May 2016

It has taken longer than usual, but warmer weather is finally headed to the US Northeast and Midwest, and boilers to provide heat and comfort can be shut down for awhile. While it may be “out of mind”, this is exactly the time to perform upgrades to save you money in the next heating season. We have seen recently fuel prices rising (fuel oil and natural gas), so savings will be even greater next heating season.

Heating and hot water supply can account for over one-third of a building’s energy consumption, justifying the investment in improved efficiency. Heating costs can be cut by up to 30% by implementing simple measures such as insulation, maintenance, optimized on/off controls (improved modulation), and energy monitoring.

The simplest upgrade with a good payback is insulating or repairing the existing insulation on boilers, condensate tanks, pipes and valves in steam or hot water service. Putting your hand on such areas (very briefly) will illustrate the loss of heat which must be made up by combusting more fuel. Insulating such areas can save up to 10% of fuel consumption.

It is important to find a reliable company to review, test, and upgrade maintenance of your boilers. Not just go through the motions, but spend extra time inspecting boiler tubes, brickwork, fuel lines, etc. to determine whether they are operating optimally. Have combustion testing done to determine efficiency, O2, CO, and CO2 levels at both high and low loads, etc. Given that you have invested so much in capital costs for your boilers, it would be a shame to have you have to buy new units prematurely because warning signs have not been even observed, not to mention addressed. Quality summertime maintenance of boilers pays for itself in the long term.

If you have not installed this, you should consider installing monitors and software to determine whether all areas of your building are receiving adequate heat and feeding back either to adjust the rate of steam or hot water travel or the fuel feed rate. While the monitors and software may be initially expensive, the detailed determination of your heating success not only will save you energy costs, but also provides proof that you are providing adequate heat to all tenants.

CCES has the technical experts to help you identify potential upgrades for your boiler, domestic hot water, and other heating systems, and can manage upgrade or replacement projects for you to maximize the cost savings and other benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Energy conservation is on more and more people’s minds – particularly building owners and managers and corporate officers. Energy is a growing cost for any business and with recent discoveries in technology that saves energy use, more and more businesses are turning to energy savings to gain many diverse economic benefits.

Among the best ways to save energy is through lighting upgrades. Changing to more energy efficient lights is one of the best “low hanging fruits” for energy savings. But, it is critical that you do not just run to the hardware store and buy new lights labeled “energy efficient”. Changing to the wrong lights may save you some energy costs now, but actually cost your company much more money when it comes to worker productivity.

Work and, Therefore, Lighting Needs Have Changed

For example, in commercial spaces, the way that offices are operated has changed in recent years. Most offices used to be a collection of private rooms for each employee, based upon size (larger ones for senior management), with little common space and hallways. Now, more and more offices are “open” with one or a few large rooms for many employees. Fewer lights are needed because there are fewer walls and separations. Put another way, lighting for one person in one office can now adequately provide proper lighting for several people’s work spaces.

The nature of work has changed, too. Office work used to be based on reading or writing on paper. But now much more work is done on personal computers, tablets, and other devices. Less artificial light is needed because these devices give off light.

Too Much Lighting Is Not Good Either

Therefore, you do not need to provide your employees with as much light as you used to. De-lamping, the strategic removal of light fixtures, effectively reduces wattage and energy costs. If done right, it will not adversely affect, but will improve worker productivity. Excess light, studies show, is actually not a good thing, potentially causing headaches, fatigue, stress, and even disrupting circadian rhythms.

The Illumination Engineering Society (IES) used to recommend a lighting level of 750 to 1,000 lux (lumens per square meter) in offices. However, IES now recommends a lighting level for open offices of about half of this: 300 to 500 lux. While a manager may be tempted to keep lighting levels as they are “to be sure” that everyone has sufficient light, this may not be a good idea for the reasons mentioned above.

Another matter to consider is the use of natural light. While allowing sunlight to enter an office as a replacement for artificial lights (whether by switching off lights or with a daylight control) is an effective energy saver, it can cause glare and solar heat gain, affecting worker productivity and adding to your air conditioner’s load and raising energy costs that way. Installing “low-e” film on the windows that allow sunlight will reduce glare and solar heat gain, providing the office the natural light with less of the downside.

Reducing lighting is a positive way to reduce energy costs and be more sustainable. However, your company will benefit more by doing this coupled with the right lighting.

