“It’s a very simple message: you can save cash and we can help to make the investment painless.”
— Laura Galbraith, Executive Director, Venture North
How Venture North Fuels Small Business Savings Through Energy Efficiency Financing
Every small business is spending money on energy costs; the real question is whether those dollars are all going toward paying unnecessarily high utility bills, or being invested in smart improvements that will pay for themselves with continuous energy and resource savings.
It can feel like a catch-22: a business owner knows that saving energy can make them more competitive and reduce costs, but how to come up with the funds to make the improvements and where to look for help?
Before they can save money through energy efficiency upgrades, they need capital to invest in the first place. That’s where Venture North comes in, which currently administers interest-free loan funds for 12 businesses in the Traverse City region of Northwest Michigan.
Venture North’s mission includes supporting economic growth and community development by providing funding options. What started in 2012 with $50,000 (through the Traverse City Chamber Foundation and a matching grant from the Traverse Bay Economic Development Corporation), has grown to a $6 million loan fund today.
“For businesses that qualify for loans to improve energy conservation and energy efficiency,” says Laura Galbraith, Executive Director, “it’s a very simple message: you can save cash and we can help to make the investment painless.”
To qualify, applicants first receive an energy audit, to make sure that the term of the loan matches the return on investment. To leverage savings through the local utility (Traverse City Light & Power, a Venture North partner), loan recipients also qualify for incentives.
Securing Thousands in Annual Savings with Lighting and Building Envelope Upgrades
An example of Venture North’s success is shown by Traverse City-based Britten, Inc. a small business that provides banners and other custom branding services from its 300,000 square-foot facility.
• Business: Britten, Inc.
• Type of Project (fuel type): LED lighting upgrades (electric)
• Investment: $25,000 loan over 24 months
• Payback period: 18 months
• Savings: $5,000 – $6,000 annually
On another project financed by Venture North, a loan made it possible to upgrade a building’s thermal envelope to unleash savings. “Our debt service on that project is roughly $1,000 a month. Our energy savings on the project is roughly $3,000 a month. So we’re netting $2,000 in our pocket each month,” says Chris Warren, General Manager of Midwestern Broadcasting, Radio Centre. If not for the Venture North loan, he says, “we would not have done the project.”
• Business: Radio Centre
• Type of Project: Seal thermal envelope of building
• Investment: $36,000 loan over 36 months
• Payback period: 34 months
• Savings: $24,000 annually
“We’re excited about energy efficiency and reducing costs of doing business,” says Doug Luciani, CEO of TraverseCONNECT (owner of Venture North) and co-chair of the Chambers for Innovation & Clean Energy Advisory Board. “A lot of voices are asking for leadership on energy efficiency, commitment to renewables and being thoughtful about using electricity. It’s made a big difference to have businesses asking for this.”
With more than $300,000 in loans to 12 projects currently, the annual energy savings from Venture North funded projects are about 1 million kWh, which is enough energy to power 112 homes’ electricity use for one year. And the good news is those savings are only expected to grow with Venture North’s recent certification as a Community Development Financial Institution (CDFI) by the U.S. Department of Treasury. Becoming a CDFI will allow Venture North to leverage existing funds and attract more public and private investment to Northwest Michigan, including more federal economic development programs and existing federal dollars. The certification, Galbraith says, is “a true game-changer that opens numerous doors to major-scale resources and partnerships.”
The Small Business Energy Initiative (SBEI) recognizes that local Chambers of Commerce can play an important role in helping their members save money on utilities and improve business operations through energy management. The SBEI provides resources to Chambers to arm small business landlords and tenants with practical knowledge and resources, and to effectively represent the interests of small business members with their utilities and local governments. Led by the Institute for Market Transformation (IMT) and the Council of Smaller Enterprises (COSE) the project is funded by the U.S. Department of Energy (DOE). The 3-year Initiative is designed to provide free, energy-saving guidance to small business chamber members.
Current members of the Initiative are:
• The Council of Smaller Enterprises (COSE) – Cleveland, OH
• The Traverse City Area Chamber of Commerce – Traverse City, MI
• The Chapel Hill-Carrboro Chamber of Commerce – Chapel Hill, NC