No Brainer — Commercial Buildings Should Save Money by Becoming More Energy Efficient

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Many owners and managers of commercial buildings are already enjoying significant savings with some very low-cost energy conservation methods (ECMs). In fact, with the right service provider, buildings can achieve significant savings on their energy bill right away. Such is the case with SunScience’s retrofit of the Airport Gardens offices in Reno. A real no brainer,… but more on this case study at the end.

Commercial building energy efficiency strategies (or energy efficiency strategies for any building) can be quick and easy, or can be more focused on the long term — but there are options to save significant money every step of the way.

Airport GArdens offices
Airport Gardens mid-sized office building

Oddly, not all building owners are aware – or even care about — the savings. Here are some industry facts that should motivate commercial building owners to become more energy efficient:

  • Savings of 5-20% on their energy bill can be achieved with little to no investment. Even more savings are achievable with small investments and hiring an energy service provider. Up to 75% savings are possible with financed capital improvements.
  • Upwards of 30% of building costs are attributed to energy expenses.
  • Commercial buildings account for 35% of electricity consumption, 45% of which is coal produced.
  • And for those environmentally minded, commercial buildings consume 20% of all energy used, contributing proportionately to greenhouse gas emissions.

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Why isn’t everyone on board?

Let’s look at some of the reasons — and rebuttals — why energy saving hold-outs are overlooking the advantages adopting ECMs. (You might be among them.)

1. Leased or rented buildings and offices often pass along utility costs (electricity, gas, water) to their tenants. Landlords may believe there’s no upside to investing in saving tenants on their energy bill. Rebuttal:

  • Being more energy efficient increases marketability of rental or leased space, especially when occupancy is low and lease rates are competitive, like now.
  • In cases where the landlord charges a “flat fee” to tenant that includes utilities, margins can increase in direct proportion to energy funds saved.
  • Increases value of property at resale.
  • Lowering tenants’ energy bill may increase occupancy retention, loyalty, tenant comfort, and productivity.
  • Even if the owner does not have “green” aspirations, the press likes to support these efforts (i.e. potentially free PR).

2. Many building owners, who see the value in greater energy efficiency, are daunted by not knowing where to begin. Suggestions:

  • Even before hiring a service provider, there’s an in-house assessment that can be done. This includes examining the age, operating condition, and service records of HVAC units, burners, fans, thermostats, meters, and other equipment. Make repairs as necessary.
  • Review lighting fixtures such as outdated and inefficient incandescents, replacing T-12 with T-8 fluorescents, or even upgrading to LED retrofits.
  • For tenants who control their own thermostats and lighting, find out what they are doing so to make behavior “efficiency” suggestions.
  • Determine a “model” of what you want to achieve, such as reducing your carbon footprint, reducing kWh, or just shaving off your energy bill.

3. The aforementioned can effect savings of 5-20%, depending on the building, and are often covered within existing operating budgets. (Turning off lights and HVAC systems when not in use can immediately save at least 2%.) The building manager may want to hire an Energy Management System (EMS) expert, or may follow these steps on their own. Here is the sequence:

  • Benchmarking — create an energy usage starting point with the Energy Star model as a standard. This will give you the criteria and steps needed for your type of building.
  • Auditing — initially, you may want to see improvements monthly, but after assurance that savings are real, quarterly or semi-annual will suffice. This can be done manually or with readily available software — some proprietary — offered by many EMS professionals. (Some of these companies are identified below.)
  • Implementation — to optimize energy savings at lowest outlay, it’s important to do the steps in sequence, such as repairing existing HVAC equipment, effecting tenant energy behaviors, and turning off equipment and lighting when not in use. Then benchmarking. Then auditing.

4. Capital improvements that can achieve energy efficiencies upwards of 75% are usually financed. These heavy investments must be carefully analyzed in terms of cost/reward, ROI, and expected payback. These are the subject for another article, but are summarized here:

Selecting an EMS service provider

There are literally hundreds of providers to chose from, but, fortunately, they tend to cluster in three general markets. For example:

1. For small-to-medium sized commercial buildings, the choices are fewer, are more attractively priced, and offer much shorter ROIs. Some “contract providers” are able to provide the benchmarking, auditing, and upgrading of basic equipment at minimal upfront cost. (Providers are paid from what they save the client on their energy bill).

  • Basic equipment may include smart thermostats, wireless energy sensors in key locations and attached to key devices, and web-based (cloud) communications. The key is the connecting software for both monitoring and control. Some contractors are working toward doing this for less than the amount saved from the customers’ energy bills, based on multi-year contracts. This means potential break-even after less than one year. Here are some of the companies in this mid-market space.
  • EnTouch Controls, GreenLogic (in the UK), Incenergy, Powerhouse Dynamics, Temsco, and SunScience Corporation (SSC). The case study referenced at the beginning of this article, that I’m personally familiar with, is the EMS project at the Airport Gardens office complex in Reno. The office complex hired SSC to save money on its monthly energy bill. While still in beta, actual results are pending, here are the contractual goals:
    – Install a “control” system to manage HVAC equipment and monitor power consumption to identify peak power consumption.
    – Use existing and installed equipment to mitigate peak billing rates.
    – Wattage and BTU savings goal is a minimum of 25%.

2. For large industrial, commercial, or government energy users. These EMS projects are almost always heavily financed with high margin contracts involving long payouts (years). As you would expect, large established companies are dominant here, such as:

  • Honeywell, Johnson Controls, Schneider Electric, IBM, Evolve, TelcoNet, EnerNoc, Tridium, and AristaPower. (This is a fractional list.)

3. At the other end of the spectrum is the residential or consumer market,which is potentially huge — however, very uniformed. Of course, there are early adopters, but most of this market is budget restricted and apathetic. Major players include:

  • Honeywell, Schneider Electric, Fujitsu, Meile, Samsung, AT&T, and even Honda. Residential is a very competitive market with low penetration — that is, marketing-intensive and expensive to enter.

While the battle wages in Washington and among private investors over funding for clean energy solutions such as solar and wind, it is good to know the “low-hanging fruit” of energy conservation is alive and well.

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