CCES has the experts to help your company evaluate your current lighting and determine whether there are opportunities to not only replace your current lights with more energy efficient ones, but to also install the “right” lighting to improve productivity. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Don’t think of energy reduction as a burden, but as a great financial investment. A robust program will effectively help your bottom line by reducing operating costs.
What is the other way to increase profits? Increase revenue. Fine, but how easy is that to achieve? Let’s say a building saves $100,000/year in operating costs through energy savings (not hard to imagine: less than $10,000/month). If your average “widget” results in a 10% profit, then you’ll have to increase sales by $1,000,000/year to get the same increase in profits as reducing energy. That means investing in more advertising, sales people, etc., and then there is no guarantee that you’ll reach that $1,000,000 annual increase in sales. It is more likely you will meet an energy savings goal than a sales goal. More important, even if you succeed in increasing sales accordingly, the next year you have to do it all over again. Keep the advertisements, salespeople, etc. going. How easy is that? But the energy conservation measures automatically keep saving you energy costs. In fact, savings will increase in future years as the unit cost of energy will only rise (will your utility keep the cost per kWh, per therm, etc. the same?). So the savings likely will be $103,000 in year 2, $107,000 in year 3, etc. for some time. But each future year, you have to invest and hope to get that million-dollar increase in sales.
Yes, think of energy savings as an investment to get the best return with your business’ hard-earned money. The basics of any financial investment is to get the highest return for the lowest risk. Energy efficiency achieves this as rates of return on many projects are conservatively in the teens percent per year, and often 25%, 30% or more per year. What bank or Wall St. investment pays this, with no risk (a light bulb is lower wattage, you will save; equipment is designed to use a certain amount of energy, etc.)?
Why is energy management such a good investment?
• Rate of return exceeds most financial investments (often >25%/year), with low risk. Technologies are well understood and perform well in “real life” conditions.
• Energy costs are a growing segment. Reducing these directly increases Net Operating Income for any business.
• These technologies last longer, meaning you need to have fewer in reserve, liberating space. Reliability is improved and maintenance costs are lower, freeing up O&M staff for other projects.
• Prices for these technologies are coming down as more get into the business. Plus, utilities and governments give incentives to pay part of the cost. But don’t wait for prices to come down further. Future capital cost savings will likely be lower than the lost opportunity to save energy costs in your buildings.
• The financial community knows energy efficiency projects have a high rate of return and are reliable. So they will compete to loan you upfront money for these projects. Financing can be arranged to produce a positive cash flow at all times.
Again, think of energy savings – if done right – as an opportunity to get a great financial return with little risk. CCES has the experts to help your company maximize the benefits of energy upgrades. We handle it all from assessment to planning to execution to benefit you the most. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Despite the new agreement from the Paris Climate Change Meeting, there seems to be growing momentum against being energy efficient. As I write this, crude oil is under $40 per barrel, and perhaps going lower as the new year begins. Lower prices of gasoline, diesel oil, etc. in the retail market are quite apparent.

Yet, energy from such sources, such as oil and natural gas, is in a finite supply. We will eventually run out. We cannot be wasteful. Plus, the scientists say there are limits of how much of carbon currently trapped in the ground can be put into our atmosphere without causing grave outcomes of rising sea levels, more extreme storms and droughts, etc. We need to not only transition to renewable (non-carbon) sources of energy, but also to use more efficiently the fossil fuel we still need to combust.

While Americans had moved toward a more energy efficient economy in their buying decisions, recent market conditions (cheaper fossil fuel prices) appear to be pushing us in the other direction. Recently, reports have come out about Americans purchasing fewer hybrid and other fuel-efficient cars and more larger, less fuel-efficient ones.

How can we overcome the reaction of Americans to short-term trends, such as cheaper gasoline prices, and focus instead on long-term needs? Certainly the concerns about and growing acceptance of Climate Change has not affected purchasing behavior long-term. Polls show a majority of Americans now believe Climate Change is real, but don’t think they can do anything about it. Perhaps an outright war in the Middle East may trigger a revival of concern for energy efficiency; let’s hope it does not come down to that! Perhaps a return to $4 per gallon gasoline will do so; but now in post-Recession America perhaps people can better tolerate such high prices and not change their ways. Besides, high gasoline prices will harm certain sectors.

