion sensors that turn off lights when nobody is using the office, efficient air conditioning, water conservation, reusing materials and obviously the one that we’re very close to is recycling – repurposing what used to be considered waste.”
That said, some of the newer green technologies can, indeed, raise costs “because the technology isn’t fully developed,” Burkel concedes. “Some of the alternative energy solutions can be a little more expensive.” The decision to go with these cutting-edge technologies becomes a matter of looking at the net investment in a project versus its return; some green efforts “simply don’t have that return yet.”
How much businesses can save through recycling varies, naturally, based on the size of the business and the types of materials they generate. “It’s hard to arrive at a figure,” Burkel admits, “but I can tell you this: it will always save more than it costs, so it’s definitely cost effective.”
Annette Bubak, President and co-founder of Nevada ENERGY STAR Partners–Green Alliance, believes the shape of the economy has “absolutely” motivated Nevada companies to go greener.
“The interest on the part of business owners,” Bubak says, “is in seeking ways of not only becoming more responsible from a sustainability perspective, but also helping lower and reduce their operating costs. It’s a win-win for both situations immediately.” Bubak also serves as Vice President of Better Building Performance, which provides sustainable energy solutions that allow home and building owners to maximize their energy efficiency through better technology and building science. Through its core business of high-performance contracting, the company provides customers with innovative ideas for modernizing their homes.
Lawrence says he’s not sure whether or not economic conditions have made Nevada a greener state. “I would assume that the level of energy efficiency is probably increasing, though I don’t have any data to back that up.” That said, he adds, the current state of technology for most green energy-producing facilities “is still not cost competitive. If we’re becoming any greener in that respect it’s probably just because of government intervention.”
And Lawrence is no proponent of government intervention. In a recent column posted on his group’s web site, he noted:
“Politicians have long sold the myth that the national and state economies would one day be rescued by “renewable” energy. For years, however, a fundamental problem kept these politicians from achieving their goal of making renewable energy culturally dominant: Freedom. Electricity generated by so-called “renewable” sources like solar panels is far more expensive and less reliable than electricity generated through traditional means such as nuclear, coal-fired or natural gas-fired power plants. Confronted with this basic fact, consumers, when given the choice, have chosen not to pay more for electricity generated by solar panels or wind turbines.… Politicians attempting to foist a renewable-energy culture upon an unwilling public claim that the high cost of renewable energy will decline — if only they guarantee a market to renewable energy companies by forcing consumers to buy their product. Politicians, however, have been showering renewable-energy companies with taxpayer-funded corporate subsidies for decades and the costs of renewable energy remain high. According to the U.S. Department of Energy, these costs will remain high into the foreseeable future even with the vast array of subsidies and mandates now in place.”
Green is ‘Cool’
Tracy Skenandore, Republic’s Area Director of Marketing, says she and her colleagues have seen a “big increase” in companies that want to use going green as a marketing tool. “We’re seeing a big influx of that, which is great, since obviously we want companies to go green. We have a lot of our customers asking, ‘How do I market myself as a green company the right way?’”
Republic responds to such requests by partnering with them: supplying appropriate signage and helping to educate employees and customers about their green initiatives. “We’ve seen a huge interest in recent years to use it… to set businesses apart from their competition.”
“One thing we’ve seen in general in society is that for a while after the recycling efforts started there wasn’t a lot of effort to support it from people looking to buy products with recycled content or doing business with a company that was green,” Republic’s Burkel relates. That attitude, however, has changed. Today, he points out, “many people are looking for ways to do business with green companies. Green is cool now.”
In Southern Nevada and other areas of the state, says Burkel, there are few environmental regulatory requirements for government buildings. “But we’ve seen a lot of moves to being greener with the government buildings, again, because the public demands it and expects it.” In his view, this voluntary move to greenness is “probably more effective than a regulatory requirement anyway. People are doing it because it makes sense and because it’s the right thing to do as opposed to simply complying with a regulation. I think you start to see people work more in the spirit of what we’re trying to do that way, rather than doing the bare minimum in order to comply with regulations.”
“I know that as they’ve gone along creating new codes for residential and commercial buildings they’ve been pushing and been more aggressive from that viewpoint,” adds Bubak. Regulators, she adds, have been “pushing the envelope, raising the bar as far as new construction is concerned.”
As for other states that have moved to fairly strict green requirements, says Burkel, “I think that can lead to some of the technologies that are not as cost efficient or don’t work without taxpayer influences such as grants. We haven’t seen that, but we’re seeing a fairly strong green movement both in the public and the private sector — again, because it makes sense.”
When it comes to private buildings, adds Burkel, “There are some recycling goals and targets, but other than that it’s not mandated. Early on there were some LEED certifications. But we’re seeing many, many privately owned buildings looking to green up. They’re doing it because it works for them: they’re looking to reduce costs and do the right thing at the same time. To me it’s just a great combination.”
