Electric rates have risen 79 percent in Kentucky since 2000, and with recent announcements that the federal Environmental Protection Agency will target power plants for carbon emission reductions, electricity rates may double over the next decade. Clearly, businesses have an on-going financial incentive to “go green,” whether that means earning an Energy Star label or LEED® certification, or just helping buildings operate more efficiently.
A well-designed building that uses energy resources effectively has a carbon footprint as much as 25 percent smaller than a building designed only to meet the minimum standards of the energy code.
For many building owners in today’s economic climate, investing in energy conservation measures may easily fit into your top five investment strategies. As utility rates increase and the cost of taking action decreases, pay-back periods can be very short. Like any other investment, you’ll need a plan.
Energy conservation plan
Start with the end in mind. It’s easy to assess the financial opportunity with a little bit of research. What is my current utility spend? Escalate that at 10 percent for five years and establish your near-future baseline spend. The range of savings is 15 percent to 30 percent.
Next, determine your desired return on investment (ROI) and establish an investment budget. This will allow you to make a determination for your ongoing initiative.
Find a partner. Achieving your lowest total cost of ownership will not be a one-time event, and your partner should truly work with you through the lifecycle of the building.
Leverage third-party benchmarks such as those of the U.S. Department of Energy and similar buildings in your peer group. A good partner will help bring these competencies.
Set clear objectives, measure results and celebrate milestones. Bringing visibility to the plan is essential for success, because conservation is both a technical and behavioral strategy.
Building a new energy-efficient facility
For new construction of small- to medium-sized buildings, there are few obstacles to energy efficiency. The initial investment may be 5 percent to 10 percent of project cost higher, but the return is fairly quick. For example, the additional costs to install a high-quality building automation system may have a payback of just three to five years. A variety of technologies should be considered, each with varying magnitudes of sophistication, savings and cost.
For example, here are several new construction energy conservation measures and their potential savings:
- Renewable energy technologies (such as geothermal systems) and thermal storage system – 25-35 percent
- Low temperature, low flow air/water systems that can reduce the size of ductwork, piping, fans and pumps – 20-30 percent
- Reducing air flow or water consumption with variable systems – 5-10 percent
- Employing light sensors – 5-10 percent
- Taking advantage of natural light – varies
- Installing point-of-use (instantaneous) water heaters – 10-15 percent
- Employing optimized temperature control systems – 30 percent
Reducing existing facility energy costs
Energy retrofits of existing buildings that require infrastructure-related upgrades − such as a new HVAC system, windows or a roof − typically will take longer to pay for themselves than additional investments made in a new construction project. The greatest energy savings for existing buildings are achieved through improvements to the operation of the HVAC, plumbing and lighting systems.
Among potential energy-conservation improvements and their potential savings are:
- Replacing / retrofitting the HVAC system – 15-25 percent
- Incorporating night / unoccupied control settings – 10-20 percent
- Installing demand-based ventilation air controls – 10-20 percent
- Replacing light fixtures with T8 or T5 technology – 5-20 percent
- Tuning up existing systems (proper lubrication, drive belts, refrigerant charge, water treatment and air and water balance) – 5-15 percent
- Utilizing low-flow plumbing – 10-20 percent
- Requesting a rate analysis from the utility provider – 5-10 percent
Whether building from the ground up or retrofitting an existing building, it is important to select an energy services partner that has the systems and applications knowledge to properly assess each energy conservation measure and its respective return on investment. Owners of existing buildings considering tapping into their capital budget or financing the cost of upgrades need a partner that can help them assess at what point retrofit costs outweigh the potential savings.
Ultimately, the key to reducing operating expenses with a successful long-term energy efficiency program is the day-to-day operation of the building. Maintenance programs and operational parameters of building systems are vitally important to building performance. Even buildings that incorporate the latest energy-efficient technologies will fall well short of their potential energy savings if not operated properly, and that’s where a qualified energy services partner can offer measurable value.