SCARBOROUGH – I am now old enough to have experienced four economic recessions. (There actually was at least one more than that, but in my much younger years, it didn’t seem to matter).

One of the things that I’ve learned from this experience is that as hard as life seems during these events, recessions do in fact end. Life goes on.

As a business owner, another thing that becomes apparent is that businesses who intend to survive recessions must become as competitive and efficient as possible. The strongest survive.

Laurie Lachance, president of Maine Development Foundation and former Maine state economist, recently said: ”Energy prices will rise and we will not be able to predict with any degree of accuracy exactly when or the speed with which it will happen.”

Jonathan Reisman, associate professor of economics and public policy at the University of Maine at Machias, in his prediction for the year 2010, was quoted as saying: ”Recovering Indian and Chinese economies and tensions with Iran will push oil back toward $150 per barrel.”

Government policy at both the state and national levels is in agreement that one business cost that needs to be reduced is energy use. Even if your political or personal views do not agree with the global warming or climate change theories, hardly any owner of a business would argue against the need for operating cost reduction, achievable through improved energy use efficiencies.

And even if all of the climate change theory proponents turn out to be wrong about the carbon impact to our world, it would be difficult to find many of us who would argue that we should not be trying to reduce our dependence on foreign oil and should not be working to reduce inefficiencies in businesses.

I was recently speaking to an executive of a large regional CPA firm about all of the cash and tax incentives that the federal and state governments are currently offering to help commercial building owners and tenants justify energy use reduction retrofits.

Even without the incentives factored in, these retrofits can usually achieve 30 percent to 40 percent or more in return on investment, using today’s energy costs and not even accounting for future energy cost increases. (With the incentives factored in, ROIs in the 60 percent range are not unheard of.)

This particular CPA executive had not heard of some of the incentives that I had mentioned to him. Recognizing that even though I am in the business of energy consulting I too have to do an almost weekly update check on the various incentives Web sites, I could understand how he hadn’t heard of all that was now available.

Anyone who is a business owner, building owner or tenant needs to be aware of the opportunities that currently exist to help them become more energy efficient. For example, there is a federal tax deduction of up to $1.80 per square foot of building space, depending on the amount of energy use reduction that is achieved, available to either the building owner or the tenant.

There are also grants (up to 25 percent of project cost) and loan guarantees available through the U.S. Department of Agriculture for energy efficiency improvements for small businesses, and federal tax credits of up to 30 percent, with no cap, for certain renewable energy installations.

Efficiency Maine offers several cash incentives for energy improvements to businesses. If your business needed to purchase a new 10 H.P. variable frequency drive, for example, you would be eligible for a cash rebate of $2,250.

Other cash rebates are offered for lighting, HVAC and refrigeration upgrades as well as other energy-use improvement systems or components.

Each business is eligible for Efficiency Maine incentives up to $300,000 per business, per calendar year. These examples are far from a complete list of incentives, and all available incentives have limited life spans.

High energy costs are today’s reality. Higher energy costs are the expected trend over the next several years. The most efficient, competitive businesses coming out of this recession will be those who have made the most effective cost management decisions, including those related to energy use.

We all will be on the happier side of this economic recession in time. Who among us will position ourselves to survive and prosper in the post-recession economy?

 – Special to the Press Herald

 

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