Demand Response: A New Profit Center For Green Businesses
Jan 19, 2009
Many businesses are now taking advantage of a new tax incentive vehicle, known as demand response.
According a recent article entitled How to Take Charge, Rack Up Revenue, Earn Incentives and Whittle Away Waste by Mary Catherine O’Connor, a demand response event occurs when heightened energy use, generally caused by weather extremes, leads to the threat of overtaxing an electrical grid. To avoid blackouts, the utility puts out a call to companies that can lower their energy usage over a given block of hours during peak demand to do so — in exchange for money.
She notes that these businesses often work through an independent third party that works both with the end user of energy and the utility provider, which is known as an independent system operator (ISO). An ISO works to maintain a balance of supply and demand on an electrical grid that serves a given region or state, and ensures that adequate power supplies are always available.
Basically the businesses participating in the manual demand response system needed only to install a special meter to measure electricity usage in intervals — usually an hour or 15-minute periods — so they can prove how much they have reduced energy usage over a given time.
Other businesses are installing large on-site power generation plan â€“usually large solar panels across their roofs- which can actually pay them for generating power, if they buy the equipment. If they choose to lease the solar equipment, the tax incentives go to the installer, but the property gets the benefit of reduced energy costs.
The US Department of Energy has recently updated its general information site called Tax Breaks for Businesses, Utilities, and Governments.
Free money talks â€“ and if states and cities can do a better job of promoting their “demand response and energy efficiency improvements”, it will be a short time before most businesses seek to improve grid utilization through rebates and money back.
Some city utilities are currently offering free digital thermostats for private homeowners, which adjust temperatures automatically to peak energy demands and empty houses, such as the City of Austin.
All are good steps to take in a greener future. Whether businesses switch to these programs out of bottom-line demands just because “going green” is the right thing to do—the American people win.
Here’s to a Greener Tomorrow…Today.