Op-Ed published in the Boston Business Journal

Bay State Small Businesses Need a Plan and Support to Benefit From the Clean Energy Transition

By Bill Rennie, RAM Vice President 

The Commonwealth’s more than 700,000 small businesses are the backbone of its economy, making up 99.5 percent of all private enterprises and employing more than 1.5 million people.

Despite their significant contributions to the Bay State economy, it’s not easy for small businesses to operate here. The cost of doing business in Massachusetts – including labor, taxes, and energy - is 18 percent above the national average. Only New Jersey and Hawaii are higher.

Small businesses are still recovering from the post-pandemic downturn; some are seeing revenues sag under the weight of inflation. But the challenges of today pale in comparison to what’s coming.

Massachusetts aims to achieve Net Zero by 2050 – something we can all support. But as energy costs continue to rise, small businesses need help to ensure they can fully participate in the transition to a clean energy future.

The business community will benefit from reducing the Commonwealth’s carbon footprint and building the new infrastructure required to preserve reliability and meet the rising demand of electrification.

Workers who build everything from wind turbines and solar farms to new power lines and substations are also prospective customers for local eateries, markets, hotels and more. Once work is complete, improved reliability in the face of increasing extreme weather events and cyberattacks means fewer days of power outages and lost revenue on Main Street and beyond.

The hard part is making sure small businesses stay open long enough to reap those rewards. Short-term solutions like National Grid’s small business grant program, which has distributed $1.8 million since January 2023 to help offset rising costs, are helpful. But we need long-term solutions.

Small businesses understand perhaps better than most that there is a cost associated with building the necessary infrastructure to deliver a more resilient and reliable electric grid. They also understand the value of making investments in their own operations – including installing smart appliances or solar panels - which will pay off in the future. Improvements in energy efficiency are key to the coming transition, and we’d be wise to give small businesses a seat on the state’s Energy Efficiency Advisory Council.

Ensuring these up-front costs are predictable and digestible is essential. The Inflation Reduction Act, which contains millions in incentives to go green and tax credits for energy efficiency improvements, is a good start.

State lawmakers also must fulfill the pledge in the Commonwealth’s sweeping climate plan to explore new financing and investment initiatives to help small business afford this transition. That includes providing capital for building retrofits and offsetting the cost of electrification.

A majority of Massachusetts voters have made clear their concern that climate change will negatively impact both their cost of living and their health. An even greater number, however, is worried about how they’ll afford to keep the lights on as monthly energy bills rise.

These issues can’t be mutually exclusive. We must be cognizant of cost for all consumers – residents and businesses alike - as we work towards our clean energy goals.

A balanced strategy recognizes that while we may want to do everything at once, not every customer may be able to afford it or be ready to do so. Without achieving this balance, the force that powers our economy will dim – something none of us can afford.