These days reducing production costs to increase competitiveness is a must. In a report titled Climate Solutions, the World Wildlife Fund notes that the world could cut energy consumption 40 percent by 2050 through improving energy efficiency and energy conservation. But when looking for alternatives that don’t sacrifice the quality of raw materials, not many entrepreneurs realize that a change in energy policy could save them a considerable amount on their energy bills.
We’ve identified the four main barriers for companies to increase their energy efficiency. They are lack of information, lack of technical know-how, lack of technology and lack of financing.
For some, the solution has been capturing the heat that the machinery gives off. For others, it is replacing air conditioning equipment or even the televisions in a hotel. In the case of Javier Sancho, the manager of corporate banking with BAC Credomatic in Costa Rica, the solution was lighting in bank branch offices.
After human resources, BAC Credomatic’s largest expense is electricity, mainly for lighting and air conditioning. An energy audit recommended the regular lights be replaced with LEDs, which would reduce the electric bill 40 percent.
“This is a tried and true mechanism for improving a company’s competitiveness. It enables the company to be sustainable in the long-term, to the benefit of not only its owners but also the community and its employees,” Sancho said.
In order to guide and advise SMEs, the Inter-American Investment Corporation (IIC) provides free energy audits through its GREENPYME initiative. The diagnosis resulting from the audits identify the changes companies can make in their energy consumption to reduce costs and increase competitiveness through good practices and investment in more efficient equipment.
The exercise involves reviewing all the facilities and equipment that consume energy to determine what can be replaced with more efficient options. It is also important to look at how current equipment can be made to consume or waste less energy. In this way, small changes can result in monthly savings for the company.
So far, GREENPYME has completed 600 free diagnostics for companies in Central America and Bolivia. If you’re interested to learn more, visit our webpage.
This blog post was originally published in July 2015.