Green energy delivers marketing gold

Sourcing 100 per cent of your firm's energy from renewable sources can prove a challenge, but it could be one worth undertaking

Phil Nial knows what it means to run a business entirely on renewable energy. The co-founder of Californian hosting provider Aiso.net powers his entire data centre using solar energy from 120 panels on two large solar arrays. The $100,000 installation, covering 1,200 square feet, has already paid for itself, he claims, adding, "we have a connection to the grid, but only for emergencies".

But if he can do it, can you? How feasible is it to run a business entirely on renewable energy?

Aiso.net is a family-run business, and larger companies face stiffer challenges when it comes to renewables and microgeneration. It is not clear that such an investment would scale, for example, or that all businesses would be prepared or able to make the considerable upfront investment necessary for such materials.

But there are other ways to run your energy on renewable business, even if you are connected to the grid. Jeff Binder, CEO of Ontario, Canada-based e-commerce firm Saffron Rouge, pays a premium for renewable energy from his provider. "It's an additional price over the regular street price for power, but it's not much and it's coming down," he says.

But how does that work? In the same way that you can't walk into the bank and ask for your specific pound notes to be returned to you, you can't go to most energy providers and ask only for green electrons. In the UK, government targets dictate that 10 per cent of all power must be renewable by 2010, but most providers will still get their power from a mixture of renewable and non-renewable energy sources.

Oregon-based Batdorf & Bronson Coffee Roasters uses a mixture of locally generated power and offset credits to achieve its goal of 100 per cent green energy usage. "When you're buying from a provider, you don't get to say that you only want to buy wind power [and] our energy provider buys from a number of energy sources - once they have it it's just in a big pool, essentially," explains the firm's VP for coffee Scott Merle. "So the way that the utilities have addressed consumers' and businesses' concerns about using renewable energy is that they pledge to replace what gets used with renewable energy - if you pay a premium for it."

Batdorf & Bronson buys green offset credits called 'green tags' from the Bonneville Environmental Foundation (BEF), a non-profit set up to help develop new sources of renewable energy. "We buy those tags from renewable energy projects across the country and deliver them in a certificate through an audited path to Batdorf & Bronson," explains Rob Harmon, chief innovation officer at BEF.

Similar schemes are operated in the UK allowing businesses to buy credits that represent an investment in new renewable energy projects.

Unfortunately, this may mean that companies pursuing green energy through existing providers will be paying more for their energy, which from an accountant's perspective doesn't seem to make good business sense. But Merle, who was instrumental in setting up the green tags contract with BEF, says that he wanted his business to do the right thing. And Binder says that financial directors should be looking at more than just the immediate cost.

"You'll pay a premium on the energy costs, but if you leverage that in the marketing, does that drive more consumer interest in your business? What does that do for public relations?" he asks.

The other option for larger businesses includes running your own renewable energy facilities on or close to your buildings, Binder says. That may not be feasible for many who can't spare the cash, but an increasing number of smart, successful companies are doing just that.

Google has already vowed to put 1.6 MW of solar power on its Californian roofs. Wal-Mart has also been piloting solar over the years, and now has it installed across several stores. Even if many businesses don't find 100 per cent renewable energy a realistic proposition, it could make good business sense to at least start buying green power - or even, in some cases, producing your own.