Small business energy efficiency programs have the potential to deliver meaningful benefits to businesses of all sizes and backgrounds — lowering utility bills, improving working conditions, and supporting sustainability goals. But realizing that potential requires more than good intentions. It requires intentional program design, equitable access strategies, and a willingness to measure success beyond traditional participation metrics.
Program administrators, utilities, and community organizations across California and beyond are learning what it takes to build genuine equity into energy efficiency work. Environmental Innovations has been at the forefront of this effort, serving programs such as the California Green Business Network (CAGBN), the Small Business Saver program (San Diego Gas & Electric), and Simplified Savings (Pacific Gas and Electric), all ratepayer-funded initiatives focused on small business engagement. The lessons drawn from these programs offer practical roadmaps for the work ahead.
Recognizing the Gap – Why Small Businesses in Underserved Communities Are Left Out
Green Business Programs (GBPs) are sustainability certification and assistance initiatives supported by the California Green Business Network (CAGBN), with similar efforts operating in many other states. Through a locally delivered, community-based model, they have long provided small and medium-sized businesses with sustainability resources, technical assistance, and recognition for their environmental accomplishments.
In practice, however, a recurring barrier has emerged: business owners who are eager to participate often cannot meet basic program requirements such as upgrading from fluorescent to LED lighting, because the upfront cost is out of reach. This matters beyond the program participation question. Fluorescent lighting is significantly less energy efficient than LED technology and can also create operational and environmental concerns due to mercury-containing lamps that require specialized handling and disposal when broken. Upgrading is not merely an environmental choice, it’s a practical one.
Dedicated energy efficiency programs that could cover such upgrades for free have often been designed around larger commercial projects, leaving small businesses without access. On-bill financing options have similarly been structured in ways that exclude smaller-scale work. The result is that the businesses most likely to benefit from energy efficiency support are larger, more affluent businesses. Small businesses operating on thin margins, located in underserved communities, or facing language-access barriers are frequently excluded from programs they nonetheless help fund through their utility bills.
In 2013, the California Green Business Network conducted its own assessment and found a related pattern at the geographic level: its services had been concentrating in communities that were relatively wealthy, well-educated, and predominantly white. Jurisdictions that were low-income or historically disadvantaged received the least support, and businesses where English was not the primary language were the least likely to be reached.
The findings underscored an important reality: without intentional intervention, even well-meaning sustainability programs tend to follow existing patterns of access, investment, and institutional connectivity. These patterns are not unique to California. They reflect structural tendencies that show up across many voluntary business programs, and they point to program design changes that can make a real difference.
In response, CAGBN began exploring partnerships with rate-payer funded energy efficiency programs as a way to deliver direct energy upgrades to participating businesses. However, they quickly encountered a recurring challenge: many underserved businesses and communities were still being screened out of traditional program pathways due to project size thresholds, eligibility rules, financing limitations, or administrative barriers. This realization led CAGBN and Environmental Innovations to explore more direct, community-centered delivery models designed specifically for harder-to-reach businesses.
How to Redesign Energy Efficiency Programs for Equity
With input from community-based organizations and a newly formed Equity Committee, the California Green Business Network undertook a deliberate redesign of its program. The changes were practical, targeted, and informed by the communities the program hoped to reach. They offer a useful model for any organization looking to strengthen equity in its energy efficiency work.
Multilingual outreach and materials. Translating program resources and conducting outreach in the languages communities actually speak is a foundational step. It signals that a program is genuinely for everyone, and it removes a barrier that quietly excludes a significant portion of potential participants.
Targeted funding for underserved jurisdictions. Directing additional resources toward areas that have historically received less program support helps correct imbalances over time. Establishing clear criteria for what constitutes “hard to reach” businesses, and providing supplemental support for those participants, ensures that limited funding goes where the need is greatest.
Entry-level program pathways. Not every business is ready to pursue full certification. Creating a meaningful on-ramp through an entry-level tier that offers resources and recognition allows businesses that are earlier in their sustainability journey to engage and build momentum.
Gap-filling rebates and prebates. Expanding the range of covered upgrades to include items like LED lighting, recycled content paper, and non-toxic cleaning products addresses the practical gaps that other programs leave behind and meets businesses where their actual needs are.
The outcomes of these changes extended well beyond energy metrics. Program staff documented stories not just of kilowatt-hours saved, but of business owners becoming sustainability champions in their neighborhoods and subsequently achieving the Triple Bottom Line of positive outcomes for People, Planet, and Profit. The program’s participant base began to more accurately reflect the full diversity of California’s business community. The number of certified businesses in disadvantaged communities increased from 13% to 45% in a period of five years.
The number of certified businesses in disadvantaged communities increased from 13% to 45% in a period of five years.
Understanding the Program Landscape
Small business energy efficiency portfolios in California are structured across three segments: Market Acquisition, Market Support, and Equity. Understanding how these segments work and how they interact is essential for designing equity programs that are both effective and sustainable.