I think the biggest obstacle to people and companies being more energy efficient is that there is no single “face”, no celebrity, no company or entity that is “talking the talk” very publicly backed up by “walking the walk.” Trying to make it both beneficial and “cool.” Energy efficiency is complex and not a single entity to be represented to the public. And there are no “trophies” or high-visible ones that are internationally accepted. It’s a lot easier to do nothing.

Although there have been many good, leading companies being out front on energy efficiency, the average CEO cares little about potentially losing many thousands or millions of dollars in inefficient processes or buildings. Maybe it’s education; today’s CEOs never learned about sustainability and limits to resources. Today’s Business School students are learning this. Or maybe CEOs perceive bigger battles to wage or think the gains (financial, publicity) are not worth it.

This directly impacts my business. Particularly in the last year or two I have had a number of people, companies, or municipalities approach me about helping them be more energy efficient or sustainable, and then not go forward with the project or just do the minimum and not go forward with the rewarding projects. Some “vetoer” stops the process, they cannot get funds, they change their minds, etc. Energy efficiency and sustainability are nice concepts in theory, but for many, there is little will to close the deal and really be serious about it.

I hope entities like these will change their mind in the future, and they probably will eventually, but I cannot go on as a business this way. I will be working for a larger energy consulting firm that uses greater resources to invest in convincing and serving buildings about being more energy efficient.

CCES is still around, and we can help you address technical issues involving environmental compliance issues affecting your company. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Have a wonderful Holiday season and a happy, healthy, prosperous 2016!

In my practice, the most difficult problem I face is the skepticism of property owners and managers when it comes to the savings potential of energy upgrades. I usually deal with fellow engineers and scientists who understand options, can assess benefits, and have confidence the technology will work. But the real estate community thinks differently, and, I’ve learned, greatly fears any perceived risk. Even if there is a tiny chance in their minds that a potential energy upgrade may fail, they will stick with the status quo.

Commercial energy efficiency upgrades, therefore, are low priority items. What factors hold the industry back from going forward on definitely beneficial, cost-saving projects?

As I mentioned above, building owners are skeptical that energy retrofits will deliver a strong return on investment in the field. Some worry that a new technology may work “in theory, but not in my building, with my tenants!” But in most cases it is simple math; a 9-watt LED replacing a 60-watt light will save in actuality the appropriate number of kWh.

Owners are also concerned that overworked staff cannot oversee equipment performance and determine whether an upgrade is really achieving optimum energy efficiency gains. Many building owners also believe that energy is a relatively small cost of their business compared to salaries, taxes, and infrastructure. And if you take proposed annual energy savings and divide that by 12 months and the number of tenants, energy cost savings may be small, in their eyes, relative to the rent collected.

It is even a cultural matter, as building staff tend to think it is OK to work longer hours to maintain older equipment until it practically breaks down, rather than upgrade early to save labor. Staff normally address day-to-day challenges rather than think long-term.

How can this be overcome? Some in the insurance industry now offer insurance to guarantee performance. For payment of a certain premium, a building owner will know that its building’s energy upgrades will meet a certain energy cost savings in the first year after being fully implemented. If the real cost savings is less than that guaranteed, then the insurance company will pay the difference. Thus, for a premium, this takes away any concern that a proposed upgrade will fail to meet its stated goals “on paper.”

A second issue is financing. Many real estate owners already borrow greatly just to afford the buildings they own, and may have trouble qualifying for further financing.

Property-assessed clean energy (PACE) and on-bill financing are existing options addressing financing. PACE loan repayment appears on one’s property tax assessment and, therefore, are considered a higher priority than a mortgage. On-bill financing programs allow repayment based on savings based on utility bills. Government incentives exist to allow institutions to issue financing at lower rates than conventional loans, particularly for small buildings or those owned by non-profits. Building owners can also take advantage of competition among financing firms, as the excellent return on investment of energy projects is well known and better assures a loan will be repaid.

Some energy service companies offer financing, such as a power purchase agreement (PPA). Real estate investment trusts (REITs) which own income-producing real estate can also provide energy-related financing.

Between lowered costs, low interest rate financing, existence of government incentives (which are likely to disappear), and improved technology there has truly never been a better time for a building owner or manager to invest in a smart energy upgrade. Believe it; it is real and will benefit you and your occupants greatly!

CCES has the experience to help your building upgrade your energy systems in a smart and reliable way, ensuring success and maximizing both cost reductions and other benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.