How energy efficient systems benefit MSMEs?

Introduction

The need to make energy consumption more efficient, has always been a need for businesses. In recent times, due to the increasing global pollution levels, increasing pressure from the community to cut down consumption (and leave a smaller footprint) and corresponding legislations, this need has become a necessity. Not long ago1, it was not uncommon to see the business executive be skeptical of introducing energy efficiency. Sobriquets like ‘overhead’ and ‘cost-head’ were floated while discussing energy savings. But today, the times are changing. According to this article2, 57% of executives interviewed saw energy efficiency as a means of optimizing costs.

MSMEs are nimbler than their bigger counterparts and can adapt themselves to being more energy efficient, faster. MSMEs are also more worried about their costs and overheads as they generally tend to reinvest their profits in the business. In this chase for profit maximization and quick growth, it is possible for energy efficiency to be completely overlooked. But facts show that the opposing option is a better one.

Why energy savings?

HP, back in 1990 started experimenting with non-lead solders1 and was able to save millions, when the actual compliance got rolled out in 2006. A more energy centric example would be FedEx that has been experimenting with energy saving means for a long time, saving billions in cost. Energy savings are important for corporations (big and small alike) because they do have direct business benefits.

Business benefits of energy efficiency

  1. Lowering business costs- The examples above (and there are many more) show that energy savings save business costs. Spending less energy means spending less money to buy energy, which has an impact on the savings. The investment in energy efficiency is generally the heftiest at the start. But the benefits keep pouring in.
  2. Increasing asset resale value- An energy-efficient asset (like a production house or an office) has much better resale value in the market. Should an MSME want to unload some of its assets, then it will get a better price for the ones that save more energy.
  3. Improving brand image- There is nothing worse than being bashed for corrupting the environment. However, the brighter side of this shows that news about energy savings can be shared to build a better brand image. For example, Coca Cola has been in the good books of environmentalists (and investors) for years, for using renewable energy sources3.
  4. Achieving compliance- Even as an MSME, you will be under the cross-hairs of compliance that seeks to check your energy savings. These kind of compliances are underway and will be in place in a matter of time. Being energy efficient today, will give an MSME a lot of time to prepare for future compliances and not set it back in any way.

How to implement energy savings

  1. Energy savings can achieved in a number of ways.
    Simple energy saving practices for electronics- Switching off machines not in use or enabling their stand-by mode slowly but surely saves energy.
  2. Energy savings for personal devices- The energy savings practices can be extended to the personal devices of employees for their mobile phones, laptops etc. to cut down on consumption.
  3. Looking for energy-savings’ certified machines- Many energy efficiency firms (like Energy Star) mark devices as being energy efficient. Some of these devices sport that logo, which can be checked during their purchase. These devices may be more efficient but the costs are recovered in the long run.
  4. Switching to more efficient lighting options- There are plenty of energy-efficient lighting options today in CFLs and LEDs. They can be opted in favor of the traditional lighting solutions.
  5. Being observant about energy consumption- Many companies switch on water-heating even if that might not be needed. Some firms keep servers switched on, that aren’t needed. It is always a good idea to look back at established practices and see where energy can be saved. Since MSMEs are smaller, they can do this much more quickly and be efficient from the ground-up.

Impact on MSME growth

An MSME that adheres to energy efficiency is always in a better position to grow and outdo its competition. It is not just savings accrued from good practices or the satisfied feeling of contributing to the environment. It is also the better public image that helps when going for an IPO. It is the ready adherence to compliance that you walk through with much lesser hassle than others.

Energy efficiency has a powerful impact on almost every facet that makes up a business. As an MSME, being energy efficient is a smart and logical choice that will pay off early and also in the long run.

Sources
1: http://www.billsynnotandassociates.com.au/images/stories/documents/sustainability_the_key_driver_of_innovation.pdf
2: https://www.forbes.com/sites/heatherclancy/2014/12/31/10-companies-to-watch-in-energy-analytics/#167885f0175f
3: https://www.greenbiz.com/article/bmw-and-coca-cola-join-100-percent-renewables-wave

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