A Business Case for Investing in Energy Conservation
Energy conservation is an important topic for discussion on several fronts:
- It’s a political issue - climate change and regulations surrounding sustainability are headlining campaigns and debates across the country.
- It’s an emotional issue - fracking, among other practices, has instigated plenty of controversy and argument over the years.
- It’s a scientific issue - experts continue to debate the specifics, but nearly all agree that energy efficiency is vital.
And, of course, it’s a business issue. Regulations are often focused on commercial applications even more heavily than on residential or individual consumers. The business world is often expected to lead the way as new environmental and energy-related initiatives are launched.
Despite all the factors swirling around the energy debate, business leaders must primarily be concerned with the financial impact of these measures. While sustainability from an environmental standpoint is important, they also have an obligation to their employees and customers to consider economic sustainability.
These priorities are not, however, mutually exclusive. As outlined below, there’s a strong business case for investing in energy conservation, making it a win-win for companies with a long-term outlook.
The Facts Behind Energy Efficiency
Before considering conclusions, let’s take a brief look at the statistics regarding energy conservation by commercial entities. We’ll be focusing primarily on the energy usage specific to commercial HVAC.
According to statistics published by Pacific Gas and Electric, a utility company in California:
- Space cooling accounts for 15% of electricity costs in the average commercial building.
- Upwards of 30% of the energy that goes into commercial HVAC systems is lost to waste.
- Simply changing filters in the HVAC system can reduce energy waste by 5-10%.
- Programmable thermostats can produce savings of hundreds of dollars a year in a large facility.
- Arranging for routine maintenance on a commercial HVAC system can reduce repair costs by up 40% while improving overall energy efficiency.
- Properly sealing heating and cooling ducts can improve energy efficiency up to 20%.
- Upgrading or replacing ageing HVAC equipment can yield 5-20% gains in energy efficiency, especially if the equipment is more than 10 years old.
- A difference of one degree up in the summer and down in the winter can save up to 10% annually on heating and cooling costs.
- Up to 51% of a commercial building’s overall utility usage can be traced to heating, cooling, and ventilation.
These statistics can help any building owner or facility manager place a ballpark price tag on their building’s HVAC system in regards to energy conservation, efficiency and annual cost. If you’ve never considered it before, the figures are pretty staggering.
The benefits of investing in conservation efforts are especially high if your equipment is inefficient and you aren’t regularly maintaining upgrades, retrofit controls, or have a plan in place for rolling out energy efficient equipment.
How Conserving Energy Impacts Your Bottom Line
Of course, every facility involves a unique set of circumstances with its own challenges to overcome. However, in over 40 years serving the greater Chicago area, we’ve never yet come across a commercial facility that couldn’t benefit to some extent by investing in energy conservation and efficiency.
With potential savings of tens of thousands of dollars annually, nearly every logical upgrade or replacement a building needs will pay for itself in just a few years, at the most. Even very small, low-cost improvements can result in sizeable cost savings in buildings that are currently inefficient.
Keeping this equipment in top form through routine and planned maintenance extends the life of the equipment and keeps its energy efficiency rating as high as possible, further increasing the financial value of the investment.
Finally, an investment of energy-efficient HVAC systems has a very high value in less tangible areas such as public perception, customer loyalty, customer satisfaction, employee satisfaction, and employee productivity:
- Comfortable employees working in a facility with smooth-running, energy efficient heating and cooling are more productive and happier.
- Customers, business partners, vendors, and other commercial entities with an impact on your bottom line are also human beings with a connection to the larger issue of environmental impact and sustainability.
So, both in direct financial savings and indirect sentimental value, you can easily build a strong business case for investing in energy efficiency.
Contact us today to arrange an assessment of your facility’s current energy efficiency and discuss options for improving your systems. Download our case study to learn more.