Building owners and managers are seeing more and more evidence of the growing costs of energy and realize these costs must be managed and lowered. But how does one most effectively do this? Does one evaluate the current systems that use energy (HVAC for comfort, lights for lighting, plug load) and make smart upgrades to improve its efficiency (do the same or more using less electricity or gas/oil)? Or does one invest and implement renewable energy to bypass the local utility and take advantage of the free resource generating energy (solar, wind, geothermal)?

Certainly being more energy efficient is a good thing financially for your building. It is in your interest to operate your equipment – for which you paid a lot of money – properly and efficiently; you want to get your money’s worth. If a system (an area of lights, a rooftop unit, a boiler, some PCs) is wasting energy day after day, it is in your interest to replace or upgrade it with equipment that works as well, but uses less energy. On the other hand, renewable energy is all the “rage”, with prices declining. There is certainly security; we know, if designed right, solar, wind, etc. work reliably. Being less dependent on your local utility is a good thing. Which one should a smart building owner/manager lean toward?

Well, it is best to optimize both strategies, but in a particular order. It is tempting to install solar panels or a wind turbine right away. It’s a great “show” piece for stakeholders, incentives are available in many places, and prices are coming down. But it is best to emphasize energy efficiency first. Have a thorough energy audit performed by an experienced, certified (P.E., CEM, or CEA) professional. That auditor will undoubtedly identify multiple smart strategies to save energy, with numbers demonstrating that each potential strategy will pay back the initial costs for the strategy in a reasonable amount of time, taking into account local incentives. Do not take the numbers literally. For example, if a payback of a certain strategy is listed as 3.2 years, it may end up being a little shorter or longer because factors involved in the audit and calculations are changeable. However, in a well-performed audit, the real payback is usually close to the predicted. Seriously consider and implement one or more listed strategies in the audit report that your company is comfortable addressing. Measure and note the decline in electricity or gas/oil usage. Remember that most energy efficiency projects have other benefits that renewable energy does not confer, such as improved productivity and reduced O&M costs and efforts. So you are getting these confirmed financial advantages relatively early.

Now that energy usage has been reduced and efficiency improved, you can consider alternative sources of energy. Solar panels and wind turbines are improving in effectiveness and reducing in price in time, so a slight delay in their procurement is probably in your favor. But more important, with energy usage minimized, now you can design the proper sized and placed system, reducing the upfront costs. If you bring down your electricity usage, say 20% because of improved efficiency (better lights, plug load, improved weatherization, upgraded HVAC), that could reduce the number of solar panels or wind turbines needed to reach your goals, reducing the capital costs you would need to get from Financial or any type of loan you may take out. And this will reduce the labor needed to install the equipment and leave you room on your roof or property for other things.

Sources estimate that currently energy efficiency typically costs one-third to half the full cost of rooftop solar. Therefore, it makes sense to prioritize efficiency before sizing a rooftop system, reducing the number of panels needed. For example, if a 40 kW commercial solar system can be reduced to 30 KW because of reduced need for power (improved efficiency), then the upfront cost for the panels can be reduced by $15,000 or more, a financial incentive to optimize energy efficiency first. It would not be good to install a large system and then after implementing energy efficiency projects find out that such a large system was not needed after all for the long-term future. Obviously, the exact numbers may vary based on efficiency and renewable energy incentives available.

CCES has the experts to perform a thorough and useful energy audit of any building type, providing normally multiple smart strategies to reduce energy usage effectively and at a reasonable payback. We can project manage the strategies you select to ensure that you get the maximum benefits (on top of utility cost savings) of the selected upgrade. And then we can help you decide on which renewable energy source is right for your building and work with established vendors to ensure that a good system is installed, providing you with maximum benefits and is smooth to operate. Contact us today at karell@CCESworld.com or at 914-584-6820.