Big Efficiency for Small Manufacturing

Blog Post | January 09, 2014 - 9:47 am
By Daniel Trombley, Senior Industrial Analyst

Any serious effort to acquire energy savings from the manufacturing sector will need to address the needs of small and medium-sized manufacturers. While most industrial energy efficiency programs have first exploited efficiencies of scale by tackling the biggest energy users (quite sensibly), that approach overlooks about half of the manufacturing energy consumption in the United States. There’s a lot more savings to be realized by addressing the needs of the small and medium-sized manufacturers who make up 90% of manufacturing establishments (out of nearly 300,000 sites where we’re making things here in the U.S.A.). This is particularly true in heavily industrial states that may be facing the greatest energy resource challenges.

We decided to take a look at what those needs and barriers are, and what programs are currently doing to address them. The result is our newest research report: One Small Step for Energy Efficiency: Targeting Small and Medium-Sized Manufacturers.

We looked at the current suite of more generic program offerings to industry before exploring several programs designed to address the specific needs of smaller manufacturers. There were a variety of success stories in terms of the ways these programs are using energy efficiency to help manufacturers improve their bottom lines. Our report identifies four types of opportunities these programs are taking advantage of:

  • Leveraging trade allies and other trusted partners to reach the manufacturing community;
  • Tailoring energy management offerings to smaller customers, recognizing they are unlikely to have full time staff to dedicate to energy management;
  • Providing financing options such as on-bill financing or property assessed clean energy (PACE)  for investments in energy efficiency; and
  • Making use of existing financial and technical assistance resources such as Department of Agriculture programs or state tax credits to facilitate investments.

Several important lessons emerged from this analysis, including the importance of both building relationships with industrial customers and identifying barriers to investments in energy efficiency at smaller manufacturing sites before designing a program. For more lessons learned, program profiles, and a background on drivers of investments in energy efficiency by small and medium-sized manufacturers, download our report.