By Ashley Smith, Fundamental Inc.
Over the next four years, light bills will increase (by either 1.5 or 2 times the current charge, depending on who you believe (1)), and we now have a carbon tax on fossil fuels (2) (currently replacing the Austerity Budget 2016 Gas Tax) that is set to increase over the next four years, by agreement with the Atlantic Provinces.
How will you accommodate this potential hit to your bottom line? You plan for it—the same as for any other financial impact to your business or home budget.
Gather your energy use bills (this could include electricity, heating oil, gasoline, diesel, propane, etc.).
Add together the total dollars spent for a year. Then:
— Step 2A Multiply the electricity cost by 1.5 (low) and then by 2 (high) to give you a range
of potential cost increases.
— Step 2B
Add the following approximate costs per litre of fuel used.
Add together the low estimate and the high estimate separately. This will provide the range of projected increased energy costs.
Compare this amount with some of the other costs of your business (e.g., lease/mortgage, corporate tax, accounting costs, employer payroll contributions, employer benefit costs). You may be surprised at the size of your energy expenditures relative to other significant business costs.
Compare the options you have to implement energy efficiency and renewable energy:
Despite some erroneous preconceptions, NL has good quality solar and wind resources!
Evaluate the costs of implementing the energy efficiency and renewable energy options (e.g., by getting quotes, which are often free). There are also several available funding programs aimed at clean tech and green initiatives:
Low Carbon Economy Fund: Partnerships Stream (closes March 8)
Tourism, Culture, Industry, and Innovation (TCII)
Atlantic Canada Opportunities Agency (ACOA)
Take Charge NL
upcoming provincial funding programs (still TBD)
Calculate a simple payback time (by subtracting project costs from project savings each year until you reach zero), or use an online ROI (return on investment) calculator to determine how favourable the project is financially over time.
Following these steps can help you determine the risks and exposure to increasing energy costs and begin to create a best-fit strategy for addressing energy efficiency. Alternatively, you can stick to what you do best and call a consulting firm to have them do it for you. Visit www.fundamentalinc.ca or get in touch at firstname.lastname@example.org.
Ashley Smith, Fundamental Inc.
Fundamental Inc. provides consulting and design services related to energy efficiency, carbon emissions, and renewable energy. We are based in Newfoundland and Labrador and work with all sectors, including commercial, municipal, institutional, and residential. We help our clients understand and effectively exploit cost savings from energy efficiency measures and renewable energy options. Owner and director Ashley Smith, BSc, MEng, LEED AP, has 16 years’ experience in strategic planning, construction management, green building, and sustainability consulting.
1 business.financialpost.com/pmn/business-pmn/nalcor-to-give-update-on-muskrat-falls-after-pledging-to-lower-water-levels. www.pressreader.com/canada/the-telegram-st-johns/20180724/281479277206375