With renewable energy more affordable than ever, new technologies are giving business owners the option to deal directly with renewable generators and lock in savings for the long-term.
The face of energy is changing. Wind and solar power are being added to our energy generation mix at a rapid rate, and are consistently more economical than coal or gas.
But traditionally businesses have struggled to access these lower prices unless they are very large energy users spending more than $2 million a year.
How are new solutions changing the game?
Advances in energy buying technology powered by blockchain are allowing small and mid-market business owners spending as little as $100,000 a year on power to deal directly with renewable energy generators by procuring virtual Power Purchase Agreements (PPAs).
These virtual PPAs, in turn give them access to verified renewable energy at fair prices without the need to purchase carbon offsets.
The advent of blockchain-powered online marketplaces with standardised contract architecture means that smaller business owners can strike a deal for power procurement in a relatively short timeframe as well – weeks rather than the months or years that PPAs typically traverse.
It can also be done without the need for the specialised legal consultants who are traditionally required to facilitate the procurement process.
For business owners looking to navigate the COVID recession and recovery, locking in power prices at an historic low ebb is a smart move.
Many businesses may face revenue shortfalls as consumer demand softens in the coming months and maintaining profitability means looking across all the areas of your business to reduce overheads.
The ability to save 30 percent or more on energy costs can make a substantial contribution to savings and lower overhead costs permanently.
There are also considerations beyond cost for business owners looking to procure renewable power.
What are some of the other advantages of this new solution?
The use of public blockchain technology to create an indelible link with a particular generation project means that business owners can choose which specific projects they wish to support with their energy spend.
This is particularly useful to small business owners in the current environment. With consumers less inclined to spend, and competition fierce, marketing becomes an increasingly complex affair.
Large businesses are using their substantial marketing budgets and energy buying power to boost their appeal to consumers by burnishing their sustainability credentials.
They know that consumers care about sustainability and are willing to change their purchasing decisions based on which outlets they perceive to be acting more ethically when it comes to the environment.
Until recently, smaller businesses who do not spend enough on energy to get a seat at the table to deal directly with energy generators have been unable to match the big end of town in the energy sustainability stakes.
The use of blockchain technology to enable virtual PPAs changes that, and even gives smaller businesses the upper hand. Another aspect of recessionary consumer psychology is that consumers will be more inclined to support smaller local businesses where they can.
The perception is that smaller businesses are both more important to the life of the community, and more vulnerable to the economic downturn than large national or multinational corporations.
Small business owners who communicate to their customers their decision to support a generation project that supplies jobs to people in their region can strengthen both their sustainability credentials and their connection to the local community through their energy purchasing choice.
All businesses consume energy, but too few owners think about how that energy is made. This is because traditionally we have not been able to choose the generation method behind our energy purchases.
But as energy buying technology develops and the market for power is democratised, smart business owners can lock in cost savings, sustainability advances and appeal to their consumers by taking a fresh approach to power.
Nick Martyniuk is the Chief Executive Officer at WePower.
