Michael Cummings

Understanding Energy Performance Contracting

Understanding Energy Performance Contracting

An investment in sustainability can take many shapes, but one unavoidable fact about today’s high-performance technologies is that they usually cost money to implementand most of the time, it’s all up front. But if you’ve been ruling out a sustainable solution for purely financial reasons, we’d like to introduce you to a concept you really ought to know about: Energy Performance Contracting.

It might just change your mind about sustainability. And it might just save you a whole lot of money, too.

Energy Performance Contracting, to borrow the Energy.gov’s phrasing, is a “budget-neutral” method for reducing energy and water consumption while increasing efficiency in your building. In other words, Energy Performance Contracting helps your building use less energy while creating zero negative effects on your bottom line.Understanding Energy Performance Contracting

“Normally offered by Energy Service Companies (ESCOs), this innovative financing technique allows building users to achieve energy savings without up front capital expenses,” notes HUD.gov. “The costs of the energy improvements are borne by the performance contractor and paid back out of the energy savings.”

You get the benefits, while somebody else shoulders the financial burden. Not bad, huh?

“Energy performance contracting isn’t the best choice for everyone. But it can be a major tool for many budget constricted companies or governments,” says Daniel Tait, CEO of Energy Alabama. “At the end of the day, don’t let upfront cost stop a project when you have a tool like energy performance contracting.”

 

So, Where To Start?

The process is surprisingly simple, as outlined here at EnergyStar.gov. First, you competitively select an Energy Service Company (ESCO). This part is completely up to you. Of course, we’re happy to help!

Once you’ve selected your contractor, the ESCO will develop and then execute an all-inclusive energy-saving plan for your facility. The project should include an introductory energy audit as well as some kind of Monitoring and Verification (M&V) process that ensures continued savings. Besides energy efficiency, the ESCO might also focus on water conservation and distributed generation, among other components.

With the plan in place, you’ll work with the ESCO to set up long-term financing through a third party. This could be an operating lease, municipal lease or something else entirely. The idea is that the improvements cost you nothing in capital expenditures up front.

(Lease-purchase agreements are probably the most common method for financing an Energy Performance Contracting project. If you want to know more, that link has plenty more information.)

 

Reaping the Rewards

Finally, the ESCO should offer you a guarantee that your project will pay for itself through the savings generated by that all-inclusive energy-saving plan we mentioned above.

It’s as easy as that. Boost efficiency. Save money. Reap the rewards.

So, what kinds of buildings are ideal for Energy Performance Contracting? Government facilities ara a good choice, since governments generally own their buildings long-term. This makes a 10- to 20-year financing term attractive. But really, any large building could be a good candidate. Hospitals, schools, corporate headquartersthese are just a few of the facilities that could benefit from Energy Performance Contracting.

For more information, or to learn how to get started, contact Energy Alabama CEO Daniel Tait by email at dtait@alcse.org.

Energy Audit

Energy Audits: Is Your Building in Top Shape?

Cross-posted to NABPC.org

The North Alabama Buildings Performance Challenge is up and running, which means it’s time to start conserving energy. If you’ve signed up for the challenge, you’ve committed your company to attaining 20% energy savings in your building within 10 years.

Today, we’re continuing our three-part series about the primary steps that facility owners should take in order to achieve that target. By the time you finish all three posts, you should have learned a good bit of the info you’ll need to craft your energy-saving strategy.

Last time, we looked at energy benchmarking, and next time we’ll discuss commissioning. Today, though, the topic is energy audits.

An energy audit, to quote Energy.gov’s rather straightforward definition, is “a survey that shows how much energy you use in your house or apartment. It will help you find ways to use less energy.”

For our purposes, let’s just pretend they didn’t limit their explanation to houses and apartments. Whether the building is a home, business, factory, corporate headquarters or something else entirely, the concept remains the same. By giving your building an energy audit, you’ll be assessing how much energy it uses. And with that information in hand, you’ll know what measures you can take in order to use less energy and make your building more efficient.

Energy Audits vs. Benchmarking

Simple, right?Energy Audit

Now, at this point, you might be thinking that this sounds a whole lot like benchmarking, the topic of the previous entry in this series. The two concepts are indeed similar, but there’s a key difference.

Benchmarking compares your building to similar facilities in order to give you an idea of where it stands in relation to its peers. An energy audit goes one step further and sets out a plan for action.

