Originally published on The ECOreport.
Most small and medium sized businesses know that, over time, energy retrofits save money. Yet 95% do not do them. Their hesitation arises from the steep upfront costs. An innovative innovative financing company has come up with the obvious solution to this dilemma. Joule Assets pays for its customer’s HVAC & lighting retrofits.
Businesses pay nothing upfront and experience an immediate saving in their energy bill.
The cost of Joule Assets’ services is taken out of the subsequent savings from reduced monthly energy bills.
“These are buildings that are generally 50,000 square feet or less and do not have access to the sophisticated financial offerings that enable them to achieve energy efficiency improvements. We did a lot of research into savings and revenue opportunities by installing energy efficiency measures. At the same time we worked to develop and build a fund so that we could provide capital for these improvements. So we would bring knowledge on one hand and performance based capital on the other,” said Dennis Quinn, Co-founder & COO of Joule Assets.
Joule works with local businesses, helping them develop a comprehensive solution.
A Hypothetical Example
To give a hypothetical example, a business with an average monthly energy bill of $5,000 could immediately see this reduced to a fixed monthly price of $4,700 – $4,800. They will continue to pay this amount until the energy retrofits are paid for, regardless of their real usage.
The vast majority of contracts are between 4 to 5 years, and reduce customer’s energy usage anywhere from 15% to 40%.
So instead of consuming $5,000 a month worth of energy, the hypothetical customer’s real usage could drop to somewhere between $3,500 – $4,250.
“After the end of the term, all of the savings go to them,” Quinn explained.
Actual Case Studies
An actual case study comes from Highland Park Market, a century-old grocery chain in central Connecticut. The cost of electric and operational retrofits to their four 20,000 sq. ft. facilities would have been prohibitive, if it were not financed by Joule. The project consists of:
- The Agile VoltTM system to aggregate energy consumption data, reveal usage patterns, and minimize fuel consumption
- Sensors to monitor equipment and room temperatures. Freezer and cooler sensors send alerts when temperatures rise, thereby protecting food from spoiling, sparing inventory, and eliminating replacement costs. Room sensors automatically switch off lights and adjust temperature in unoccupied rooms, reducing energy consumption
- Replacing fluorescent lights with energy-efficient, cost-effective, color-adjustable, dimmable light-emitting diodes (LEDs). Adjustable LED settings allow Highland to display different sections of the stores to their best effect, drawing in customers and increasing sales; for example, lighting is warmer and more intimate in the wine department while cooler and brighter in the meat section.
- Advanced controllers to optimize operation of rooftop units (RTUs) to vary the speed of the fan and compressor, providing improved humidity control, reduced energy use, and extended equipment life.
- A building management system or central “brain” that monitors and controls equipment, and adjusts schedules and temperatures through wireless and cellular networks
As a result of these retrofits, Highland Park Market’s annual electricity bill was reduced by $500,000. Its CO2 emissions were 900 tons lower and the stores’ real estate value went up $1 million.
The 14,000 sq. ft. Westside Dance and Gymnastics Academy in Tigard, Oregon, is in almost constant use during the day and evening hours. Dancers rehearse in four studios, while gymnasts master routines in a spacious gym with 25-ft. cathedral ceilings. Joule and its management operations partner, Northwrite, found ways to reduce electrical consumption 30% and gas consumption 7%.
Similar improvements at two McDonald’s locations in New York state cut electricity costs by 23% and the amount of natural gas 20%.
Cutting Electricity Usage During Peak Demand Hours
In all three cases, Joule also secured reductions in its customers’ electrical bills by agreeing to cut usage during hours of peak demand.
“This (demonstrates) a small building’s capability to manage their loads for short lengths of time, to assist and help the grid. There is revenue available for that. It is another way (for customers) to pay for the systems being installed and another attribute that local contractors (usually) do not have much of a grasp on. Certainly the owners of the small businesses do not understand it as much. It allows us to fund projects by capturing the additional values and revenues we get from the grid,” said Quinn.
Joule offers local utilities an aggregate of available customer loads.
He explained, “They’ll pay you a certain amount of money for the promise to (reduce load during peak hours). Once they do that, they call on you maybe a couple of times a year — or maybe quite a bit — and you get paid another incremental amount for every hour or portion of an hour you perform. If you don’t perform as well, then that reservation payment is reduced. And it can be reduced quite quickly if you do not perform, because the grid needs this resource.”
The New York State Energy Research and Development Authority (NYSERDA) recently selected Joule Assets and Enbala Power Works to implement a similar program. NYSERDA’s projections show a 1,400,000 kilowatt-hour reduction in the state’s annual power consumption. This project is also expected to produce produce 500 kW of distributed energy assets.
NYSERDA has additional uses for the data obtained through this process. It can obtain a better understanding of each building’s energy usage and see where there is potential for future development. For example, this makes it possible to predict the benefits of a solar installation.
The Future Of Performance Based Solutions
Quinn predicts that market performance solutions, such as Joule offers, will become increasingly more common in the future.
“Our risk is reducing the customer’s utility bills enough so that we can recover our capital and pay for the improvements over that time. The customer is not at risk because they are paying a discount from day one. They get information to see how we are doing. It’s very transparent.”
Joule’s reward is access to a previously untapped market. In New York, for example, 99% of the city’s commercial enterprises are small to mid-sized businesses. More utilities across the country could soon be paying for energy savings through a pay-for-performance model.
Both businesses and utilities prefer benefits that are actually delivered. Joule guarantees them.
Top Photo Credit: One electrician working on a industrial panel mounting and assembling new wiring -Depositphotos; Dennis Quinn, Co-founder & COO of Joule Assets; Instructor trains student to repair air conditioning compressor – Depositphotos; All photos courtesy Joule Assets
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.