Home » Corporate Finance » Budgeting » Reap Rewards of Lower Energy Costs

Reap Rewards of Lower Energy Costs

When it comes to energy efficiency, advances occur at a rapid clip. New tools, technologies and tracking mechanisms make it increasingly easy to collect data and make cost-saving moves. Here’s how to track power use and enlist allies to boost workplace energy efficiency.

To determine whether your business uses energy efficiently, ask two questions: How much does my company spend on energy each month? How does that figure stack up against similar businesses in my industry?

“Many business owners know the answer to the first question,” says Kevin Skurski, director of marketing at AirAdvice, a Portland, Ore.-based firm that offers energy services and technologies. “But they may not know if that’s good or bad compared to others.”

Say you spend $5,000 a month on energy. If your industry peers with similar facilities spend significantly less, you’re at a competitive disadvantage.

Tracking energy consumption is a good starting point. Armed with data on heating, cooling, lighting and other types of energy use, you can spot patterns, investigate anomalies and reduce waste.

For most businesses, buildings lead the way in gobbling up energy. There’s huge potential for energy savings—as much as 50 percent—in modifying or upgrading control systems in buildings and making other simple adjustments.

By studying your utility bills, you can identify usage trends. While bouts of extreme weather might justify spikes in heat or air conditioning, you may discover that your heating and cooling systems are working too hard overnight or operating inefficiently during the day.

If your managers override a thermostat’s automatic program in response to employee complaints, for instance, it can upset a system that’s designed to operate at peak productivity. Individuals who fiddle with a thermostat’s set points or schedules may not realize to what extent their actions waste energy.

The solution is to educate your workforce and incentivize them to conserve. When everyone tracks the same data that you track—and understands the high costs involved—you’re more apt to gain buy-in from all levels.

Benchmark Your Energy Use

Raising awareness about the need to save energy lays the foundation for substantial cost savings. The next step is gathering information so that you can take low-cost steps to produce results.

Some of the best energy-reduction strategies are free. Ask your heating and cooling contractor about conducting a no-cost energy audit. In addition to heating and cooling systems, contractors can analyze lighting, airflow and other factors that affect energy use.

“Your HVAC contractor is a good resource because he knows your building,” Skurski says. “If he knows from experience how long it takes to heat up an area, he can change the schedule so that heat goes on in that area at 5:00 a.m. rather than 4:00 a.m.”

Another free resource is Energy Star’s Portfolio Manager, an online benchmarking tool that tracks and assesses energy and water use in buildings and production plants. After entering data such as your recent utility bills, the program helps you rate your facility’s energy performance on a 1–100 scale relative to similar buildings across the United States.

Utility companies, facilities management firms, state government agencies, environmental consultants and nonprofit organizations may also offer programs to evaluate commercial energy use. In most cases, they will analyze your business and provide a menu of opportunities to invest in improvement.

At dozens of university-based “Industrial Assessment Centers” (IACs) around the country, the U.S. Department of Energy funds free energy audits for manufacturing businesses that meet certain conditions. Qualifying firms must have less than 500 employees, gross annual sales under $100 million and utility bills that fall within certain parameters.

Study Your Building

When it comes to energy efficiency, advances occur at a rapid clip. New tools, technologies and tracking mechanisms make it increasingly easy to collect data and make cost-saving moves.

“A common misconception for business owners is they think they’ve already made energy efficiency improvements and there’s nothing left to do,” says Steven Nadel, executive director of the American Council for an Energy-Efficient Economy in Washington, D.C. “They may think, ‘I did this 10 years ago.’ But developing technologies can offer significant savings compared to older technologies.”

For example, installing new “Super T8” bulbs or metal halide lamps can save about 15 percent compared to older lighting, Nadel says. He suggests having an expert conduct a “retro-commissioning study” of your facility to propose cost-effective upgrades. Ask your utility provider to recommend an engineering firm to do the study, which examines a building’s mechanical and electrical systems. Some utilities offer rebates or incentives for commissioning studies, especially if you replace outmoded equipment or fix other problems based on the study’s findings, so ask about discounts.

If the report identifies higher-cost options to boost energy efficiency, calculating return-on-investment is straightforward: Compare the cost for each remediation required to reduce energy use with the payback period. Many recommendations in commissioning studies produce substantial savings within one year.

Four Easy Fixes to Save Energy

Saving energy is easier if you know where to start. Here are the four issues that tend to present the most problems in office buildings and production facilities:

  1. Equipment Scheduling. Equipment runs when not needed.
  2. Sensor Error. Faulty sensor data causes increased heating, cooling or equipment operation.
  3. Simultaneous Heating and Cooling. The same air gets heated and cooled, or hot and cold air mixes to make warm air.
  4. Outside Air Use. Economizer (a device that ventilates outside air to enhance indoor air) does not function optimally, or excessive outside air causes increased heating and/or mechanical cooling.

Source: BetterBricks.com

Links and Resources

  • Use the “symptom-diagnosis tool” on BetterBricks.com to learn how to identify energy waste caused by equipment such as boilers, chillers and motors (http://betterbricks.com/building-operations/tools/symptom-diagnosis-tool-0).
  • For practical ideas to reduce your organization’s “climate footprint,” see Clean Air-Cool Planet’s website (www.cleanair-coolplanet.org/OfficeFootprint.php).
  • The IFMA Foundation offers a series of downloadable how-to guides on topics such as lighting, water usage and no-cost/low-cost energy saving steps (www.ifmafoundation.org/programs/sustain_wp.cfm).
  • American Council for an Energy-Efficient Economy provides publications on topics ranging from federal energy-efficiency tax incentives to equipment efficiency standards (www.aceee.org/sector/commercial).
  • To locate the closest Industrial Assessment Center to your area and see a Top Ten list of recommendations, check the U.S. Department of Energy’s Industrial Technologies Program website (http://iac.rutgers.edu/database).
  • The U.S. Green Business Council (USGBC) is a nonprofit organization that certifies sustainable businesses and provides a clearinghouse of information about green building practices (www.usgbc.org).

About morey stettner

Morey Stettner is the editor of Managing People at Work and the author of five business books, including Skills for New Managers (McGraw-Hill). Based in Portsmouth, N.H., he coaches executives on their communication skills.