Or, to use a fitness metaphor, benchmarking only tells you how overweight your building is. An energy audit analyzes your building’s energy usage and gives it a customized workout plan. By following the plan, you’ll whip your building into shape in no time.

Saving Money

And once your building’s energy consumption is on track, you’ll start saving money on your utility bill. How much money? According to the U.S. Department of Energy’s Better Buildings Challenge, our national model, most companies can easily capture 20% energy savings. When we say easily, we mean that most businesses can see these kinds of savings with minimal effort and investment.

That kind of reduction to your energy bill would set you on course to conquer the Huntsville Better Buildings Challenge. Plus, it would pretty much make you a rockstar at your company.

So, then, what does an energy audit look like?

In residential settings, weatherproofing and insulation are generally two big areas of concern. For industrial or commercial buildings, audits would be more likely to focus on production equipment, lighting or climate control. In either case, you’ll want to find a professional to conduct the audit for you.

What Will This Cost?

Of course, some of this may come at a cost. Preliminary energy audits, or PEAs, and (usually) Level I audits can be done for free if you proceed with upgrade work–or at least at a very low cost. For more detailed audits the cost will be a little higher.

The Pacific Northwest National Laboratory estimates that detailed energy audits generally run between $0.12 and $0.50 per square foot. We call these Level II or Level III audits. For a great rundown on the difference between the different types of audits, check out this article from Microgrid Energy.

Depending on the size of your facility, that can amount to a serious chunk of change. But it’s not all bad news, as PNNL notes:

A convention center in a major metropolitan city reduced energy costs by almost $80,000 annually by implementing energy efficient changes to equipment, controls and system. Payback for these changes was less than a year, and facility staff predict an additional savings of $174,000 annually if longer-term equipment replacements are installed.

Those figures represent savings that virtually any company could appreciate. And it all came about because of energy auditing.

Naturally, no two auditing experiences will be exactly alike. But in almost every case, you should be able to find ways to increase efficiency–and save money.

With that, you’re ready to take the plunge with an energy audit. Up next, it’s time to talk about commission. See you then.

Energy Benchmarking

Energy Benchmarking: Does Your Building Match Up?

Cross posted from NABPC.org

The North Alabama Buildings Performance Challenge is up and running, which means it’s time to start conserving energy. If you’ve signed up for the challenge, you’ve committed your company to attaining 20% energy savings in your building within 10 years.

That’s fantastic. Hooray, you! But wait, now what?

We’re glad you asked.

Starting today, we’re running a three-part series about the primary steps that facility owners should take in order to achieve that target. By the time you finish all three posts, you should have learned all the info you’ll need to start crafting your energy-saving strategy.

Ready? Let’s get started. Our next two posts will cover energy audits and commissioning, but today, our topic is energy benchmarking.

Energy benchmarking, to give you a five-second definition, is the process of measuring how much energy a building consumes, and then comparing it to the same data from similar structures across the country. In other words, it’s a simple way for owners to see how efficiently–or inefficiently–their buildings are performing.

The process is part of the federal government’s ENERGY STAR program, and if you do well enough, your building will earn ENERGY STAR certification. But that’s for later. For now, you’ll need to figure out where to start.

Energy Benchmarking: First Steps

To do that, all you need is some basic information about your facility. Based on what type of building you have, you’ll use one of three specialized tools, all of which are available at EnergyStar.gov. Commercial buildings utilize the Portfolio Manager, while industrial plants need the Energy Tracking Tool. (There are actually 80 types of buildings in the Commercial category. You can see the full list, as well as the information needed for Portfolio Manager, here.) For new construction, there’s the Target Finder.

Once you’ve figured that out, you’ll be ready to benchmark. Based on how well your facility performs, you’ll receive a score anywhere between 1 and 100, with 100 being the best possible rating. A score of 50 is average, and anything over 75 will earn you ENERGY STAR certification.

Keep in mind, however, that not every building type is eligible for an ENERGY STAR score. (To find out what types are eligible, click here.) That said, the vast majority of property types do provide an Energy Use Index (EUI) reference.

What Next?

As you can see, there’s plenty of data out there, so benchmarking should give you a pretty good idea of where you stand in comparison to your peers. The news might be good or bad, but at least you’ll know. A wise man once said knowing is half the battle, and he was right. Once you’ve made that all-important discovery, you’ll be able to take action.