‘Incremental Gains’
Nevada firms are making incremental gains, Bubak reports, in their ongoing efforts to grow leaner and greener. “What you’ll find is that you will see little levels that folks are going through. There are a lot of really low-cost opportunities. They can just go in and do a survey of their buildings and undertake a lot of do-it-yourself and behavioral changes.”
Case in point: lighting. In a commercial office building, Bubak notes, lighting is usually one of the biggest energy consumers. “By putting occupancy monitors in rooms that aren’t always in use – such as copy rooms, break rooms, rooms that don’t need to be lit all the time – they can reduce the usage.” Businesses can also make sure that areas such as those aren’t over-lit. “A survey can tell if you it’s feasible to reduce lighting levels.”
Another example, says Bubak: “Take a look at all the different electronics that are being used, such as computers, printers, monitors, anything that draws electricity. It’s just a matter of becoming more aware of what they’re drawing. Are they being turned off at night? Are they being turned off when the employees take a break to go to lunch? Those are little things that certainly add up. There is a whole list of things that can help folks begin to take responsibility, again with no cost. It’s just more of an awareness.”
An additional and often overlooked benefit, firms have found, has been improving the work environment for – and thus, the productivity of – their employees. Says Bubak, “What they’ve found as they’ve gone along and created these better environments for their employees is that it just creates a better indoor air quality. You get a better performance out of your employees because of that, and it’s just been a nice little movement.”
Air conditioning, heating and water-heating systems and the like — the larger systems that tend to draw more energy – are all being honed. “There has been a lot of attention to those,” Bubak says. “And then of course making sure they’re properly insulated using high-performance windows. Those types of features in the way that they construct commercial and residential buildings is where they’ve been putting a lot of their attention.”
The key remains increasing awareness, Bubak points out, “and then also to help motivate through different approaches – tax credits, incentives through the utility company, etc. There is a lot of opportunity that way.”
Earning Green by Going Green
One of the Nevada firms that has found a way to turn being green into earning green is Innovative Systems Group (ISG) in Las Vegas, which provides energy-efficient lighting products and services, offering options that significantly reduce costs and save on natural resources and works exclusively for homeowners associations. There are at present, says Michael Dyck, ISG’s founder and President, about 17,000 gas lamps in front of single-family homes and apartment communities across Clark County. “They cost about $18 to $20 each per month, so you’re looking at about $200 per year per lamp just to run the gas.”
ISG, and companies like them, work to cut costs while improving the environmental impact. “The demand came to me four years ago,” recalls Dyck, a 20-plus year veteran of the construction business who has contracting licenses in California and Nevada. “I was told, ‘Michael, these gas lamps are too expensive, is there a way you could help save us some money?’”
Dyck developed a solution that converts those gas lamps to low-voltage electric. “We now have an LED solution that takes that $200 a year and makes it $5 a year.” Indeed, he estimates the carbon dioxide emissions from a single 284 BTU fixture is about 1,800 pounds per year per lamp. “These are 8-foot-tall lights with a four-sided lantern head on top and a pair of mantles burning inside. My company has actually converted over 9,000 in the last four years. We’re able to take 1,800 pounds of carbon dioxide a year and make it about 30.”
Looking ahead, ISG plans to continue doing additional energy upgrades. Says Dyck, “You drive into a grand entrance of a community – maybe they have a guard gate, maybe they don’t – and all the trees are lit up. We take all those incandescent bulbs and convert them to LED.” It’s proven a good business, not just for the company but for all of us. As he points out, “We have about an 80% energy savings.”
The Future
What does a future hold in the face of what many predict will be a persistently stagnant economy?
Burkel brushes such questions aside. “I think that whether the economy improves appreciably or stays the same, good business is good business. Companies will continue to exploit our move towards greener methods all the way through their business plan because customers are demanding it and because it makes good economic sense.”
The economic prognosis for the foreseeable future – little change, with continued stagnation — will, Bubak says, “hopefully keep people motivated to continue to reduce their own impact, to reduce their operating costs, and making investments in their own buildings so it becomes an investment in the bottom line. I think that awareness is what’s driving a lot folks. They want to be part of the solution, and I see that happening at a higher velocity now than I’ve ever seen.”
The missing ingredients in the whole discussion may well turn out to be time passing and government butting out. “I think that the bottom line is that yes, over the longterm it’s probably feasible that renewable technology will eventually start to become more cost competitive, and even start to phase out some conventional resources,” Lawrence concludes. “But that’s in the long term. I think government policy to force that conversion ahead of the markets really just damages our economic output, at least in the short term.”
All in all, the use of greener technologies and resources will be used more and more by companies in the coming years. While the environmental aspect of going green will remain a large part of the draw for many businesses, economic concerns will be an additional incentive for companies to make a greener switch as they look for innovative ways to cut costs.
