Energy Efficiency: Why Small Businesses Are the Next Frontier
Small businesses are the driver of the economy, it is said, because they are collectively the largest employer in the US.
But they also pay much higher energy costs than large companies – up to 70% more according to the government. This overpayment on energy multiplied by the sheer number of small businesses across the country means that encouraging these firms to be more energy efficient is a key strategy to lowering energy consumption and green house gas production in the US.
Small business and facility owners have many priorities, so when it comes time to consider automating their energy usage, they look at the cost and the amount of disruption to install a system and they balk. They don’t get lower energy usage and they don’t get the data that could prove the ROI on other green investments.
In addition to the cost factor, the fact is that most business owners don’t understand their energy usage. The bill is sent straight to the account payables team and the information is not shared with the people who are in a position to reduce the costs.
Even if that information does get into the hands of the operations team or owner, it’s not granular enough or comes so late that correlating it with operations is too time consuming.
All of this is why smaller facilities waste more energy. According to the EIA, a 5,000-square-foot facility uses 70% more energy per square foot than a 25,000-square-foot facility. Some 30% of that cost is wasted energy, according to Energy Star.
Cloud and Wireless Simplify Energy Management
Energy Management Systems (EMS) are growing in popularity worldwide and according to recent industry estimates, the market for EMS is expected to grow to $38.5 billion in 2018. Historically, these systems have been aimed at large facilities and involved installation of sensors, new cabling, new computer servers and extensive personnel training. The cost and complexity meant that small businesses wouldn’t see a reasonable ROI with this type of a system.
However, by tapping into cloud computing services and wireless sensor technologies new systems are coming to market that make it easier and less costly to implement EMS systems in smaller businesses.
By leveraging cloud-based computing resources, today’s EMSs require no new servers onsite and all reports can be accessed remotely via a mobile computer or device.
With cloud-based EMS, business owners can manage a facility’s systems from anywhere. Also emerging are monitoring services with trained personnel monitoring the system and reporting key metrics.
Understanding Energy Usage
Understanding how much electricity a business uses and where is another important step in reducing the cost. An EMS can monitor each critical branch load so the energy usage of the equipment on that branch can be isolated. For most restaurants and retail stores, for instance, HVAC is the number one energy consumer. Lighting is a close number two – especially when outside lighting is involved.
Next, the EMS can allow business owners to make changes in these systems based on the usage. HVAC usage is a function of many variables, but temperature control is the big one. An EMS can provide secure control of the temperatures in all of the zones of a business so managers can set comfort levels for customers and employees separately, and avoid unauthorized changes.
Lighting control is also important for cutting costs, but also for meeting some of the new laws that are emerging across the country restricting outdoor lighting during certain hours.
Other advantages include eliminating the need to train local site managers on how to control heating or lighting. There’s also the availability of real-time energy usage reports and updates. This allows you to experiment with various energy usage strategies and see the impact in real time.
EMS in Action
A great illustration of the benefits of an EMS comes from a 154-location nationwide restaurant chain that adopted an EMS for all of its units. Even though it is a big company, each of its stores operate like a small business. Companywide, its electricity costs before the switch were $4.1 million per year, which they were able to cut to $3.3 million with the system was in place.
That savings continues on year after year. Other companies have reported up to 25% initial savings in energy costs – with no adverse impact on customer comfort.
Imagine the Impact
If we extrapolate the average savings of 25% across the 1.3 million service businesses and 600,000 restaurants in the U.S. and expected only 10% of them to add an EMS, the aggregate energy cost savings would be $400 million. And the impact on the environment in terms of reduced CO2 and reduced fossil fuel consumption would be similarly dramatic.
Small businesses are the backbone of job growth and economic vitality but too often they pay higher electricity bills per square foot than bigger companies. It’s about time to change that by empowering them with new technologies that can make them the next frontier in energy efficiency.
Greg Fasullo is co-founder and CEO of EnTouch Controls. EnTouch makes energy management systems for small facilities and businesses.
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