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What Do Energy Loads Have to Do With Your Bottom Line?

Jul 5, 2017 10:01:30 AM

Energy load cost management

Energy costs are controllable expenses. Paying attention to the data can help you see opportunities that impact other areas of your business, such as productivity, absenteeism and presenteeism. Optimizing the energy efficiency can offer some control over building energy load costs, impacting your bottom line, whether you are an owner, operator or occupant. 

Borrowing a concept from Jones Lang LaSalle (JLL), a global commercial real estate and investment firm, there is a 3-30-300 model that suggests organizations generally spend about $3 per square foot per year for utilities, $30 for rent and common area maintenance, and $300 for payroll.

While 1% of your annual budget to utilities may not seem like much, saving between 30% and 50% on that figure across your portfolio frees up funds to invest in other projects and boost your bottom line. Add to that figure the maintenance and operational cost savings gained from more efficient building controls.

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Identify Energy Load Inefficiencies and Opportunities

Simple energy meters and submeters help you collect data on energy consumption and identify heavy energy loads at the circuit level. Smart meters, which are low-cost, software-based energy monitors, collect data about the energy loads of different pieces of equipment in your building. These data highlight opportunities to cut unnecessary energy loads, identify inefficient equipment and pare back energy use during peak demand hours, typically late in the afternoon and in the evening.

Many utilities have implemented time-of-use utility rates. You can save money by shifting portions of your energy use to partial-peak or off-peak hours. You may also be able to take advantage of demand-response, which is when the utility notifies you of peak demand periods and offers you a discount to reduce your energy load. The more homes and businesses that participate in demand-response, the fewer new power plants and less infrastructure utilities need to build.

Take Action, Monitor and Measure

Software-based monitoring, measurement and control solutions offer:

  • Real-time, wireless monitoring of your energy loads via any Internet connected device, including smartphones and tablets
  • Scheduling of and, in some cases, different operational modes of lighting and other energy intensive equipment
  • Alerts when energy usage exceeds predetermined levels
  • Optimization of energy intensive equipment, such as lighting and HVAC equipment

Real-time monitoring, scheduling, alerts and equipment optimization allow you to monitor building controls and energy load statuses remotely. Your operational costs will decline as you are able to identify equipment issues before they become problems that require expensive truck rolls and expert technician work.

This automated monitoring and building controls optimization also provides benefits that improve the entire environment of your building and the health of your people.

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Energy Savings, Green Buildings and Productivity Gains

Energy savings plus improved indoor air quality (IAQ) and indoor environment quality (IEQ) can significantly impact that big chunk of your budget that goes toward paying your people and retaining talent.

An increasing amount of studies are showing the positive correlations between green buildings and productivity gains, including two collaborative studies by researchers at Harvard, Syracuse and SUNY universities:

  1. Cognitive improvements: With 109 participants across 10 high performing buildings (i.e., buildings surpassing the American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) Standard 62.1–2010 ventilation requirement and with low total volatile organic compound concentrations) in five cities, this study found 26.4% higher cognitive test scores and 30% fewer sick-building symptoms in high-performing, green certified buildings.

  2. Productivity benefits: Studying office buildings in seven U.S. cities, representing different climate zones for three ventilation scenarios, the researchers estimated energy consumption and associated per building occupant costs. They also paired the previous research results on cognitive function and ventilation with labor statistics to estimate the economic benefit of increased productivity associated with increasing ventilation rates.

    They found that doubling the ventilation rate from the ASHRAE minimum cost less than $40 per person per year. Using energy-efficient ventilation systems, the cost drops to $1 to $10 per person. The productivity benefits from doubling the ventilation rate were estimated to be $6,500 or 8% per person per year, not accounting for other potential health benefits.
As a developer, REIT, owner or operator, you must recognize that tenants (especially high-value tenants) see these studies and are demanding green, smart building environments that can boost productivity, retain talent and aid the improvement of employees' health.

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