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5 Ways Strategic Energy Management Can Impact Your Bottom Line

April 27, 2016 / by Max Dworkin

When your company makes changes designed to grow revenue or cut expenses, where do they usually look? Most companies turn to their core business operations. If you can produce more, you can sell more. If you can cut production costs, you can make more.


The math here is right, but it is also simplistic. There are plenty of ways, for example, to cut costs without finding more efficient ways of tackling your core competencies. And one of those ways is strategic energy management.


So many non-energy companies do not make energy a priority. Even those that know the impact a strategic energy management program could have are usually left with the scraps of their company’s resources. But you can make a business case for changing the way you look at energy sooner rather than later -- it may even have a bigger impact than you think.

 

Save Money

Cutting costs is understandably a top concern for companies considering an investment in strategic energy management. According to a recent Energy Star survey, better energy management leads to an annual energy savings of between 2 and 10% for most organizations, while some have saved as much as 60% on their annual energy bill. That kind of savings can have a huge impact on overall expenses.

 

Energy Star works to help companies reduce energy use, which is a key component of energy management. However, a comprehensive energy program goes beyond reducing energy use and improving the efficiency of critical equipment to strategically purchasing energy when it is at its lowest cost and scheduling high energy operations for more cost effective times of day. This kind of holistic program can save well beyond 10% when implemented correctly.

 

Higher Occupancy

Real estate can be a major portion of the portfolios for many different types of companies. By implementing strategic energy management at commercial buildings, both occupancy rates and asset values are likely to increase. In 2016, potential tenants are looking for buildings that offer both sustainable energy possibilities and lower utility bills. That means when you implement a strategic energy management plan, you are making your building that much more attractive to potential tenants. Higher occupancy rates translate to higher rents and ultimately better revenue potential.

 

Risk Reduction

Improving the energy efficiency of a company building, which is a key component of most strategic energy management plans, can lower risks for that company in a few different ways. This can be an important thing to mention when seeking buy-in for an energy management plan, since risk management can often have more overall high level support than strategic energy management on its own.


Energy upgrades can reduce physical risks, which in turn can have a direct impact on insurance costs. Upgrades like new lighting systems may have lower probability of causing fires, for example, and will therefore lower insurance premiums. Less obvious savings might come in the form of LED Exit signs, which lower energy costs while also increasing visibility and therefore safety.


Strategic energy management can also reduce litigation risk. When appliances and equipment are upgraded in order to maximize efficiency, they are usually safer and therefore lower risk than the machinery they are replacing.

 

Branding

Energy Star found that both consumers and employees want to “affiliate with organizations they perceive to be environmentally responsible.” That means strategic energy management and its inherent energy use and energy cost savings can be a positive influencing factors for your customers, clients, and recruits. This can be a significant value add for an energy management strategy, since employer branding and corporate stewardship both come with associated costs. Being a “good citizen” as a company can lead to better press coverage, better standing with potential employees, and increased sales.

 

Incentives

Many utilities are mandated to promote energy conservation and develop specific programs that allow their customers to participate. While this helps utilities reduce the amount of energy they need to buy and produce, it means big opportunities when you participate. There are many instances where energy conservation mandates translate into big time cash incentives for businesses to participate - as long as they are aware of the program and can complete an implementation.


This is one of the best parts of strategic energy management, being ready to take advantage of all the great programs out there, and getting paid cash incentives to do so. Rebates,tax credits, copay programs, there are many examples of the ways utilities promote energy conservation, and most have limited budgets, and short application windows. While everyone would like to get paid to do a building retrofit with an instant payback period and significant long term savings potential, the reality is that only organizations with the right resources and plan ever make it happen.  


If you are ready to find out what kinds of incentive opportunities are available in your area and get in line before they go away, click below and learn how we can help.

Save 30 Percent on Your Energy Bill


Topics: energy management, energy consumers

Max Dworkin

Written by Max Dworkin

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