Oh, and another thing. Just because you’ve gone through the benchmarking process once, that doesn’t mean you’re finished forever. Actually, it’s the opposite. From EnergyStar.gov:

Benchmarking works best when it’s done consistently over time. Can you imagine a weight-loss plan in which you only weigh yourself once a year? Of course you can’t. That’s because you can’t manage what you’re not measuring.

In a recent study, EPA found that buildings that were benchmarked consistently reduced energy use by an average of 2.4 percent per year, for a total savings of 7 percent. And, buildings that started out as poor performers saved even more. See EPA’s Portfolio Manager DataTrends series for more information.

That’s why benchmarking is important, and why you should be doing it consistently. Once you have the information about your building, you should have some idea where to make improvements. And if you keep benchmarking year after year, you’ll continue to save money on energy costs.

Taking Action

Now that you know, it’s time to take action. If you’re interested, the process is as easy as it is accessible.

A couple months back, Energy Alabama and CEO Daniel Tait held a “benchmarking jam” session at a local brewery. Besides sampling some craft beer, energy experts and business leaders discussed ways to maximize energy and water efficiency throughout the community. To take part in the jam, the business reps only had to bring the following:

  • Laptop or tablet
  • The building street address, year built, and contact information.
  • Twelve consecutive months of utility bills for all fuel types used in the building.

That was enough to get the ball rolling. And from there, the path runs straight toward evaluating your building and saving money on your energy bill. More energy benchmarking events are in the pipeline, but you don’t even have to wait. If you’re ready to begin the process now, contact Energy Alabama CEO Daniel Tait for more information.

Easy as it is, energy benchmarking isn’t the only step toward conquering the Huntsville Better Buildings Challenge. Next time, we’ll look at implementing what an energy audit can do for you.

Energy efficiency

Energy Alabama Picks: 4 Great Energy Efficiency Products

Energy efficiency is something we think about a lot here at Energy Alabama. Accelerating the transition to sustainable energy is our ultimate goal, but there’s plenty of groundwork to do in the meantime. Part of that groundwork is helping people make their homes and businesses more efficient.

There are plenty of ways to increase efficiency, and some of them are easier (and less expensive) than you might think. With that in mind, we’ve come up with this list of four great energy efficiency products that will help make your home more sustainable and comfortable.

Have another suggestion? Be sure to leave it in the comments.

 

4 Great Energy Efficiency Products

1. Ecobee3 Smart ThermostatEnergy Efficiency

Installing a programmable thermostat is a great way to save energy. And saving energy is a great way to downsize your utility bill. You win. Your wallet wins. Everyone’s happy.

The idea behind a programmable thermostat is that the temperature inside your house doesn’t always need to be the same. During the heat of the day, for instance, you might want to bump it up a notch or two—especially if you’re not at home. And at night, you might prefer a different setting than at noon. With a programmable thermostat, you can take care of that in advance.

The ecobee3 WiFi thermostat takes all of that a step further. With its remote sensor and compatibility with Amazon’s Alexa and Apple’s Siri, the ecobee3 is a fearsomely powerful thermostat. Thanks to some of its really cool built-in technology, it the ecobee3 instinctively knows when to change the temperature in your house—without you having to do anything. Several variables are at play, including the weather outside. And when someone enters a room, ecobee3 reacts to keep the room at max comfy levels.

Ecobee3’s marketers claim it saves homeowners 23% annually on their energy bills. So, do you want one yet?

Where to buy: $249 at Amazon

 

2. Smart Strip SCG-3M Energy Saving Surge Protector

Every homeowner needs a surge protector. Or two or three. If you’re an energy-conscious homeowner, you need a surge protector like the Smart Strip SCG-3M.

Our modern world runs on electricity, but every now and then, a voltage spike can occur. And when a voltage spike happens, any and all of your electronic gadgets are at risk of being fried to a crisp. That’s when a surge protector comes in handy. A surge protector limits the risk to your plugged-in devices either by blocking the spike or diverting it to ground.

The Smart Strip SCG-3M Energy Saving Surge Protector does all of that, but also saves energy in the process. In addition to two always-on outlets, the SCG-3M features four outlets that automatically turn off when not in use. Plus, it has a right-angle plug that hugs the wall. What’s not to like?