Market Acquisition programs are typically designed around measured or forecasted energy savings and are evaluated heavily on cost-effectiveness and portfolio performance metrics. Depending on the program structure, savings may be determined through deemed savings values, modeled savings, or normalized metered energy consumption (NMEC) methodologies that compare energy use before and after project implementation.
Market support programs reference “claimable savings” only, which are active only deemed savings averages maintained in the California Electronic Technical Reference Manual (eTRM). These are energy upgrades for which estimated kWh savings are well documented, so energy savings are based on an average for previously measured results. Over time, as technologies reach market saturation, eTRM measures are sunsetted or inactivated. Meaning those measures may no longer generate claimable savings within certain program structures, even though the underlying upgrades may still provide meaningful energy reductions and operational benefits for participating businesses.
Equity programs, as defined by the CPUC, are not held to cost-effectiveness standards on their own. They are designed specifically to bring energy efficiency resources to businesses that market-rate programs have not reached. They can contribute to a portfolio’s overall claimed savings picture, but their primary purpose is gap-filling. Many of the inactivated measures on the eTRM database have never been offered to these businesses and these businesses tend to have the oldest energy infrastructure as well.
A critical tension arises here. Many of the upgrades most needed in underserved communities such as LED lighting, occupancy sensors, smart thermostats, smart power strips, have already been sunsetted on the eTRM because they reached market saturation. In many cases, however, that market saturation occurred primarily in well-resourced and highly engaged communities, while underserved small businesses were bypassed by earlier program cycles and still operate older, inefficient equipment today.
This means that equity program administrators face a meaningful design choice: pursue claimed savings by limiting upgrades to those still on the eTRM, or use equity segment funds for true gap-filling, even when it doesn’t generate “claimable savings” but still saves energy. Traditional cost-effectiveness frameworks do not always capture the full value of equity-focused interventions, particularly when programs improve health, safety, business stability, language accessibility, or long-term community participation. The latter approach unlocks several important benefits:
Broader participation. When programs don’t require the complex data tracking infrastructure that claimed savings demand, smaller companies and community-based organizations can participate without prohibitive overhead.
Stronger community relationships. Programs built around a community’s real needs rather than a narrow set of technically eligible upgrades are more likely to serve a broader range of business types, earn trust, and sustain long-term engagement. When program offerings align with a business’s immediate operational priorities, that trust deepens and participation follows naturally.
Tangible health, safety, and comfort improvements. Replacing fluorescent lighting or installing basic efficiency controls doesn’t just reduce a utility bill, it improves the physical environment where employees and customers spend their time every day.
6 Principles for Effective Small Business Energy Equity Programs
Because energy efficiency programs are funded by utility ratepayers, equitable access is not simply a program objective, it is part of the responsibility of ensuring that the benefits of public-purpose funding are distributed fairly across the communities that support it. Designing programs to serve the full range of contributing ratepayers, especially those with the greatest need and the fewest resources, is both a practical and an ethical imperative.
The most effective equity-focused programs tend to share a set of common principles:
- Meet businesses where they are. Program design should start with an honest assessment of who is being served and who is not. That means gathering input from underserved communities, not just inferring their needs from a distance. Talk to community based organizations. Survey businesses.
- Offer resources that solve real problems. The upgrades and services a program provides should reflect the actual pain points of participating businesses — high bills, aging equipment, health and safety concerns — not just what is technically eligible for claimed savings. These businesses were left out of previous offerings and may still need incentivized inactive eTRM measures.
- Remove financial and logistical barriers. Upfront costs, complex application processes, and English-only materials are all barriers that disproportionately affect the businesses equity programs are meant to serve. Effective programs don’t just acknowledge these obstacles, they actively work to eliminate them.
- Build in accountability. Programs should track not just energy outcomes, but who they are serving. Regular assessment of participant demographics and geographic reach allows for ongoing course correction.
- Fill gaps and layer incentives. When a needed upgrade falls outside what a single program can cover, don’t stop there. Look for opportunities to stack support through additional complementary program offerings, rebates from other local utilities, or no- to low-interest financing options. Meeting a business where it is often means assembling resources from more than one place.
- Invest in community relationships. Lasting impact comes from trust built over time. Partnering with community-based organizations, hiring outreach staff who reflect the communities being served, and following through on commitments are all essential to earning and sustaining that trust.
When these principles are put into practice, the results go beyond energy savings. Small businesses become sustainability leaders in their communities, demonstrating that profitability and environmental responsibility can reinforce rather than compete with each other. Programs better fulfill their mandate to serve all ratepayers equitably, and communities that have historically been overlooked gain access to resources that can meaningfully improve their quality of life.
The experience of Environmental Innovations’ equity work with the California Green Business Network shows what becomes possible when programs are willing to honestly examine their reach, listen carefully to underserved communities, and adapt. This kind of intentional, community-centered design is what transforms an energy efficiency program into a long-term investment in community resilience, economic equity, and environmental progress.