What is in this article?:
- The Business of Being Green: How Investing in Green Technology Today May Be Critical for Success Tomorrow
- Good Business
Topping Diamond Wipes International's new manufacturing facility in Chino, Calif., is a glittering 3,360 panel solar installation that is already churning out enough power to offset nearly all of its energy needs. On especially sunny days, it can even exceed those needs.
The installation is part of an ongoing environmentally conscious program in which Diamond Wipes, a mid-sized producer of disposable wet wipes, has invested $1.6 million over the last year -- about eight percent of the company's yearly earnings.
In an announcement for the installation, the company calls the investment "a bold leap forward in its green initiative."
|Diamond Wipes CEO, Eve Yen, stands with the Chino, Calif. solar installation, which is expected to generate 548,544 kilowatt hours of electricity per year.|
This is probably an understatement.
The investment really highlights a fundamentally new way of doing business in a green economy, said Tom Hill, senior VP of marketing and sales and Diamond Wipes.
In this new model, consumer demand for green products from environmentally-focused companies is driving manufacturers to invest heavily in new technology with few (if any) immediate financial rewards.
"We feel we are being proactive in responding to a rapidly growing concern in the U.S. driven by the consumer," Hill said. Across the industry, he said that is translating "to more environmentally responsible management" among corporations, no matter the immediate cost.
He points to the solar installation as an example.
"The system we chose to use is an initial investment of about $1.6 million and we will see about 35 to 40 percent of that come back to us over time [through state and federal rebate programs]," he said. "But the bulk of this is on us. Based on projected savings, we're looking at a seven to eight year timeframe for payback."
In other words, Diamond Wipes has invested nearly a tenth of its 2011 earnings for the hope of (maybe) breaking even on energy savings sometime in the next decade.
From this perspective, the movement into solar seems absurd. Why would a company invest this amount of resources for a project with such far off and mild return on investment?
The answer: it's good business.