There are a multitude of tax breaks at the federal level and in most states to help solar and wind power businesses. The federal renewable energy production tax credit (set to expire December 2012), for example, credits 2.1 cents per kilowatt hour produced.
Dig Deeper: Say Yes to Solar
Breaking Into the Green Energy Business: Consider Contracting
According to the U.S. Department of energy, U.S. agencies could save $200 million a year in energy costs. For businesses looking to break into green energy, that means a chance to bid on a large pot of projects in coming years, and earn a portion of the $10 billion of spending annually on energy-using projects.
"There are a lot of federal contracts coming up," Titone says, pointing to FedBizOps, fbo.gov, for listings and information on contracts. "Initially they won't get a major contract, but they can work their way up. The best way for a small business to break in if they have current technology is to be a supplier to or subcontractor for a major contractor. … It's still competitive, still a lot of marketing, but it's a good way to break in."
Federal government needs are expansive, the Department of Energy wrote in a 2008 guide, "Selling Energy-Efficient Products to the Federal Government." So when pursuing energy efficient and renewable energy projects by contract, "The key is understanding the best route, best niche for sales of your product … via energy-saving performance contracting or large construction work, or some combination, and pursuing it accordingly." Small businesses are given some advantage: The Department of Defense and General Services Administration purchase the bulk of services and supplies for the U.S. government. They both have programs specifically to counsel small businesses, veteran-owned businesses, and woman-owned businesses (see the GSA's Office of Small Business Utilization Overview and the DOD's Office of Small Business Programs) on how to compete for bids to sell products or services.
However, most government energy savings performance contracts and utility energy service contracts to upgrade efficiency in government buildings are separate from the primary purchasing agencies, according to the Department of Energy guide. "These contracts enable agencies to obtain new capital equipment, improve the indoor environment, and reduce pollution," the guide reads, meaning federal agencies may go to the private sector to make energy and water efficiency improvements; that opens doors for design firms, contractors, manufacturers, roofers, and companies that create or install lighting and plumbing.
"Do your research," Titone says. "Make sure you're prepared, because if you get in a contract and don't perform… The biggest thing we don't want to see folks do is jump in when they're not prepared. There's free help." The Small Business Administration offers free classes on contracting through its business development centers and district offices.
Federal contracts are awarded through a competitive bid process. The bids are announced on an agency's website and publicized through solicitation lists; a business is advised to sign up for the lists of agencies most likely to use its product or service.
To enter the federal government's consciousness for closed bids or regional projects, join the Business Partner Network, a central source for federal agencies to access vendor information. The network ties to the Department of Defense's Central Contractor Registration, the Small Business Administration's PRO-Net database, and FedBizOps, a site that posts government needs for products and services.
Dig Deeper: Greening the City's Rooftops
Breaking Into the Green Energy Business: Become "Green" Certified
As the field of green becomes saturated, the Small Business Administration advises differentiating your business by becoming certifiably "green." Many residents who are using incentives to improve their energy efficiency or switch to renewable energy are probably concerned about eco-friendliness, and will seek out companies that appear to share their values. Federal agencies are required to look for businesses that can provide services with the most energy efficiency, and in some cases will specify in bids that those companies will receive preference.
Many states have their own standard of green certification. The Oregon Energy Trust, for example, has more than 1,000 "trade ally contractors"—contractors, manufacturers, and installers the organization supports as providing energy efficiency improvements and renewable energy products or installation in a responsible manner. Hammer and Hand is an allied contractor, and is also affiliated with 14 other organizations that certify the business. Semke says the certifications—ranging from Building Performance Institute to Energy Star—"prove we know what we're doing. It's an advantage to have a third party vouching for quality work," he says. "In a sense we've been vetted, and also, each one of these certifications shows we have a body of knowledge that has been tested."
Aside from state- and region-specific certifications, there are national certifications for contractors: Passive House Institute US, Efficiency First Home Performance Contractor, and Leadership in Energy and Environmental Design, known by its acronym, LEED. For other small businesses, it might be worth checking out Green-e, Green Business Certification, Green Seal, and Energy Star.
Residents, businesses and government are all shifting toward green, and more and more assistance is breaking down financial barriers and making green energy widely available—giving it profit potential for your business.
Dig Deeper: Landing Government Contracts
