Top 3 Industrial Barriers To Energy Efficiency, & How To Overcome Them

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By: Scott Tew, Executive Director, Center for Energy Efficiency & Sustainability at Ingersoll Rand

industrial efficiencyWe all think we know about energy efficiency. We make an effort to turn off the lights when we leave the room and close the refrigerator door after removing food. It has become clear that it’s important for consumers to be energy efficient but what about industrial organizations? A 10% improvement in the energy efficiency of commercial and industrial buildings would amount to $20 billion in savings and the level of greenhouse gas emissions (GHGs) prevented would be equal to the emissions from about 30 million vehicles.* Given these numbers, why aren’t businesses and industries prioritizing energy efficiency?

It’s safe to say that most executives may not be experts on how much energy industrial facilities consume. As equipment manufacturers and solution providers, it is up to us to raise the level of awareness and provide reliable systems and services that can help organizations dramatically increase energy efficiency. More importantly, overcoming energy efficiency barriers in the industrial space coupled with employee engagement will help the US reach the Energy 2030 goal. So what are the top three barriers to energy efficiency in the industrial space, and how can we overcome them?

Regulatory Uncertainty

Efficiency standards and emerging options for clean or renewable energy sources are constantly debated and revised. Because of this, businesses face a patchwork of regulations that impact decision-making and product designs. At times, this may mean that businesses are hesitant to make significant changes or investments for fear that they may not meet future regulatory standards.

Striking the right balance between government incentives and regulations around energy efficiency is not easy. Red tape and mixed messages are costly to business and slow the adoption of more efficient technologies. The industrial market needs clear long-term signals, rational expectations, and opportunities for a reasonable return on investment. But with the manufacturing sector responsible for 27% of global greenhouse gas emissions, it is a task that should be embraced by both governments and the private sector.

For instance, getting to the next level of energy efficiency in an industrial setting requires a system-level approach that observes and understands many other factors, including local climate, total building energy load, equipment sizing and specifications, how and when the building is used, and the role of non-system components. Under existing regulations, few of these factors are considered when determining whether a particular system meets energy efficiency standards — and thus, the confusion around energy efficiency regulations continues.

Lack of Market Demand

Given the competing priorities for capital, companies may not recognize the long-term value of reduced energy use (and indirectly reduced GHGs) because new technologies can be more expensive and can increase short-term operating costs. So despite growing consumer awareness, without changes in the value paradigm in the industrial sector, progress toward better efficiency will be slower.

For example, consumers typically perceive purchased appliances and devices to be more energy efficient than they actually are. They underuse rebates and incentives that would make purchasing more-efficient appliances more affordable. And even when consumers buy these appliances, they sometimes fail to do their part, such as use recommended settings, to ensure they capture the full energy-saving potential.

The slow adoption of consumer-level energy efficiency purchasing decisions has an impact on decisions made at the industrial market level as well. One solution that may help is the adoption of more accurate rating systems. These systems would help ensure the entire asset or system is taken into consideration, including the size, the purpose of the product, and the product or system lifecycle. Regulations should be expanded to include product designs that meet or exceed energy efficiency standards as well as address how the product and system should be maintained to meet the performance expectations. This approach would ensure that efficiency is not lost over time and the product and systems are operating as envisioned from the beginning.

Addressing Local Climates

In high ambient climates, energy efficient buildings are key to cost savings for companies. Many manufacturers operate plants across varied climate zones and have a need for solutions that meet or exceed efficiency standards which take into account their individual climate.

Barriers to low energy efficiency in extreme temperatures include the lack of well-defined energy design concepts adapted to severe climate conditions, high costs for construction and maintenance, incorrect estimates that do not show true costs, and the lack of suitable products on the market. Ensuring that systems perform their best in cold and hot climates requires specific design and construction methods and concepts which differ from those used for traditional construction. The general principles of low industrial building energy design are to minimize heat loss and reduce energy consumption, maximize solar and internal heat gains, and substitute the energy required in the building with renewable energy.


Regulatory uncertainty, market demand, and addressing local climates are the main roadblocks to energy efficiency in the industrial sector — but these can all be overcome. Increasingly sophisticated technologies and systems, well-defined regulations and new building design concepts can help to remove many of these barriers and increase the return on investments in efficiency. These measures coupled with more complementary rewards are needed. For example, encouraging the industrial building sector to invest in low-energy design through economic incentives, targeting information and campaigns to change attitudes towards low energy design, and specialized training aimed at all stakeholders.

The industrial sector offers tremendous opportunity for energy savings, and a significant opportunity to instill the principle of energy efficiency within facilities that, in turn, employ and influence millions of people. Otherwise put, the industrial market inevitably affects how consumers think about energy efficiency. Because of this, industrial leaders should work together to bring cost-effective, energy-efficient, and safe products to the market ahead of regulation for the benefit of customers, the environment, and the industrial sector itself.

About the Author: Scott Tew is the founder and leader of the Center for Energy Efficiency & Sustainability at Ingersoll Rand (CEES), which supports all of the company’s strategic brands – Club Car, Ingersoll Rand, Trane and Thermo King – and is responsible for forward-looking sustainability initiatives. Since the CEES was formed in 2010, Ingersoll Rand has successfully exceeded its long-term goals in energy use and waste reduction, while embedding sustainability in all parts of the product development process. Tew’s recent efforts have led to the development of world-class initiatives including the creation of a green product portfolio, personalized employee engagement programs, and unique research on unmet needs in the green space. Tew manages all sustainability-related public transparency, advocacy, reporting and goal setting initiatives for the company. Ingersoll Rand has garnered recognition for these successful sustainability practices in Andy Savitz’ book The Triple Bottom Line, among others.

*Energy Information Administration. “2003 CBECS Detailed Tables. Table C4A. Expenditures for Sum of Major Fuels for All Buildings, 2003.” December 2006. 1 June 2007 . Energy Information Administration. “2002 Energy Consumption by Manufacturers–Data Tables. Table 7.9 Expenditures for Purchased Energy Sources, 2002.” 2002. 1 June 2007 .

6 Inventory of U.S. Greenhouse Gas and Sinks: 1990-2005. “USEPA #430-R-07-002, Table 2-16: U.S. Greenhouse Gas Emissions by Economic Sector and Gas with Electricity-Related Emissions.” April 2007. 14 June 2007 . From Table 2-16 US Greenhouse Gas Emissions by Economic Sector (CPPD Approved Source) Commercial Total CO2 = 1024.98 mmt Industrial – Electricity Related Only CO2 = 679.7 mmt Total CO2 = 1704.68 mmt Using US Climate Technology Cooperation Gateway Greenhouse Gas Equivalencies Calculator (CPPD Approved Source/Calculator) 1704.68 Million Metric Tons CO2 = 304,951,699 vehicles; 10% reduction for Challenge = approximately 30 million vehicles (Source: EPA).

Image: Industrial efficiency symbol via Shutterstock

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