Beyond the cost reduction incentive, investing in renewables empowers SMEs to be agents of change.
A recent report from Total Retail reveals a noteworthy trend: more than four-fifths of Gen Z consumers and three-quarters of millennials consider environmental sustainability in their purchasing decisions. These young consumers value companies that use responsible and ethical practices in all phases of production from manufacturing to distribution.
That is an important finding as millennials (people born between 1981 and 1996) currently make up the largest group of consumers, and members of Gen Z (a term that refers to people born in the late 1990s and the first few years of the new century) are set to overtake them in 2026.
Such a shift in consumer preferences is a golden opportunity for small- and medium-sized enterprises (SMEs) to fulfill promises of sustainability while also maximizing profit margins. A crucial part of this effort will include taking steps to champion renewable energy.
Businesses everywhere are shifting to renewable energy because it’s often significantly cheaper than traditionally produced electricity. Solar power in particular is now recognized as the cheapest form of electricity, the International Energy Agency reports.
Due to their size, it’s also easier for SMEs to take on such changes. In the process, businesses can even reduce utility costs by up to 30%. By being self-sufficient in terms of energy, these businesses will also be less prone to incurring losses from power outages or surges.
Beyond the cost reduction incentive, however, investing in renewables also empowers SMEs to be agents of change in their local communities. Hoymiles, a Chinese company that works on lowering renewable energy costs, points out that excess green energy created by increasingly efficient panels and microinverters can be fed into the local grid.
And SMEs have a bigger potential to make an impact this way, especially in OECD countries like France and Canada, where they make up 99% of all businesses. Such community-based initiatives can also offer job opportunities and sustainable development, especially in areas often neglected by larger corporations.
However, going green won’t just bring SMEs cost efficiency, energy independence, and opportunities to grow in emerging markets. With sustainable practices having a surge in popularity, businesses can also come away with enhanced prestige and value. This can help maximize customer conversion and loyalty, all while attracting new talent to business teams.
By promoting renewable energy, SMEs can significantly influence the future of renewables. By going green, these businesses can motivate their competitors to step up their game and adopt sustainable practices as well. By doing so, they will be contributing to a major shift in energy consumption among SMEs, increasing demand and inevitably creating jobs in the renewable energy sector.
More importantly, by collectively shifting to renewable energy, SMEs can help lead the fight against the climate crisis at a time when most companies and governments are focused on alleviating effect of the COVID-19 pandemic. This is especially crucial given that, according to the Organisation for Economic Co-operation and Development (OECD), SMEs produce 70% of Europe’s carbon emissions.
A surge in the use of renewable energy among SMEs can only lead to increased attention in other clean technologies as well. After all, producing electricity with solar power, wind turbines, or even hydropower is just the tip of the iceberg.
In the past decades, a wealth of innovations have been created with reduced carbon emissions in mind. For instance, in transportation there are more and more electric cars and planes, as well as biofuels sourced from algae, sugar, and other organic compounds. Many technologies also treat seawater so it can be reused in manufacturing, as is done at Saudi Arabia’s Ras Al Khair Desalination Plant.
SMEs can add value to these technologies by adapting them into their own operations or even investing in the development of new ones. Doing so wouldn’t just be eco-friendly or humanitarian in nature. With climate change putting business assets at risk, choosing to champion both renewable and clean technology as a whole is also a sound business decision.