As the chief financial officer at Electric Guard Dog, a company that has been one of the original pioneers in renewable energy for the security industry, I’ve studied our system for the cost/benefit ratio of our investment in solar power in detail. And I’ve come to realize that while the initial outlay is sometimes higher, the savings procured by both our company and our customers are initially subtle, but compound over time.
Electric Guard Dog has been running on solar power since the system was patented in 1991. Our founder, Bill Mullis had a passion for renewable energy and recycled materials, as well as a driving need for sustainable power: situated in the South, his invention needed to work through the frequent power outages caused by Carolina thunderstorms. He also wanted our customers to know that our system wouldn’t add a penny in cost beyond our invoice and there would be no surprises when the electric bill came in. So he designed a systemthat utilized renewable solar power.
Customers saved money on power, labor, and insurance with that system. They experienced immediate performance benefits too: unlike alarms or cameras, power to the system couldn’t be cut, and unlike guards, it was indefatigable in vigilance.
But solar panels were very expensive in 1991 (costs have dropped from more than $10 a watt in the 1980’s to less than $1 a watt today), which significantly drove up our building costs, as well as those of any other business in the renewable energy space. They were so daunting, in fact, that the perception of vastly higher costs persists to this day, despite recent trends.
Green energy isn’t merely a fashion any more. It’s a financial reality that has real and enduring benefits for the businesses that make the switch. Global efforts to produce better, faster, cheaper renewable energy products, combined with our own government’s incentives to ignite investment and development has produced several inviting consequences for security businesses:
- Reduced Cost of Materials. Pricing of solar products has been coming down at a rate of 20 percent per year for at least the last two years, arguably longer.
- Tax Credits. Many states and the federal government offer tax credits and other incentives for using renewable energy sources like solar power.
- Durability. Solar panels are very durable. We rarely have to replace the panels, which saves money in terms of both materials and labor.
- Training and Regulations. The costs and training required to comply with regulations related to solar power is often much less rigorous than those required for AC power.
- Customer Retention.Customers’ savings are substantial, which assists greatly with customer retention and therefore monthly RMR. Customers save on energy bills, labor (due to a reduced need for guards), and insurance (due to theft prevention), not to mention the savings they enjoy at remote sites, where they save substantial amounts of money purely by avoiding the expensive installation of routing AC power.
The Proof is in the Bottom Line
As a CFO, I always insist on seeing the numbers before I render judgment on any investment — all the numbers. And I’ve recently had to review our solar cost/benefit ratio, thanks to Hurricane Sandy. Remember Bill Mullis had to design a system that outwitted Carolina thunderstorms? Our bottom line from Hurricane Sandy is a testament to his success: our systems were able to withstand the storm and continue operating regardless of the state of electrical power in the area. In fact, we had less than a dozen customers who even needed service visits, a true sign of the durability and continuity provided by solar power.
Those aren’t just sustainable savings thanks to solar power. They’re stunning.