How to Lower Your Company's Energy Bills
You changed the light bulbs and lowered the thermostat -- and for a long time, that was enough. Reducing energy use was traditionally for environmental crusaders. But energy costs have been rising in recent years and new taxes are on the horizon, so every business has reason to become more efficient.
Fortunately, opportunities to save energy -- and money -- are closer at hand than most people realize. And now is the time to act: Some of the green tax incentives enacted as part of recent stimulus bills expire in a year or two. These pages will introduce you to measures that can pay for themselves, and then some, in a few years or sooner. There are other benefits, too: Green buildings tend to be more comfortable, which improves morale, boosts productivity, and lowers turnover.
Successfully reducing energy use demands a commitment from company leaders to set goals and follow through. "Low hanging fruit is easy to find," says Betsy Dutrow, of the EPA's Energy Star program, "but it grows back if you don't have good practices and procedures in place."
These pages make reference to payback time for energy-saving investments. We use what is known as the simple method: total investment divided by annual savings, using average energy prices. The calculations do not include the time value of money or tax incentives. Consider these as you draw your conclusions.
1. Change Your Habits
Many people think new gizmos are the secret to reining in energy use, but that's not necessarily the case. "The way the buildings are managed and operated can have an even bigger impact than the technology in the building," says Doug Gatlin, of the U.S. Green Building Council. Before undertaking a retrofit, mine your day-to-day operations for substantial savings.
Benchmark energy consumption. Before you begin, you have to know your starting point. This is something you can figure out for yourself, but many companies can get free government assistance. The EPA's Energy Star program (energystar.gov) offers a set of tools called Portfolio Manager to help you gauge your energy and water use and has developed spreadsheets ("energy performance indicators") that allow manufacturers in certain industries to judge their own consumption.
Recommission building systems. Commissioning, which simply means making sure building systems are running as designed, is an essential part of building construction -- and because these systems degrade over time, they must be periodically retested. Such re- (or retro-) commissioning pays huge dividends, says a recent Department of Energy-sponsored study: a 15 percent reduction in energy use at a cost of just 27 cents per square foot, for a payback time of less than nine months.
Commissioning entails an analysis and a tune-up, and usually requires the services of an energy auditor. Systems also have to be maintained and recommissioned every three to five years. (Renters should ask landlords to undertake recommissioning.)
Undertake preventive maintenance. A simple example: Change light bulbs (lamps, in energy-efficiency-business lingo) simultaneously at regular intervals, not as each burns out. Fluorescent bulbs degrade, and fixtures with burned-out bulbs draw power. A group relamping when the bulbs reach about 80 percent of their rated life will save money on both energy and labor.
2. Renovate Your Workspace
Commercial facilities. How you retrofit a building depends on how it's configured and operated, as well as its location. Ideally, renovations would be simultaneous, because efficiencies multiply when retrofits are coordinated. But when that's not possible, follow this order:
Start with lighting. Overhead lighting is the biggest electricity hog in the typical commercial building, and the traditional T12 (1.5-inch) fluorescent tube dates from the 1930s. Moreover, the heat generated by such bulbs taxes the building's cooling system. Replace the lamps with newer high-performance T8 (1-inch) tubes and the fixture's magnetic ballasts (which regulate current to the bulb) with electronic ones, and you will reduce the electric load 42 percent, according to the energy analysts at E Source. New lenses and reflectors on the fixtures will reduce energy consumption 71 percent. Daylight dimming controls and occupancy sensors reduce the load 83 percent and have a payback of just 3.3 years.
Reduce supplemental loads. Inefficient office equipment does not just suck more electricity; like lighting, it also warms the interior space. Highly efficient Energy Star equipment and appliances often carry no cost premium but use 20 percent to 50 percent less energy. Train employees to use energy-saving features and to turn off equipment at the end of the day.
Seal out the elements. Window improvements can be as simple as coating the glass with a heat-blocking film or installing shades, or as involved as wholesale replacement with windows that block the sun, insulate against the ambient temperature, or both. A so-called cool roof uses highly reflective materials to lower the surface temperature by up to 100 degrees. This treatment makes the most sense in a low building and in a sunny climate. Go to Energy Star's roofcalc.com to estimate a cool roof's savings.
