Investment vs. Immediacy

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While business owners know that investing in a capital improvement or retrofit to their commercial property can save an average of 20 percent on utilities costs per year, it can be tough to pony up the initial outlay. In a market contraction, building owners are reluctant to pencil a payback for future savings you can’t immediately see.

What we can see is the need to reduce energy consumption by commercial properties. In late March, the Cleantech Group released a study concluding that office buildings alone consume 40 percent of the electricity produced in the U.S.

Part of the perceived problem is that efficiency equals expense. But the real problem is that property executives don’t have enough access to mechanical and facilities engineers who can help them achieve immediate savings resulting from low- and no-cost adjustments to building operations.

The first step toward energy efficiency is to know where your building stands using energy benchmarking. Using the Environmental Protection Agency’s Energy Star system, energy benchmarking determines the savings potential of your building based on a comparison to other buildings of its size, electricity usage, and comparable climate. Utility bill information is collected, and the building’s total energy spend is calculated. The building is assigned a rating from 1 to 100 reflecting the building’s performance compared to its peer buildings.

For example, an Energy Star score of 40 means that the building performs better than 40 percent of its peer buildings, while 60 percent of its peer buildings perform better than it does.

Benchmarking helps draw broad conclusions about energy-saving potential, but energy assessments are the next step in realizing bottom-line cost savings. In many cases, significant savings can be realized by relatively simple adjustments to the building’s lighting, heating, ventilation and cooling systems.

A quality energy assessment will provide recommendations for what adjustments can yield the most savings. BOMA has published a list of such measures and, my company AirAdvice has developed an HVAC-specific version. Opportunities to cut operating costs often include:

• • Avoid over-ventilation.
• • Adjust the temperature set-point minimally.
• • Revise the lighting schedule to better match tenants’ schedule.
• • Manage manual override systems to keep building controls consistent.

Once you know what adjustments to make, there’s a low-cost — if any cost — threshold to start realizing savings.

Evaluation of larger projects is more complicated. When is a good time to make a major energy efficiency investment and what can you expect in terms of payback?

Do the math — or have it done for you by your energy diagnostic provider. Weigh the cost of the retrofit against an accurate projection of annual energy savings after implementation. Then, factor in rebates and incentives from the Energy Trust of Oregon and Portland General Electric. Depending on the project, many commercial retrofit project paybacks have shrunk from around 10 years to just three or four. On April 1, the Energy Trust of Oregon increased incentives for heating and cooling systems from 20 cents to 25 cents per annual kilowatt hour saved, for up to 50 percent of the cost of the project.

Remember that taking advantage of incentives requires paperwork, and you still have to invest up front. But, if you’re proactive about when and how you upgrade major building systems, you won’t be backed into an expensive corner when they break.

Before you make major investments, make sure you’re taking advantage of the energy savings already available to you by getting energy benchmark and assessment reports on your building. Short-term savings can help bring a larger investment into reach.

Kevin Skurski leads AirAdvice’s corporate and channel marketing programs. AirAdvice, a leader in diagnostic technology, is the developer of the BuildingAdvice program, focused on reducing operating costs in commercial buildings.