Energy is a Controllable Business Cost

Companies face escalating and volatile costs: labor, raw goods, capital, distribution, insurance - the list goes on. With onsite generation and storage, energy is one of the few company costs that can be controlled and unlock tremendous value in multiple areas of a business.

Increasing energy costs have been the course of doing business. Since 1970 they have risen at a rate of about 4% each year, from 1 cent per kilowatt hour to 8.06 cents for Industrial customers (Statistica ).? Over the last year, companies in high cost energy states with rates greater than the average have contended with an average 7% increase in rates from 2023-24, with the greatest rate jumps being in Rhode Island, New York, Illinois, Montana, California and Oregon which averaged an 18% increase in Industrial rates (EIA ). To control those costs we try to negotiate with utilities, sign virtual power purchase agreements and join trade groups to work with regulators on supply mix and other mitigation efforts. Those cost control measures don't solve for the fact that our grid is outdated, expensive to maintain and is suffering an increasing number of outages. What's more, these dynamics are based on our current energy needs, not the growing needs of our economy as a result of reshoring manufacturing, electrification of equipment/transport, digitalization and more.?

The reality is that costs are going to continue to rise. And the other reality is that passing these costs onto companies and residential consumers isn't going to work and is definitely not economically sustainable.?

As energy costs soar and reliability wanes, the notion that we must rely solely on the grid for our energy needs has become an outdated and limiting belief. It’s imperative to consider the transformative potential of onsite generation and storage. These solutions not only offer profitable, sustainable, and reliable outcomes but also mitigate inflationary risks.?

The Illusion of Limited Choices

Imagine a business, much like an ant trapped in a circle drawn on the ground.

The ant believes it cannot cross the line, though the boundary is merely a figment of its perception. Similarly, businesses have been conditioned to see the energy grid as the only viable source of power—a safe, affordable system that promises stability. However, this belief is a construct from the safety of our office, through a metaphorically dirty glass window with an obstructed view through which we view our energy options.

Shattering the Glass

To truly innovate and thrive, we must shatter this glass and broaden our perspective. Beyond the hazy pane of glass and grid power, lies a world of opportunity—alternative systems that can provide greater flexibility, control, and efficiency. Onsite energy generation and storage technologies, such as solar panels, wind/gas turbines, and advanced battery systems, are no longer futuristic concepts. They are practical, proven and very affordable solutions available today. Costs for these technologies have decreased by over 80% in the last decade (RMI ), incentives to deploy them have never been better (IRA ) and there financial models which allow us to reap the benefits of these systems for zero money down! Barriers to adoption have never been lower.?

Embracing the Unknown

It can feel risky to stray from the status quo. Yet, the greatest achievements in business history have often come from stepping outside the conventional bounds and daring to rewrite the rules. As business leaders, we face a choice: remain trapped in outdated paradigms or become pioneers who shape a new, more resilient and successful future.

The Unfair Advantage

Adopting onsite energy solutions is about gaining an unfair advantage. It's about creating a playing field where you set the rules, generating and storing energy right where you need it, to not only reduce costs and increase operational resilience, but also to appeal to sustainability-conscious consumers, employees and investors. The journey begins with no regret manageable projects that demonstrate feasibility and profitability. Success in these ventures creates a positive flywheel effect: more information leads to greater knowledge, which in turn fuels further innovation and improvement.

From Perception to Perspective

True transformation comes from merging perception with perspective. By understanding what technical options are available, the financial benefits, changing market dynamics, what our peers are doing and learning from their successes and failures, we compound the value of our insights. This approach fosters a culture of continuous learning and adaptation, essential for navigating the complexities of today's business landscape.

Educate, Practice and Scale

To create a compounding flywheel effect of success we must:

• Educate & Plan: Begin with educating ourselves and our teams with data, intelligence and actionable insights. We need to understand the risks and opportunities for the various stakeholders in our business, determine how they need to be involved and how they should receive the data. This will enable us to understand our business philosophies, financial expectations, local facility constraints, success drivers, and operator needs. In the process of applying these learnings with market data and intelligence we will gain insights into the energy industry, critical data inputs, and trade-offs.?
• Deploy & Practice: The key at this stage is to select several no-regret, high-ROI project opportunities and put data and insights into action by deploying projects. With learnings, we can replicate the insights across our entire portfolios to design an onsite energy strategy company/business unit-wide. This allows us to then prioritize and identify the locations that will benefit most from onsite systems and quantify company-wide opportunities. By designing systems customized to specific needs/constraints with the corporate overlay we can then competitively source the right systems from the right suppliers at the right price, with a proven process.
• Scale: With the initial energy system deployments, we can then scale at a pace. Leveraging real-time intelligence, market dynamics and tailored insights we can optimize our strategy and take control of our energy - deploying onsite energy systems and leveraging grid power when it works for us. We transform from passive consumers to active users, positioning to be prosumers in the future.?

Courage to Innovate

The path to positioning your company for short and long term success requires courage. It demands that we bet on ourselves and our vision for the future. We need to challenge the paradox of perfection, where we fail to act without having “perfect conditions”. We need to seek excellence through execution rather than being paralyzed by the pursuit of an unattainable ideal. Owning your energy is your secret weapon, use it before your competitors do.

A Call to Action

We cannot go through the motions of maintaining the status quo. We need to forge a new path around obstacles, leading our companies forward into a future where energy control, independence and sustainability are the norm, not the exception. Ask yourself: Are you the disruptor or the disrupted? The answer lies in your willingness to break free from the limitations of the past and embrace the boundless potential of the future.