Executive Summary

Small ethnic-owned businesses (EOBs) are at risk of being left behind in the transition to renewable energy. It is critical to ensure their viability as they are essential to communities of color, providing jobs and much-needed goods and services. Entrepreneurship also offers an opportunity to address wealth gaps. Effective policies, programs, and strategies will require detailed knowledge about the challenges facing these businesses in adapting to climate change.

To better understand the challenges facing EOBs and to assist the Los Angeles Department of Water and Power (LADWP) in developing equitable policies, programs, and practices, the UCLA Center for Neighborhood Knowledge and the UCLA Latino Policy and Politics Institute embarked on a one-year community informed research project to identify the hurdles facing small EOBs and entrepreneurs in the Los Angeles region as LADWP commits to 100% renewable energy by 2035.

A survey of over 500 businesses and qualitative input yielded six key takeaways: 

1. Very few EOBs understand the potential consequences of transiting to 100% renewable energy. Only one in ten respondents stated that they were aware of the likely impacts.
2. Almost a third of small EOBs are energy-burdened and struggle to pay their utility bills.
3. Over half of EOBs reported having already been hurt by climate change, and nearly half expect negative impacts in their future.
4. EOBs identified payment programs to fund upgrades to existing equipment, multilingual educational materials to understand how their business can transition, and new energy efficiency equipment as policy priorities to transition to 100% renewable energy.
5. Direct outreach to small EOBs, small ethnic business serving organizations, and in-language accessibility is necessary to reach entrepreneurs who are typically excluded from traditional business studies.
6. LADWP does not currently have a unified strategy to collect and analyze internal data to better understand their small business customers in terms of energy consumption and program participation. 

Based on these findings, we offer five key recommendations: 

1. Evaluate recent and current small-business energy efficiency programs to identify which have been effective in engaging small EOBs to successfully reduce energy consumption and costs.
2. Develop more targeted policies, programs, and practices to assist small businesses and eliminate participation barriers that EOBs face.
3. Partner with business serving community-based organizations and other trusted agencies to provide technical assistance and better engage small business customers, particularly EOBs. 
4. Collect and analyze more robust and precise data on energy usage, energy burden and location of small business customers in order to prioritize its outreach to the most disadvantaged businesses and neighborhoods.
5. Examine the legal mechanisms that would enable utilities to provide financial assistance to small businesses and EOBs to reduce barriers to access substantive energy efficiency equipment upgrades, which are typically cost-prohibitive.

Read the full report here.