What Are The Financial Incentives of A Green Business?

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What Are The Financial Incentives of A Green Business?

Sustainability and environmental commitment are no longer just corporate buzzwords, they’re now the standard when it comes to most business operations. As the world begins to experience the devastating effects of climate change, it’s now become imperative for every business — whether they’re small and mid-size enterprises (SME) or corporations — to adopt more eco-friendly practices.

But going green doesn’t just benefit the environment, it can also provide tons of financial benefits for a business. Not only are there numerous government subsidies and tax benefits available to businesses that implement green habits in their operations, but it can also positively impact sales and demand.

Regardless of what industry you belong to, there are plenty of advantages to enjoy when running a green business. Here are just a few of the many financial incentives that you can look forward to if you’re interested in making your business more environmentally-friendly.

Tax Credits

Solar Investment. This tax credit offers a 30% tax credit for businesses or solar power companies whose services include developing, installing, or funding solar energy. It also applies to companies that develop solar technology.

Green Transportation This is offered to business that purchases, uses, or deals with eco-friendly and sustainable vehicles. This includes businesses that sell or produce renewable diesel alternatives, biodiesel, or agri-biodiesel.

Green Building. Turning a building into a more sustainable and environmentally-friendly structure has plenty of tax benefits including a deduction of almost $1.80 per square foot if the building incorporates energy-efficient appliances, HVAC systems, lighting, windows, and more and successfully generates almost a 50% reduction in monthly energy expenditures.

Green Investment. Businesses that invest in green energy and power such as wind energy, solar energy, fuel cells, and hydroelectric energy are eligible for tax credits.

High Demand 

The increasing popularity of green products and green energy is a response to the demand from consumers for sustainable and eco-friendly products, practices, and services. This results in sizable profits for businesses that meet these criteria. Customers are becoming more loyal to companies that are outspoken about their commitment to environmental sustainability, ethical values, and production processes, and whose products make use of natural and organic ingredients.

Government Subsidies

The government offers plenty of financial subsidies, grants, and loans to business owners who are interested in becoming more eco-friendly. In particular, the Small Business Administration (SBA) has a wide range of financing options available for green businesses. Furthermore, the Environmental Protection Agency offers financial help to environmentally-conscious businesses with sustainable business practices.

Energy Savings

Energy-efficient solutions significantly reduce the cost of energy and water. Switching to more eco-friendly energy alternatives in the office such as using solar energy or making a change in production processes like reducing packaging can lower energy expenditures and production costs in the long-term. The best solution is to consider comparing and switching to a better solar electricity provider.
You can find green energy rates that are lower than many fossil fuel energy plans from Pulse Power Texas. Certain practices like turning off lights when not in use, reusing paper products, or increasing the temperature on the air conditioner by a few degrees can also be extremely helpful in this regard.


Reducing, reusing, and recycling waste can significantly lower office equipment costs as well as waste disposal costs. It’s also easy to do — all it takes is to ask employees to reduce the amount of waste produced, reuse materials whenever possible, and recycle materials by using them for a different purpose.


Green innovation can make business operations incredibly efficient, thus improving productivity and profits. Examples of productivity-boosting green technology include self-sufficient machinery, fleet management, remote work technology, and cloud computing.

Brand Image

Going green has been proven to enhance brand image and give companies an edge over their competitors. According to the Natural Marketing Institute‘s survey on consumer behavior, over 58% of people take into account a company’s commitment to the environment and sustainable practices, and will more likely patronize the services and products of companies who devote themselves to these efforts. That’s a prospective audience of almost 70 million Americans who are inclined to support businesses that take a conscious environmentally-friendly approach to their operations.


Putting environmental commitment and sustainability at the forefront of a business plan makes it more attractive to investors, lenders, and venture capitalists — especially now that green business practices are more necessary than ever. It makes the business stand out from the crowd, and it also gives stockholders more of a reason to support the business out of principle, and not only because of financial viability.

Low Turnover 

Sustainable business practices and green approaches to business operations have a positive effect on working environments. This results in a happier, healthier workforce, and reduced turnover rates. The cost of having to recruit and train new employees can become a financial burden, so it’s important to keep employee morale high. This means that investing in green practices is essentially investing in the long-term satisfaction and health of the workforce, thus boosting profits and lowering unnecessary expenditures.

There’s no better time than now to start adopting a more sustainable and green approach to a business. These financial benefits are solid proof of that.

Paul Petersen

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