Blog 03. 02. 2022 Written by: Eva Almašiová

6 reasons why companies should invest in green technologies

In times of coronavirus pandemic, companies often have to economize and reconsider every euro to be spent. Many of them are hesitant when it comes to investing in modernization and revitalization of the company and they are waiting for the situation to stabilize a little bit. However, there is a certain type of investment with promising potential that offers various immediate and long-term benefits.

Now let's go through the main reasons why companies should not wait any longer to invest in green technologies.

1. Lower energy costs

Financial savings are probably the most compelling reason to switch to your own green electricity production. Would you believe that the graph you are looking at does not show the price development of bitcoin or any other cryptocurrency? It is the price development of electricity in the short-term market during the last year. At the beginning of 2021, the base price of one megawatt-hour of electricity was around €50. At the end of the year, electricity traders paid for the same megawatt-hour up to €420.

Price development of electricity. Source: okte.sk

Even though the situation is a bit better today and the electricity is traded for about €200 per megawatt-hour, it has been a historic high that has left many market participants unpleasantly surprised. Unlike households, i.e. regulated entities partially under state protection, non-regulated entities, such as companies, have to deal with this problem themselves.

There is, however, one formula that applies to renewable energy sources (RES) – the more expensive the electricity is, the more financially attractive it is to produce your own. In addition, the financial effect of the battery storage system in combination with local energy sources, including the possibility to reduce energy-related expenses such as reserved capacity and reactive power, immediately reflects in lower monthly electricity costs.

2. Truly helping nature

Going green is the right way forward. But activities and measures in favor of sustainability must make sense in the first place. A perfect example is the replacement of plastic bags with paper bags. Did you know that in order to mitigate our environmental impact by using a paper bag, we need to re-use it at least three more times? This means that if we threw a disposable plastic bag correctly in the bin, we would burden the environment less than buying a seemingly green-looking paper bag.

The energy sector is generally the biggest air pollutant in the long run and it stands at the absolute beginning of the entire carbon emissions production chain. Therefore, if we want to help our planet, it is good to start at the heart of the problem.

GHG emissions by sector. Source: ourworldindata.org

Emission-free alternatives such as renewable energy sources and battery storage systems certainly have a positive impact on the environment. But they must be installed and managed in an intelligent way. What is more, these technologies can quickly repay their carbon debt which makes them an effective tool in the fight against climate change. We have already covered the topic of the carbon footprint of batteries and renewables on our blog.

Even battery storage alone can be considered a green technology. It contributes to reducing carbon emissions by providing the so-called regulations services, i.e. the battery charges when there is a surplus of electricity in the power grid and discharges when there is a shortage of electricity in the grid. In this way, it replaces fossil providers of regulations services and helps to ensure the smooth operation of the transmission system.

3. No need to bear high initial costs

Green technologies are not cheap, but the benefits they offer are definitely worth the investment. The purchase price of the battery storage together with solar panels can pay back even three times over a period of approximately 15-year battery lifespan. Considering the 25 to 30-year lifespan of solar panels, batteries can be substituted at the end of their life with new batteries and new technology, which will certainly be much more efficient and according to the development of battery prices, also cheaper.

Price development of lithium battery. Source: statista.com

Today, such an investment may no longer be just the case of companies with free or easily accessible funds. With the new Energy as a Service model (EaaS), companies can acquire green technologies in the form of "operating lease" which completely eliminates the problem with high initial costs. This slightly extends the payback period for the end customer, but in addition to easier financial access, all the troubles with management, service, and maintenance of green technologies are eliminated as well.

4. Higher independence and energy self-sufficiency

Sometimes even one short power outage can cause big problems and profit losses. Companies working with technologies highly dependent on a continuous power supply need to have reliable protection against blackouts. For this purpose, they use either a backup power source that can provide electricity in the case of longer power outages or more responsive equipment, such as UPS (Uninterruptible Power Supply), which can cover the shorter micro-outages.

The diesel generator is the most frequently used energy backup source. However, its responsiveness can be quite long. Depending on the degree of preheating of the generator, the response time can vary between 10 to 30 seconds. The battery storage works almost immediately and it can serve as both the backup source and UPS. With its own renewable energy source, the company becomes naturally more energy self-sufficient and less dependent on the supply of electricity from the power grid.

5. Outstanding non-financial results

From the perspective of customers, stakeholders, and investors, companies that invest in sustainability and green technologies achieve much higher evaluation scores than companies that neglect this aspect. The volume of investments streaming into conscious companies actively engaged in ESG activities (Environmental, Social & Governance), i.e. to companies managed sustainably, fairly, and in a way that protects the environment and affected communities, is expected to reach up to $53 trillion by 2025.

A good ESG score means that the company sets high long-term goals in terms of environmental protection, protection of communities, and conscious management, and succeeds in achieving these goals. Together with the promising financial statement, the ESG reporting becomes an ace in the sleeve of all companies seeking investments. Own renewable energy source in combination with battery storage significantly reduces the amount of direct GHG emissions produced by the company, which can be also disclosed in the ESG report.

6. Next-generation brand building

Sustainability is becoming one of the main priorities in the consumers’ decision-making process. This is due to the fact that an increasing part of the population with the highest spending power consists of the so-called millennials (born 1981-1996), who, unlike the older generations, put much more emphasis on the protection of the environment.

Did you know that today's millennials are twice as willing to change their habits in favor of sustainability as the baby boomers (born 1946-1964)?

The latest Generation Z (born 1997-2012) is so far the most serious about environmental protection! An article published by Forbes recently revealed that Generation Z often makes decisions based on personal values and principles that protect the whole community and the environment, and is willing to pay up to 10 percent more for sustainable brand products than other generations.

So, if you are still wondering whether the transition to green resources is the right choice, perhaps our list has helped you at least a little. If you want more facts rather than theories, subscribe to our newsletter or follow us on our social media where we will gradually add the results of our projects and installations.

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