With the formal adoption of the Sonoma County Energy Independence Program by the Board of Supervisors, many around the country will be looking to Sonoma County as a model for municipal leadership to increase energy security and reduce the county?s emissions of global warming greenhouse gases.
As the Business Journal has reported, this landmark program will enable homeowners and commercial property owners to receive 20-year loans from the county program, with twice-annual payments made via property-tax assessments, to fund energy-efficiency measures, insulation and perhaps the most talked about building improvement ? solar power.
With all this talk of energy independence and greenhouse gas emissions, another story could well be overlooked ? how this program can promote economic sustainability for the small and medium-sized businesses that drive our economy and represent nearly 90 percent of the county?s non-municipal employment. That?s because solar power is not only good for the environment, it?s also a powerful cost-savings tool in a way that?s not necessarily obvious.
If you eliminate your electric bill, it?s obvious you?ll save money. But if you have to make a twice-annual loan payment to the county on your property-tax bill, you may not save much money, if any. As a result, the decision to consider solar power is less about economics and more about brand-building or management?s personal philosophy. Our experience suggests this is where most business owners stop their analysis.
But with the available state and federal subsidies, including considerable production credits from PG&E, federal tax credits and accelerated depreciation, businesses get considerably more savings than just the electric bill they?re no longer paying. Solar power can turn an operating expense into a very large cash flow, and the new municipal lending program allows Sonoma County businesses to do this with no out-of-pocket expense.
For example, my company Sunlight Electric developed a solar-power project for a privately owned beverage distributor with just over 200 employees, which turned its $170,000 electric bill into more than $1 million in positive cash flow in the first year.
Last year, we installed a system to make Clover Stornetta Farms? fleet-maintenance operation solar-powered. I called my customer, Mkulima Britt, vice president of finance for Petaluma-based Clover Stornetta Farms, to tell him about the Sonoma County Energy Independence Program, and he told me a program like this would make him take a serious look at other energy-efficiency and solar projects to turn expenses into significant cost savings.
This cash infusion can provide resources for further investment in energy-efficiency and other cost-savings measures, allowing our small and medium-sized business to lower costs to endure the current tough economic times and the uncertainty that lies ahead.
For some small and mid-sized businesses, a municipally funded investment in solar power and the resulting improvement in cash flow could allow our local businesses to thrive when they may otherwise struggle. For others, it could be the difference between survival and becoming a victim of the deepest recession in generations. For all, it could mean not just saving jobs, but adding them.
So with all the talk of energy independence, conservation, reducing greenhouse gases and other inarguably positive benefits of the Sonoma County Energy Independence Program, county businesses should make sure they don?t overlook the potential for enhanced economic sustainability this ground-breaking program can offer.