Nov. 2, 2010

Assessment of the energy usage of your operations and implementation of measures to improve their efficiency have so many advantages – from a business point of view – to any company. Of course, the biggest business advantage is cost savings. An energy efficiency assessment and implementing “low hanging fruit” is just about guaranteed to reduce your electricity and fuel usage. And given the growing unit cost of utilities, this will save you much money.

Business leaders recognize its importance. Say, such a program saves your company $1 million/year in energy costs. This may appear to be trivial for many companies, and is often not cited in the Wall St. Journal or annual reports. But the $1 million is going right to the bottom line, raising profits or reducing losses. To earn the equivalent in sales (which is more lauded in reports), one would need to sell $10 million per year of product at typical 10% profit to earn the equivalent bottom line gain of an energy efficiency program. Which strategy costs more? It differs from company to company, but the annual $1 million in savings is an achieved success, while one must spend some to raise sales (sales people, ads, administration, etc.), yet one may not achieve the $10 million/year increase. Also, cost savings from the energy assessment program continues every year; in fact, savings increases every year as unit energy costs are likely to rise. Meanwhile, efforts to maintain higher sales must be repeated annually.

The best way to implement an effective energy assessment program is to bring in a professional, collect usage and operation data, and work on the results. But it is understood that for many in these tough times it is hard to devote such resources for such an effort and get your personnel on board to gather and analyze the proper data, everyone already being stretched out. An alternative means is to implement some “easy” energy-saving ideas that take little effort and can show some energy conservation and cost savings. Here are a few tips:

• Purchase Energy Star-rated products. Work with Purchasing to use energy savings as a criteria for purchases of equipment, such as refrigerators, PCs, printers, etc. Energy Star products are more energy efficient than other models and the modest increase in purchased cost is more quickly offset by electricity savings than any other program.

• Improve your lighting. It is well known that replacing incandescent bulbs with LEDs or CFLs can save you 75% or more, not to mention the quieter cost of labor to change incandescents more often. But while at it, assess how much lighting is needed in some areas. Are some areas being overlit for its needs? If so, replace ballast or re-electrify for fewer or less intense lights.

• Paint your roofs white. This is a favorite of Secretary of Energy Chu. A white or light colored roof will prevent a heat island which seriously can damage roofs and cause air conditioning demand to rise, saving energy and repair costs.

Of course, it is best in any situation to work with an experienced professional to get the most long-term economic gain.

Environmental News for YouTM July 2010

It goes without saying that when developing “green” strategies for a company the first thing that’s asked is “So, what’s this going to cost us?” The assumption is that green strategies – to save energy, to reduce GHG emissions, to reduce water use and waste generation – will always come at a premium, with greater upfront costs compared to traditional (non-green) approaches. While most people and companies understand that green strategies ultimately save money in the long term (reduced energy and water costs, carbon credits), many of these ROIs are out a few years. Our culture has changed to ignore even prudent investments in long term gains as pressure mounts for short ROIs. For example, several senior staffers at municipalities have told me that no project would ever be approved in their municipalities if the payback is realized after the current term of the mayor! And, of course, there is pressure from company boards, shareholders, and others for quick paybacks!

Fortunately, as research and experience grows and green strategies are implemented, the upfront costs of more and more green strategies are declining compared to conventional alternatives. And now in the area of buildings, some green building strategies have now been established to be less expensive upfront than the conventional alternative, while still providing the longer term benefits.

Of course, potential cost savings will depend on a number of variables for each individual project. Bob Faulhaber, “The Green Civil Engineer”, has written about some recent case studies that he is involved in showing that the upfront costs of “green” alternatives can be cheaper than conventional approaches. Here are a few examples. Remember, these may not apply exactly for every situation.

Bob developed a cost estimate comparison for a commercial stormwater management project: a parking lot with distributed rain gardens vs. traditional catch basins and a detention pond. Approximate costs and assumptions were made. The cost of rain gardens for the parking lot is cheaper than traditional lot drainage.

One more example also involves parking lots – pervious surface vs traditional. The data for this cost comparison is drawn from a small parking lot project. The options included underground detention in the form of pipe or chambers or using pervious pavement and stone base for storage. The proposed parking lot built with pervious pavement and underground water storage was significantly less expensive than an impervious parking lot with traditional rain drainage.

The key is the big picture – verify systemwide costs, not focus on individual project portions.

There is also growing evidence that companies that commit to “going green” receive business benefits beyond the traditional ones of reduction in energy costs and reputational enhancement. D&W Inc., a company that supplies glass and mirrors, recently published the story of their green program. This is their words, but they have evidence that their program not only directly saved them money, but also reduced their regulatory profile and increased operational efficiencies. For example, based on some process changes to improve efficiency and reductions in the VOC content of their coatings, they were able to transition to a lower air permit level, reducing annual regulatory costs, red tape, and need for costly audits. In addition, the program simplified operations to enable easier cleanup at the end of the day, saving them labor costs and improving product quality.

Get more useful information in our blog: www.CCESworld.com/blog
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This Environmental News for You is meant to provide general ideas on how to implement effective “green” program strategies. You should evaluate these thoroughly before implementing. CCES experts have the experience to assist you in helping to organize, strategize, and implement a “green” program and properly evaluate potential strategies for their economic and environmental benefits.