Understanding Your Return on Investment (ROI)

Return on investment (ROI) is a major factor in determining whether or not to move forward with an energy efficiency upgrade. ROI allows a business and investors to recognize their green energy initiatives while ensuring that the project pays itself back in an economically sound time frame.

According to National Real Estate Investor, “Gone are the days that the investment community was concerned about the ability of sustainable buildings to deliver stable returns.” With clean energy technology becoming more prevalent over the past decade and increasing in affordability, commercial building owners are now finding energy efficiency upgrades to be among the most essential of assets.

The key indicators mentioned in relation to ROI are the effects energy efficiency measures can have on building outputs, including higher rent, lower vacancies, and lower overall operating costs. These profit growth side effects combined with utility rebates and government incentives provide ROI in a shorter amount of time and continue to optimize your bottom line past the payback period.

While these tangible benefits are fantastic reasons to move ahead with an energy efficiency customization, there are additional positive influencers to be had by understanding the underlying complexities affecting ROI. Tax incentives are a big component in ROI with some states offering up to 30 percent savings to encourage energy reduction projects. This cuts operating expenses beyond the scope of energy savings and, based on the utility company, can have lasting effects on your utility bill.

For businesses and building owners weary of the up front cost for an energy project, financing companies like Emilygrene Financial have developed attractive programs specifically related to green energy. With certain energy conservation initiatives in place, your company could meet the prerequisites for access to discounted interest rates, preferred pricing, and additional loans. Each of these financing tools delivers a boost to your ROI and your overall profit margin.

The factors that affect overall ROI continue to push returns to higher sums in shorter time frames for energy upgrades. With building tenants demanding energy efficiency buildings and building owners remaining vigilant of the cost savings involved, energy efficiency upgrades are quickly becoming the most common of investments. As financing options become readily available and incentives more popular among state governments, it is the smart (and profitable) decision to go green.

Source: National Real Estate Investor

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