How to Think about Energy Efficiency

I recently gave a talk to an engineering society about sustainability, with the emphasis on energy conservation and greenhouse gas emission reductions. I discussed “The 9 Purely Business Reasons to Reduce Energy” (see www.ccesworld.com/blog) to demonstrate the many purely common sense, financial reasons for companies to invest in energy efficiency. Gosh, give credit to us engineers. A few people in the audience questioned the viability of these reasons and were critical. Although I emphasized the business value of reducing energy usage, these people were quick to point out that improving energy efficiency was no guarantee of cost savings; a strategy may be so expensive or not feasible such that it will not pay back the initial investment. This is true, and that’s why one needs an energy professional to look at each individual building and situation to determine robust strategies. Some will have a better ROI than others. And that’s a good reminder that “just going to Home Depot” to pick up some LEDs, does not guarantee savings (or proper lighting). We experienced engineers are needed.

My favorite example is a small business called Colonial Needle, a light industrial/warehouse/office two-building complex in White Plains, New York. The buildings were built in the 1950s and underwent essentially no changes since then, including utilizing their original windows and boiler. Their energy costs were sky high, yet their workers were uncomfortable; some had to wear parkas at their desks in the winter! Colonial Needle realized they had to upgrade and did so comprehensively. While we determined that a window upgrade to double pane did not have a fast payback, it was still critical for worker productivity and morale for wind not to blow onto people at their desks! Each building and situation is unique. It is important to bring in the right energy professional to lay out options and to look deeper into what the long-term costs and benefits are.

Another factor is to take advantage of incentives that exist for many energy efficiency projects. Governments — even in red states — are beginning to understand that incentives for private companies to implement energy efficiency projects is a productive way for a government to spend money for the following reasons:

• Improved energy efficiency and reducing a company’s expenses represents a boost for tax revenue and for creating new jobs, beneficial to any government.
• Using less energy also has health benefits. Less fuel combusted means reduced air pollution buildup and, therefore, reduced asthma and other respiratory diseases and a happier and healthier population, using less government services.
• Reduced energy usage reduces the stress on the local area. One apartment complex that switched from oil to natural gas (oil backup) noted that the number of oil truck deliveries dropped from nearly 300 per year to two, through the narrow streets of the neighborhood. Besides causing traffic jams, truck deliveries took workers away from their tasks. That boiler house was also across the street from an elementary school, so this benefitted the health of the children, too.
• Reducing electricity usage allows utilities to avoid or scale back the building of new power plants, transmission lines and other necessary equipment and to use existing infrastructure more effectively. This not only saves the utility much money and risk of potential failure, but also saves the consumers, too, as we all ultimately pay this bill, and government agencies who must oversee the changes.

This last point is a major reason why more and more utilities offer incentives to customers to use less energy. Yes, that sounds ironic — paying a bonus to customers to use less of the product they sell. But such incentives make sound sense given the alternative, multi-million or multi-billion dollar capital upgrade projects, which may or may not be fully funded and may or may not lead to unbridled success.

But back to you, the readers, who may work for companies and building owners and deal with just one building and facility. How should you look at energy efficiency? Not as another project with paperwork and meetings, but as an investment with many benefits.

• The payback period for energy efficiency fell by over half when productivity and operational gains are estimated and brought into the calculations.
• Energy efficiency strategies can make buildings more comfortable, yielding healthier conditions for workers and residents. According to the International Energy Agency (IEA), for every $1 invested, energy efficiency provides up to $4 in benefits when the cost of medical care, lost work time and child care costs are considered.
• Energy efficiency strategies can attract new business, tourists and investment dollars to the company or building. This is especially true in real estate, as energy efficiency can attract more potential renters (giving the owner the upper hand), the entertainment and health care industries, and for universities.

Companies, building owners and managers, governments, utilities, and yes, even engineers should stop thinking about energy efficiency as just another expense, and instead think of it as an investment to be studied and benefits maximized. No, not every energy efficiency project will pay back well. An experienced professional is needed to determine the most cost-effective projects. But so many opportunities in energy efficiency exist (growth in better systems/technology) to benefit nearly any company.

Marc Karell is owner of Climate Change & Environmental Services. CCES has the experts to help you qualify for all applicable energy incentives on the federal, state, and local levels so you can gain the maximum financial benefits from your energy upgrades. Contact us today at 914-584-6720 or karell@CCESworld.com.