For a growing number of EHS professionals, energy management has also been put on their plate. Companies now understand that energy efficiency is a great opportunity for cost savings and raising competitiveness. According to the US DOE, energy costs are one-third an average building’s total operating cost, and its largest controllable cost. But many building managers or companies are reluctant to hire full-time energy experts, and put the job of reducing energy costs on professionals not trained in the area. Maybe you! Here is a guide to smart steps used by others with proven success for managing and maximizing energy cost savings. For many of these specific steps, it is important to bring in focused, experienced energy professionals, but such costs are paid back and more.
- Understand your buildings’ functional, energy and cost baselines. Review electricity and fuel bills of at least the previous 2 years to get an idea of your historic usage and costs. Are there unique energy-using activities (i.e., production)? Do your buildings have unique billings (i.e., penalty for high short-term demand)? Review key energy contributors (boiler, AC units, roof, insulation, windows, lighting). How old are they? Are they functioning well? Have they been maintained per manufacturers’ suggested procedures? Put all of this in writing and you have developed a broad baseline understanding of your energy usage.
- Rate your buildings. Assess the energy usage and costs of your buildings and activities and benchmark them against similar buildings both internally and externally. Use USEPA Portfolio Manager (it’s free, simple, and has just been updated!) and databases from a growing number of municipalities that mandate data collection/reporting. Which buildings or activities within your portfolio (i.e., high fuel usage in an otherwise-normal building) use energy more than others?
- Perform focused energy audits. Because cost saving is so important, focus on the buildings or activities that appear to use the most energy and have the highest cost. Collect specific data about the buildings and activities (i.e., How many/what type of lights? Are there potential areas of heat loss in the building? How reliable are the boilers and AC units?). Using outside, experienced professionals to do this is ultimately cost effective.
- Develop and prioritize Energy Conservation Measures (ECMs). Based on the information collected above, the energy professional should determine at least preliminarily the areas with the greatest opportunities for energy efficiency upgrades and potential strategies (ECMs) to achieve this and save money. List these ECMs and estimate their approximate upfront costs, future savings, and other indirect effects good and bad (i.e., a new piece of equipment may disrupt operations for X weeks; installing LED lights will result in reduced maintenance, improving time allocation for Maintenance). Determine more detailed costs and savings, payback of initial investment, and long-term return on investment.
- Identify incentive programs and funding sources. More and more utilities and government agencies offer incentives to pay for some of the upfront costs of many types of energy upgrades. Some are in the form of direct payments after completion of the upgrade; some are low interest loans; some are tax deductions (IRS 179D) or credits. An experienced energy professional can determine which incentive programs are available and most likely to be applicable and the best ways to qualify. Reassess return on investment, payback, etc. Such incentives can move a lower priority project up to a higher one. Determine internally how ECMs can be paid for (perhaps a different department may benefit and will contribute to a certain project). Stagger ECMs so they are more manageable.
- Project implementation and management. Move forward on the approved ECMs in a planned way. Many entities begin by implementing lighting projects which tend to result in faster savings, resulting in confidence that the program is working and the use of this “house” money to invest in additional, longer-term ECMs. Make sure that the project is overseen and performed to technical expectations. While it is tempting to “cut corners” to save more, more often you will pay in many ways long-term for doing this. Another area to not skimp is training. Make sure the right staff is thoroughly trained to operate new equipment or procedures properly. It is continued maintenance and proper operation of the equipment that will save the company the most money going forward.
- Perform measurement and verification (M&V). Make sure that all appropriate parameters are measured and recorded to determine whether actual energy usage and savings met projected energy usage and savings. Why might some goals not have been met? Work with the supplier to ensure that all equipment works properly. Determine actual cost savings, payback, and ROI.
- Keep track. Make sure that equipment and systems continue to be operated properly and maintained via manufacturers’ recommendations. Continue to measure performance and gains – both energy usage and cost savings, as well as indirect savings (i.e., Maintenance, etc.). Do this for all projects together to determine total savings. Your company may also be interested in a greenhouse gas emissions inventory (“carbon footprint”) and Sustainability program. Show how these energy-saving projects contribute to a smaller carbon footprint.
Sticking to a proven, established procedure like this will heighten your chances of success: lowering energy usage and raising cost savings and make you look good. See attached checklist. Remember: Think and move forward without fear.
Here’s a checklist covering the above steps to help keep you on track.
- Understand your buildings’ functional, energy and cost baselines. Review old electricity and fuel bills and equipment, and develop a broad baseline understanding of your energy usage.
- Rate your buildings. Compare energy usage and costs against similar buildings, and determine which buildings or activities use energy more than others.
- Perform focused energy audits. Use experienced professionals to collect specific data about buildings and activities using the most energy.
- Develop and prioritize ECMs. Based on the audits, the energy professional should determine areas with the greatest opportunities for improvement energy-wise and strategies to achieve this and save money.
- Identify incentive programs. An experienced energy professional can determine which incentive programs are most likely to be applicable. Use this to reassess total ROI and cost savings.
- Project implementation, management. Move forward on the approved ECMs in an organized way. Make sure each project is well-managed and performed to technical expectations. Make sure proper staff is trained.
- Perform measurement and verification (M&V). Ensure all parameters are measured to determine actual energy usage and cost savings. Work with suppliers to ensure that all equipment works properly.
- Keep track. Make sure that equipment and systems continue to operate properly and maintained via manufacturers’ recommendations. Continue to measure performance.
Marc Karell is the owner of Climate Change & Environmental Services. CCES has the experts to assist your building or company to proceed through these 8 steps to establish a successful energy saving program and maximize your financial benefits. We can help you in all of the technical and organizational areas, such as energy audits, diverse and smart ECMs, and implementation and M&V of projects. We want you and your company to have real success and look good. Call us today at 914-584-6720 or email: karell@CCESworld.com.