Companies who want to improve their bottom lines often look to cut labor costs, increase sales or improve buying power with their vendors. Many companies don’t realize they can increase their net bottom line by creating energy efficiency within their buildings and plants. These increases in energy efficiency can create large long term cash flows. In the past many of the technologies we have today did not exist. Also the finance mechanisms we had did not exist. With new fiance and technology available it makes more sense than ever to create a energy efficiency plan. Many of the low hanging fruit in energy efficiency include lighting, day lighting, roofing, insulation, window upgrades and more. Some of the returns that you may see are anywhere from 1 – 10 years with a 5 – 20 year life span on the improvement. This means you have positive cash flow from 10 – 19 years of your efficiency project. Some of the new finance methods include on bill financing and PACE. These finance programs many times include an up front audit which insures you will get the energy savings you are supposed to. These finance methods often have interest rates from 0% – 6% over the life of the improvement. The energy improvement you implement is paid for by the savings. In addition to improving your overall bottom line you are also reducing your overall energy footprint which ultimately is good for the environment.
When considering energy efficiency one of the best ways to increase your return on investment is to bundle projects. When considering potential energy efficiency upgrades for your existing buildings they need to be reviewed as a whole. An in depth review should be done of all building components. If you upgrade one system without considering the other you may be overcompensating. For instance one of the most common ESCO upgrades is HVAC. Typically if your building is more than 5 – 8 years old your HVAC system is 10% to 80% inefficient so it makes sense to upgrade it right?
Yes and no, if you upgrade a HVAC system without looking at the roofing, insulation, daylighting, lighting and windows you could be over sizing the HVAC. If you increase the efficiency of a HVAC system then change your roof system later to an energy efficient one then change the lights to more efficient ones then your HVAC system will be over sized. If you building analysis included reviewing all systems benefits of some upgrades could offset or allow down sizing of other upgrades.
For instance, if your building is 15 – 20 years old it was built long before many of the current energy codes. Your building may have single glazed windows, out dated HVAC, poor roof systems, inefficient insulation and poor lighting. In this case if you did the following upgrades you would have the following benefits:
Window Film Installation or Window Upgrades = Reduced energy load, reduced heat loss / heat gain, increased building comfort, increased productivity
New Light Bulbs or New Light Fixtures = Reduced energy load, reduced heat load, increased light, increased productivity
New Insulation and Roof System = Reduced energy load, reduced heat loss / heat gain, increased building comfort, increased productivity
New HVAC System = Reduced energy load, increased monitoring capability, increased building comfort, increased productivity
As you can see the above example shows reduced energy load with each technology and in the end allows installation of a smaller HVAC system which increases the overall return on investment of the whole project. This is just a broad overview of some of the energy upgrades typical today. Most upgrades pay for themselves in a short period of time and typically if planned correctly are capital projects that need to be done anyway. Energy efficiency is the right thing to do when planned correctly. When was the last time you got paid over and over to do the right thing?
Deep retrofit link by Rocky Mountain Institute