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Getting Started: Low Cost Electricity Savings

Sun, Mar 29, 2009

b. Save Money

I met a small manufacturer recently who expressed concern for rising electricity rates. He had been budgeting 3% increases in electricity in keeping with his history, and the past few years had shown increases of 15-20%. He wanted to know how to start a program to save electricity. He felt overwhelmed by the amount of information on the topic and was struggling to figure out what related to him.

His focus was on finding ways to create efficiency that had a limited impact on his cashflow. He was not looking to make capital investments, even ones that paid back quickly. Cashflow was too much of a concern – he did not have available cash for making even a small investment.

Before launching a program, start by setting a goal for energy savings. Targeting a 15% decrease in electricity costs is reasonable for a no cost / low cost program.

Here are some things to start with:

  1. Benchmark your buildings performance. Go to energystar.gov’s portfolio manager, create an account, and go through the process of entering information about your building. This will allow you to compare the energy efficiency of your space, to the efficiency of other similar spaces. For the relatively small amount of time you spend on this you will end up with plenty of ideas and a far better understanding of how to save money. I have never had a client unhappy to have spent the time benchmarking.
  2. Evaluate demand response. Demand response is a program where you get paid if you can commit to quickly lowering your energy usage. This can happen about 4 times per year.What happens is, you get a call from the utility that gives you about 2 hours to lower energy usage. If you can comply, you get a check for doing this. This manufacturer was not able to do this because he could not drop his energy load quickly – the money he’d get back was far lower than the money he’d lost by ceasing to manufacture. The clients I have that can participate love the program. There are ways for office and even retailers to participate. (Please let us know if you want more info on those experiences, or the names of vendors who do this.)
  3. If you pay more than a few thousand a month in electricity, and if you are in a state that allows it, see if you can get a lower price on your electricity. You can buy electricity from someone other than your main utility in states that are at least partially deregulated. If for example you were a Con Edison customer in New York you could direct Con Edison to buy your electricity from another utility. You would then pay the other utility for the electricity, while still paying Con Edison to deliver those electrons to you (these are transmission charges).
  4. BOMA has an excellent guide to reviewing your building. Download this immediately and review it with your staff. This is a great list of common sense items to remind you of what you should be doing.
  5. Start an employee awareness campaign. This one is probably the most simple and most obvious, and yet is seldom done. If you ask your staff to be conscious of energy savings, the results will surprise you. This starts by asking staff to do the obvious – turn off things they are not using. Encourage this with signage and brief training sessions. Evolve this into a program that rewards staff for identifying energy savings throughout the building.

Lighting is probably the next project to consider, depending on your budget. These projects usually involve some outlay of cash but the projects tend to payback quickly. It is possible to find a lighting vendor who will do the project for no cash up front, and will then get paid through a % of the money saved on the energy savings.

This list represents just a beginning. Please let us know what items interest you and we’ll expand on each. Also let us know if it is useful for us to provide lists of vendors we have experience with.

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  1. Helping Small Businesses Go Green, Profitably : Ecopreneurist Says:

    […] Lighting is the classic case. There are few projects that are so easy to justify, such as lighting. The ROI on a lighting project is a simple mathematical calculation. But the return on invested dollar doesn’t change the fact that the company first needs to have the invested dollar. Several issues remain as hurdles, including the absurd non-green leases most tenants have, and the limited cash companies have for an investment in non-core projects. Brights spots include creative financing plans, such as power-purchase agreements (PPAs) that require no up-front spending. […]

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