How to Cope Financially During an Economic Downturn
Director | REC Solar, a Duke Energy Renewables Company
When events such as economic downturns, extreme weather, natural disasters, power safety shutoffs and other energy interruption events occur, many people begin thinking about what they could have done to better prepare beforehand. For some, keeping the lights on is most important, and when the potential threat of a power loss occurs, the value of keeping the lights on goes way up. For others, having the lowest fixed expenses possible is most important and allows them to remain up and running while riding out a prolonged period with reduced revenue.
Most organizations depend on income or financial assistance to remain up and running during an unplanned event. The best time to prepare for a threat is before the incident happens, not when panic occurs in the middle of the event.
Luckily, after even the worst that nature can throw at us, the sun rises again. Many decision-makers have decided to take matters into their own hands as they comb through their expenses, especially when it comes to their energy costs.
Energy represents the most valuable input to production. Without energy, organizations can shut down almost instantly.
With that in mind, decision-makers across the U.S. are looking to renewable energy and other energy infrastructure management companies to help design, build and manage their energy systems. This helps organizations of all types to better control one of their biggest expense areas while maintaining production. These decision-makers are also finding that adding on-site generation from solar photovoltaic systems (rooftop, ground mount and/or parking structures) combined with energy storage and microgrid controllers is a great way to assure their operations continue with as little energy interruption as possible.
Many organizations are positively surprised by their bottom line when they see the cost and operational benefits of on-site or community solar fields along with the storage resiliency technologies of a microgrid.
Case in point: In 2019, utilities in California shut off public power in areas in an effort to reduce the risks of devastating wildfires throughout the state. Some areas were without power for 5 days, even though fire was not present in their area. During this time, the Blue Lake Rancheria tribe used their solar-powered microgrid to provide food and emergency services to their entire community for each outage. That included housing those needing life-saving medical equipment in their hotel, offering reliable Wi-Fi and cellular services, and making space for thousands who just needed to recharge cellphones and laptops. The Blue Lake Rancheria tribe’s community forethought and proactive approach helped them save money when times were good and maintained their business when times were bad for everyone around them.
If you haven’t taken a hard look at your energy expenses lately, we suggest putting them into a spreadsheet and looking at each expense as a percent of a total with a focus on the largest amounts. There is likely money to be found if you look closely enough.
When is the best time to act? It’s always best to prepare in advance so that your business has a backup plan for when outages occur.
When should you take control of your most important input? Now, while you have the opportunity to create a backup plan and look at your financials.
Jared Friedman is Director of Commercial and Industrial Sales & Sales Operations with REC Solar, a Duke Energy Renewables company. REC Solar is a nationwide solar provider committed to creating a positive impact. Every day, we find new opportunities for energy innovation because we believe that to change the world, you have to lead the way. REC Solar and Duke Energy One are both subsidiaries of Duke Energy Corporation.