Sierra Nevada Brewing Co.: End of Incentives
Department or Administrative Unit
Ken Grossman walked into Bill Bales' office hoping to find an answer. Grossman, the owner of Sierra Nevada Brewing Company was considering the new reality that he was facing, and he brought the dilemma to Bales, his CFO. Grossman had made a commitment to environmental sustainability, the overriding cultural norm of his organization. Initially, the decision to install the five-phase solar array was made expecting California to provide tax incentives that would save the company a substantial amount of money on the installation. Grossman had received word that the company had run up against the "cap" for the State of California, which meant that they would no longer receive any subsidies for green power installments. With one phase of the installation yet to go, the question of possibly putting the money elsewhere kept nagging at Ken. Previous incentives meant the return on their environmental investments had always been fairly rapid, which enabled the company to continue aggressively pursuing their dedication to preserving the natural environment. Now, however, what to do? Finishing the solar array would be costly. Time to payback more than doubled from seven years to fifteen without the incentives from California State. As it stood, the brewery was light years ahead of industry standards and had completed the installation of the majority of the array.
Ceranic, T., Montiel, I. & Cook, W.S. (2011). Sierra Nevada Brewing Co.: End of incentives. Harvard Business Review 31(2), 1-12.
Harvard Business Review