In real estate circles, energy efficiency often gets short shrift. Conventional thinking gives costs a 100/10/1 relationship. For every $100 a company spends on employees (salaries, health benefits, etc.), it “should” spend $10 on rent and operating expenses, and $1 on utilities (not just energy, but water, too). So, what would motivate a company to be more energy efficient and save only a fraction of the $1, when it can profit more by even a small gain in worker productivity; better return on the $100 spent on workers?

An owner recently published an article that estimated the costs of a building in their city as $300/sf for human resources, $30/sf for rent and O&M, and $3/sf for energy. They were initially pleased when upgrading lights and controls reduced energy costs by about 20%. However, that only saved about $0.60/sf out of $333, nothing to get excited about.

However, it turned out that the new lights were much longer lasting than the old ones, reducing operating costs (time/effort to regularly replace burned out lights) by 10%, savings of $3/sf. The new lights were designed to be of the right color temperature and location to coordinate with specific needs and reduced glare, reducing employee absenteeism and improving productivity. How much can well-designed lights save? It is hard to be accurate. But if new lights reduces absenteeism by only 1%, that’s 20 more hours work annually per employee. What if the lights also improve productivity by 1%? That’s equivalent of each worker being productive 20 more hours per year without having to pay more salary. Fewer coffee and other breaks can easily save this amount. A 1% reduction in absenteeism and 1% gain in productivity is a savings of $6/sf. There’s a good chance that savings would be more than 1% per person. The lighting upgrade, perceived to save the firm only $0.60/sf, has really saved it at least 16 times more.

Therefore, don’t look at an energy upgrade as only saving money on utility bills. Look at it as saving operating costs and making employees healthier and more productive. Leverage the value of energy upgrades to get CFOs and CEOs interested in energy!

CCES has the technical experts to help you get the greatest benefits from an energy upgrade, including O&M savings and productivity improvements, not to mention save much on your energy bills and get incentives to have others pay for them! See how we can make $ for you. Contact us today at 914-584-6720 or at karell@CCESworld.com.