Small Business and Energy Efficiency

Strange Bedfellows

What can local business owners do to improve the efficiency of their buildings?

When it comes to running a small business, there are many hats to wear and a lot of questions. Are clients being served well with an exceptional product that meets their needs? How can sales be increased by expanding the client base? Are employees trained well, delivering great service and being paid competitively? Are all of the accounting, legal and insurance affairs in order? Is the building well-maintained? With all of these daily concerns to address, it’s not surprising that small business owners do not have time to think about the energy efficiency of their buildings.

Many owners think about facilities management when a furnace or air conditioner breaks down, when a toilet overflows, or when light bulbs need to be replaced. But who is responsible for the overall energy efficiency of the building? Who is looking at the utility bills, identifying opportunities and implementing measures to maximize efficiency? While some businesses are fortunate to have on-site or on-call maintenance staff, that’s a luxury most can’t afford, so a building’s energy use is often an afterthought.

Incentivizing Efficiency
In central Illinois, the move to implement energy efficiency measures is led largely by Ameren Illinois’ Act On Energy program, which offers attractive incentives for businesses in categories such as lighting, heating, cooling and water heating. According to actonenergy.com, lighting can account for 20 to 50 percent of electricity consumption, not counting gas fuel. The move from T12 lighting to T8 or T5 is one of the easiest changes you can make for an immediate impact and quick payback on the investment. Act On Energy also offers incentives for replacing inefficient furnaces, air conditioners and water heaters, as well as incentives involving variable frequency drives, steam traps and even retrocommissioning. As an energy consultant, I would not hesitate to recommend business owners take advantage of these incentives. However, there is one major incentive missing.

With regard to the energy it takes to heat and cool a building, arguably the largest determining factor is the building shell. If the walls and top level of a building are not well-insulated, outdoor temperatures will have a dramatic impact on how often the heating and cooling systems must run. If the outer shell has unsealed penetrations, the building’s air leakage rate will also have a dramatic impact. For buildings that are not well-insulated or air-sealed, business owners will often find occupants complaining about areas that are too hot or too cold. It’s also likely the utility bills are much higher.

How does a business owner know their utility bills are too high? Homeowners often have a pretty good idea if they are paying too much, but there are so many variables with businesses, it can be difficult to gauge. An argument can easily be made for conducting an energy analysis of the building. Enter the Energy Star Portfolio Manager. With this free online tool, businesses can enter data about their building, including size, age and usage types, and receive a comparison to other buildings that operate similarly.

What happens if business owners want to upgrade the insulation in their building and want financial help? That’s where the Act On Energy program falls short, but not because they aren’t aware of the benefits of an upgrade to the building shell. Rather, the problem is one of economics. In order to justify the program’s incentives, they must be able to show the kilowatt-hours and therms saved from implementing a given measure. Ultimately, these results are reported to the State of Illinois, so they must make sure their numbers are accurate. However, demonstrating savings for insulation and air sealing is not an exact science. An energy advisor cannot simply enter a few data points into a spreadsheet to project realistic savings; it requires many data points to do it effectively.

Another Act On Energy incentive, called the “custom program,” may be able to incentivize an upgrade if the business owner can show a payback period of one to seven years. How much will a business owner save for implementing air sealing and insulation to a building shell? There are a lot of uncontrollable variables that come into play, including weather patterns and occupant use, and both can be unpredictable. To get an accurate payback on a suggested measure, a series of data points must be collected about the building and entered into a spreadsheet called an energy model. An energy model is a great way to help business owners make smart, strategic decisions about their buildings, but it’s time-consuming, and the expense of getting the model will often cut into or even wipe out the incentive paid out by Act On Energy.

Ultimately, there really is nothing to help move the market in central Illinois for small business owners to upgrade the building shell—and help pay for the investment. With so many other financial decisions to make, a capital investment is a hard sell when revenue is tight. There is another program run out of Champaign through the Smart Energy Design Assistance Center that can step in to fill the gap, but its focus generally lies with larger commercial buildings above 20,000 square feet.

A Strategic Energy Plan
So what can a small business owner in central Illinois do? Begin by tracking your building’s energy usage. Take a look at the free Energy Star Portfolio Manager, and compare your usage with similar buildings. If the owner does not have time, assign the task to someone else in the organization or hire an energy consultant. Ultimately, the person who pays (or approves) the energy bills for the business would be the ideal choice, as he or she has an investment in the results.

Next, start the conversation about implementing upgrades in both the short term and the long term. If you don’t have the capital for larger investments now, start with the low-hanging fruit: the Act On Energy incentives. Use the money saved this year to help finance upgrades next year and fund further measures down the road without pulling dollars from other areas of the budget.

Conduct an analysis of the building. No successful business gets where it is without a plan, and facilities management is no different. If you have in-house staff, get them involved; perhaps offer a financial incentive if they can reduce energy consumption. Spread out the ownership for energy efficiency and see it take hold. If you do not have in-house staff, talk to your heating and cooling contractor, as they likely have staff who can do an analysis for you, or consider hiring an energy consultant. With a strategic plan in place, you don’t have to waste money on measures that don’t make sense and have little payback on the investment. iBi

Todd Abercrombie is an energy consultant and president of EverGreen Home Energy Consultants, Inc. in Peoria. He is a certified professional with the Building Performance Institute and a LEED Green Associate with the U.S. Green Building Council.

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