It is estimated that by waiting one year to complete your energy efficiency project, the project cost will increase by about 3% and energy prices will also increase by about 3%. For a $10,000 energy efficiency project, the value of completing the project immediately would be about twice as much than if the project were postponed just one year. This specific example would have been worth about $6,300 in positive cash flow after 4 years if it were completed immediately, but only worth about $3,000 if it were postponed a year!
Not only does the cost of waiting directly impact your energy bills as well as the value of your project, it also has negative effects on other aspects of your business that could have been improved with those extra savings. By not capitalizing on the opportunity to free up dollars in your budget, other areas of your business that could have used those dollars also suffer.
Not only must you be proactive about completing your project, but you must also be diligent about completing the bundle of conservation measures which offer a good balance of savings and payback period. By focusing on these grouped measures, you can improve the efficiency of your entire building. It’s important to not be dissuaded from some measures with longer payback periods. Often times if these measures are ignored, large percentages of possible savings can be lost. However, these high price tags can be mitigated by bundling long payback measures with quick payback measures to create a complete project.
Throughout the audits completed by the COSE Energy Program, nearly 60% of all suggested energy conservation measures were lighting improvements or operational adjustments. Operational, or behavioral, conservation measures includes changes such as adjusting the set point temperatures for heating and cooling, more closely monitoring electricity usage by using power strips or unplugging equipment that is not in use, and other measures similar in nature. These changes may provide around 10-20% of your possible energy savings, but these dollars are pure savings as they require no investment. The most common conservation measures for lighting were to replace older, less efficient fixtures with LED fixtures, which can be 10 times more efficient! The payback periods for these types of measures are very short, sometimes even instant.
These lighting and operational changes also provide positive cash flow from energy savings. You could simply complete these low hanging fruit measures of your project, but what about your vintage HVAC system that needs an overhaul? Or the insulation that could be added to reduce energy costs?
By only completing the low hanging fruit which could be around 60% of your energy project, you are ignoring the other 40% of the measures that you could complete to save the most energy! By not completing this other 40% of measures, you could be missing out on nearly the same amount of your possible energy savings!
By completing your lighting and operational upgrades, you can use these savings to fund your HVAC or insulation improvements. By taking the long term approach to your project, you’ll prevent your business from leaving any energy savings potential on the table! This means more dollars being shifted from your energy costs to other aspects of your business, such as marketing or employee compensation, especially when employees contribute to and enhance the energy savings!
In order to achieve the greatest savings potential for your business’ energy portfolio, you must focus on the project as a whole, as well as be swift in your completion. By either not completing the whole project or only doing it in phases over a long period of time, or delaying in your completion all together, you are leaving large percentages of possible energy savings on the table!