I was looking at some old articles and found one about energy efficiency from 2014. The principles are still true – even more true than then – given we are getting out of the pandemic and businesses want to return to normal. For many businesses, revenues may not return to pre-pandemic levels for some time. Therefore, a critical way to continue to survive is to reduce expenses. Energy costs are sometimes thought of as uncontrollable. One gets one’s utility bill and pay it and that’s it. No, energy is quite controllable and, if done smartly, can result in major savings in operating costs, while making staff and customers comfortable.
Why is doing something about energy efficiency a great financial investment?
1. $$$$ or, in other words, the return. If done right, an energy efficiency project often leads to returns of 20%, 30% or more per year. The reduction of your payments of energy bills is just like having more revenue. Investing money upfront to get such savings – year after year after year, from one such project – is worth it.
2. Others will pay for it. Reducing energy use is not just good for your company, but also for other entities, such as utilities who need to delay major infrastructure projects by reducing peak demand and cities and states who wish to make certain carbon goals. So very healthy incentive programs and tax breaks exist for qualifying energy efficiency projects. Just one example is the re- and permanent- authorization of Part 179D of the federal tax code which provides tax incentives to those who actually implement energy efficiency projects. Now, incentives will not pay the full cost of a project, but can subsidize a significant portion. What other program that you have to do is subsidized by others in such a way?
3. Lack of risk. Energy efficiency projects, using upgraded technologies are not risky. They are warrantied and guaranteed to work and meet certain criteria. The manufacturer takes the risk. And there is reliability. If you replace a 60-watt light bulb with a 30 watt bulb, you are saving 30 watts or 50% – period! There is no variability that the light won’t work or not be 30 watts. Your projects will work.
4. Borrow the money needed. Given what’s written above – the high return, the support by utilities and government, and the low risk – and the current historic low interest rates, you can get the energy efficiency upgrade and not pay a cent upfront. There are institutions that only give loans for energy efficiency projects. And even for those bigger lenders, they love to lend funds for projects with known high returns and low risk; so lenders will fight to lend for projects like this – to your benefit, in terms of lower interest rates.
5. Greater reliability, reduced maintenance. In general, upgraded products and technologies make your whole system more reliable which means fewer disruptions to tenants or customers, which is better for business. And these products almost always result in reduced maintenance. One example is LED lights replacing fluorescent lights. Fluorescent tube lights often burn out and have to be replaced every couple of years. LED equivalents are warrantied for 7 or more years, meaning less work for your Maintenance staff to stop important projects to replace bulbs elsewhere, pleasing tenants. And that also means fewer trips up and down your ladders, reducing falls and related risks.
6. Positive cash flow. Unlike some projects where one must wait around before beginning to get the financial benefits, energy efficiency projects begin to benefit the bottom line right when it is installed and “turned on.” Quite literally during the first utility bill, ones sees cost reduction and financial benefits.
With all of these reasons and given the fact that many businesses will have a slow go to return to pre-pandemic revenue, reducing costs is critical and doing so in energy with smart energy efficiency projects is so reliable and beneficial.
CCES has the technical experts to allow you to plan and implement a smart and effective energy efficiency project to maximize the cost benefits for your business with the least disruption. Contact us today at karell@CCESworld.com or at 914-584-6720.