For years, companies have been paying lip service to the idea of a green-energy revolution. Sure, they may sponsor a wind farm here or there, or they might try to get LEED certification for their building, but when push came to shove, companies would shed these efforts at the first sign of economic trouble.
Today, this isn’t so much the case anymore. Just a few weeks ago, Verizon Communications Inc. (NYSE:VZ) announced an ambitious plan to spend $100 million to build 70 million kilowatt-hours’ worth of solar energy facilities across the country to power 19 of its facilities. Many companies are finding that investing in alternative energy and energy conservation projects gives big relief to costs and in turn helps to pad the bottom line. From Apple Inc. (NASDAQ:AAPL)‘s solar projects to Starbucks Corporation (NASDAQ:SBUX)‘ energy conservation efforts, the green-energy movement its popping up all over corporate America. Let’s look at what some big companies are doing and how it is helping the bottom line.
Spending a dime to save a dollar
Since 2001, the average cost of electricity has increased by more than 35%. For many companies, that jump represents a major cost problem, and the only way to deal with it is to reduce total electricity consumption. Starbucks Corporation (NASDAQ:SBUX) hopes to reduce its per-square-foot energy costs by 25% from its 2008 consumption levels by the end of 2015. Assuming each Starbucks Corporation (NASDAQ:SBUX) store is about 2,000 square feet (50 by 40 feet), the program would save the company $50 million a year based on current electricity prices.
The potential gain in operational costs is so great that even oil companies are jumping on board. Devon Energy Corp (NYSE:DVN)‘s new Oklahoma City headquarters was meticulously designed to reduce energy consumption by 20% and overall water use by 2.4 million gallons a year. (At that rate, the company will have enough water to hydraulically fracture a new well once every two years.)
The first rule in business is to make money, and it’s a lot easier to do that when you’re spending less money to keep the lights on. Corporate America is catching on, and fast.
Gone are the days where companies have put a few token solar panels on their corporate headquarters for the PR. Today some of the largest companies in the world are making big investments in alternative-energy projects. Back in March, Apple Inc. (NASDAQ:AAPL) announced that 75% of the company’s operations run on alternative energy, and it also acknowledged that it owned the largest private solar facility in the U.S. and has plans to get a second facility of similar size online by the end of the year.
One of the biggest reasons Apple Inc. (NASDAQ:AAPL) has made such large alternative-energy investments is to power its data centers. Energy bills can represent as much as 75% of total operating costs for a data center, so the upfront costs for a nearly free energy source can pay for itself in a pretty short amount of time. About four years ago, Intel Corporation (NASDAQ:INTC) was the first to explore the idea of powering data centers with solar, and now the company supplies 100% of its 3.1 billion kilowatt-hours of electricity used with alternative sources.