Outline the benefits of these alternative energy sources and discuss how SMEs can overcome the challenges and take advantage of these benefits.
Overcoming the challenges of alternative energy for small to medium enterprise
As the world’s consumption of fossil fuel energy continues to increase, so too does societal concern about global warming and emphasis on the transition to alternative energy sources by small to medium enterprise (SME). Although there are many benefits in alternative energy, SME must address significant financial and cultural challenges to achieve success. Overcoming high costs through investment strategies and exploitation of government policies can generate a perception with key stakeholders that the use of alternative energy design offers the greatest benefit to SME.
One of the greatest benefits of alternative energy is that the source is infinite. Although not necessarily constant, alternative energy is a renewable source that can be captured, refined and distributed to the existing power grid with minimal impact to the environment. A recent article which evaluates the performance of the solar industry (Lee et al. 2012) states, that since Japan’s nuclear plant disaster in March 2011 people are demanding a good alternative energy option that produces minimal pollution. Solar energy is one of the most promising environmentally sustainable renewable energy sources (Lee et al. 2012, p. 1). They infer that alternative energy sources, such as solar, provide an opportunity to create consumable power at minimal cost to the environment. The sustainable nature of these resources means SME can take advantage of the benefits of renewable, low pollutant energy creation, whilst conforming to both the cultural and industrial demands. "Solar energy offers a decentralised solution, easily adapted to poor infrastructures and ready for an expanded energy access to meet fast growing demand” (Cameron, 2009). SME contributions to development of this technology, facilitates the positive departure from cultural and industrial dependency on fossil fuels; methods that are harmful to the environment due to the creation of carbon dioxide emissions and other waste products. The generation of power through the burning of fossil fuels continues to harm the environment by these increasing gas emissions as depicted in figure 1. Figure 1. Global Fossil Carbon Emissions (Marland et al 2003)
With a growing population, this harm will continue to proportionally increase as the associated demand for energy equally increases. The need to invest in, and develop greener solutions to the meet the world’s energy demands, is not restricted to the energy production industry. Silverman and Mydin (2014) describe how considerable environmental conservation can be achieved through ecologically conscious design and use of renewable materials. “Using renewable energy makes us more dependent on climate and reduces our vulnerability to scarce, imported and increasingly costly fossil fuels” (Silverman and Mydin 2014, p. 94). This suggests that SMEs need to be mindful of the increasing cost of fossil fuels, and within the post Global Financial Crisis environment, be aware of the economic risks associated with maintaining high cost and vulnerable solutions to their energy needs. Silverman and Mydin suggest that the future for industry is through the use of technological innovation in building and manufacture design and through their choices of energy sources.
When choosing alternative energy sources, new and existing SME need to incorporate financial planning into their strategies. In both cases initial development or re-engineering costs may be high, however a balanced approach that incorporates both grid and non-grid…