Where to buy: $25.99 at Amazon

 

3. LED Light BulbsEnergy efficiency

Great Value ENERGY STAR rated is the best bang for the buck. Make sure they are the ENERGY STAR rated ones. Walmart sells some that aren’t.

LED bulbs are the future. They last longer and use less electricity than traditional incandescent bulbs. And if you look in the right places, you can find good deals on them too.

For our money, Walmart’s Great Value brand offers the best bang for the buck. Just make sure they’re the ENERGY STAR-rated models because Walmart sells some that aren’t. This 60-watt equivalent bulb uses only 10 watts and has an estimated lifespan of 25,000 hours. And with 80% savings on energy costs, those 20,000 hours won’t set you back too much.

Where to buy: $3.22 at Walmart

 

4. Niagara Sava Spa Showerhead

Saving energy isn’t the only game in energy efficiency. Using water intelligently with a low-flow showerhead is important, too. Not to mention the savings from reduced heating of water.

The Niagara Sava Spa Showerhead does that while delivering 1.5 gallons per minute. A patented pressure compensator ensures consistent flow no matter what the water pressure is like in your house. That means you’re saving water—and more money on your utility bill.

Where to buy: $9.90 at Amazon

Huntsville Better Buildings Challenge

Why You Should Participate in the North Alabama Building Performance Challenge

If you’ve been around this blog long enough, you’ve probably heard something about the North Alabama Building Performance Challenge (NABPC). But what you might not have thought about is why you should take the challenge yourself. It’s time for us to change that.

6 Reasons to Participate in the North Alabama Building Performance Challenge

Simply stated, the goal of the HBBC is to reduce energy consumption by a targeted 20% in participating buildings across the city. Huntsville has already committed itself to becoming one of America’s most sustainable cities, but the municipal government simply can’t do this on its own. That’s where the Challenge comes in. By increasing efficiency by just 20%, we can save literally millions of dollars in North Alabama alone.

So why should you participate? Let’s take a look at a few of the reasons.

1. The North Alabama Building Performance Challenge will save you money

We couldn’t start this any other way. The first, most obvious—and probably most important for lots of people—reason you should participate in the North Alabama Building Performance Challenge is because it will save your business money.

How? Simple—increasing efficiency means paying lower utility bills. A lower utility bill means your company is saving cash. Most business exist to make money, so this is a win-win situation all around.

2. And you can reinvest that money

You’ve just saved your company bundles of cash by increasing energy efficiency by 20% in your building. Great, but now what? Well, you could reinvest those savings in any number of ways. With more capital freed up, your company could raise wages, make further improvements to the building, or embark on a totally new venture.

It really is up to you. But the main thing to remember is that these investments will come entirely from energy savings—and would essentially cost the company nothing.

 

3. You’ll help the community

By taking the Challenge, you won’t just be helping your own company. You’ll also be bringing loads of benefits to the community.

To understand why, think of the big picture. Plenty of businesses just like yours will be participating. Together, your upgrades will foster new business opportunities throughout the area while creating a more sustainable footprint.

And the upgrades will show up everywhere: Municipal buildings, hospitals, universities, and commercial sites are just a few places that could take the challenge.

 

4. You’ll spread the word

We believe in 100% percent sustainable energy for all, but we can’t do it alone. By taking the Challenge, you’ll help spread the word about sustainable energy.

The NABPC will publicly recognize partners and participants when they reach their goals. In addition, we’ll use a public map to promote buildings and owners who achieve ENERGY STAR certification. There’s no such thing as bad publicity, as the saying goes, and that’s especially true here. Who doesn’t like hearing about increasing efficiency and saving money?

 

5. It’s a good way to go green

Have you ever thought to yourself that it would be nice to go green, if only you could find a way? Here’s your chance.

Increasing efficiency is good for the environment. Using less electricity reduces demand and lessens the burden on the grid. And that’s not all. It also helps reduce America’s dependence on foreign oil.

From Energy.gov:

More efficient commercial, institutional, multifamily, and industrial buildings reduce the nation’s dependence on foreign oil, protect the environment, and save billions of dollars in energy costs that can be spent growing businesses, investing in new technologies, and creating American jobs.

More jobs. Economic growth. A better and greener environment. What’s not to like?

 

6. And most importantly…

…You’ll get this sweet participation decal.

So what are you waiting for. Contact us today for more information.