Reengineer the HVAC. The retrofits will probably reduce the building's heating and cooling requirements -- and builders traditionally install oversize systems even though air conditioning operates most efficiently at full power. The upshot: You can probably upgrade to a smaller system that uses less energy. Today's heating and cooling units are up to 40 percent more efficient than those built 20 years ago. If you cannot replace yours, improve it with a variable speed drive that controls motor speed (see below).
Factories. The biggest energy draw in an industrial facility is the industrial process, which also adds to the plant's cooling load. Processes vary across industries, but motors are common to most of them, and they are an easy place in which to find energy savings. New, highly efficient NEMA premium motors (NEMA is the National Electrical Manufacturers Association) are up to 8 percent more efficient than the oldest motors now deployed. Most motor manufacturers have free software to calculate the energy savings of a new motor; the DOE has a version, MotorMaster+. A variable speed drive, which can be attached to motors on pumps and fans, is an even more powerful tool; it can increase the system's energy efficiency 50 percent, with a payback of as little as six months.
Further, certain small and medium-size manufacturers qualify for a daylong energy assessment conducted by one of the 26 universities that serve as Department of Energy Industrial Assessment Centers.
3. Start Fresh
A new building could incorporate all these features and more -- it would probably, for instance, generate much of its own energy, with solar panels and other technologies. It would be sited and designed to take maximum advantage of the sun to light the building but still minimize the heat buildup in summertime.
Because so much of the potential to save energy is embedded in planning rather than technology, green features add only 1 percent to 2 percent to the total cost of a new building, according to the U.S. Green Building Council. But they can save 30 percent to 50 percent on energy costs and 40 percent on water costs.
Incentives to Clean Up
The recent stimulus bills created and extended tax incentives for green initiatives. But the Feds aren't alone in attempting to green the economy. In some states, the combined incentives can defray 80 percent of the initial cost of installing rooftop solar panels.
Federal incentives: These include a 30 percent investment tax credit (or production tax credit, or grant) for renewable-energy systems, including micro wind turbines and solar and fuel cells. There's a tax deduction of up to $1.80 per square foot for buildings that meet a 50 percent energy savings target in HVAC, hot water, and interior lighting systems. In addition, there's accelerated depreciation for smart meters and grid equipment, as well as for renewable technologies. (For more information, go to energy.gov/additionaltaxbreaks.htm and energystar.gov/index.cfm?c=products.pr_tax_credits.)
State and local incentives: These vary widely by state and include tax credits, rebates, grants, and loans. Some programs are far more generous than their federal counterparts -- the solar credit in Arizona reaches $50,000 per company per year. For a list of offerings by state, see the Database of State Incentives for Renewables & Efficiency (dsireusa.org).
Utility incentives: There are rebates for installing renewable-energy and energy-efficient systems; low-interest loans and grants to finance energy efficiency and renewable projects; and production incentives that purchase renewable energy, particularly electricity from rooftop solar panels. Utilities offer incentives in 42 states. For a complete list, go to dsireusa.org.
Solar Rent to Own
Companies have been reluctant to invest thousands of dollars in renewable-energy systems such as solar panels -- and with good reason. It can take years to recoup the investment, even with incentives. And most companies aren't in the energy-production trade; such an endeavor can distract from the core mission.
In recent years, however, so-called solar-services companies have appeared, to help businesses take advantage of their roofs. With a solar-services company, the client bears no upfront cost and no responsibility for upkeep; the solar provider installs the panels and operates them for the life of the contract. The energy firm sells the electricity back to the customer, usually at a discount off utility rates. The California Solar Center (californiasolarcenter.org) publishes a guide for firms considering a solar-power purchase agreement.
The DOE's Office of Energy Efficiency and Renewable Energy (eere.doe.gov) provides guidance to businesses on industrial technologies.
The EPA's Energy Star site (energystar.gov) keeps a register of green service and product providers. Its Building Upgrade Manual is a thorough guide to retrofitting.
The U.S. Green Building Council has devised the leading standards for sustainable buildings and has accredited 101,000 design and construction professionals. Find one at usgbc.org.
The American Institute of Architects' Architect Finder (architectfinder.aia.org) allows you to search for members who practice sustainable building design.