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Ten Steps to Energy Efficiency


For multi-site retail companies, energy efficiency makes business sense. It allows retailers to reduce cost and risk, and create good will with investors, employees, customers and the government. Ultimately, it also helps improve the bottom line.

When it comes to energy management, reducing operating cost should be the focus where the cost of energy is a sizeable part of operating the business. The solution is often a multi-prong approach: The business should be flexible, pragmatic and, most importantly, relentlessly focused on the ripple effect of high energy use and cost.

Here are steps to help retailers become more energy efficient:

  1. Know what you have: An energy audit is a great way to show how much energy a store uses and where the related money is being spent.

  2. Fix what you have: Review the results of the audit and fix any deficiencies or problems.

  3. Improve what you have: Use technology to be in control and to help optimize equipment usage.

  4. Act on what you have: Analyze the data gathered, act upon it and continuously fine-tune the operation of the different systems.

  5. Evaluate what you do: Often the biggest waste of energy comes from operational and procedural issues that have been modified over time and are no longer applicable.

  6. Benchmark and innovate what you have: Always keep an eye on your competitors. Research different technologies and different industries, and never be afraid to copy what they are doing — especially if it makes sense for your business.

  7. Use an integrated approach: Leverage business operations, knowledge and expertise across different areas to capitalize on results.

  8. Invest in renewable energy: But do it only where it makes sense for your business. Doing it because everyone else is won’t be sustainable for the long run and is irresponsible to your shareholders.

  9. Educate and engage your employees: Companies must never underestimate the human factor. Employees must be engaged and educated on the benefit of these initiatives and how they will impact the bottom line.

  10. Repeat: Continuous improvementand energy-efficiency optimization are not static. Technological advances, business needs and operational issues are constantly changing. Companies must do likewise to remain competitive.

Savings: For companies big or small with high energy costs and a large real estate portfolio, the savings can be enormous. For example, a 10% savings for a typical large business that spends $50 million annually on energy bills and has a pre-tax earnings margin of 15% is equal to $33 million in additional revenue.

Restaurants spend 3% to 5% of gross sales on energy, and every $1 spent on utilities typically reflects $10 to $15 in sales. Consequently, a 10% reduction in energy costs is the equivalent of a $30,000 to $75,000 annual sales increase.

Supermarkets have energy expenditures that are the same as profit margin, about 2%. A 10% to 12% reduction in energy costs can boost profit margins by as much as 5% to 6%.

Energy-efficiency efforts typically can be classified into the following three categories, which, if implemented, can save on average 30%:

  • Passive: Refers to more efficient buildings that use efficient devices, materials and building techniques to save energy; typically these efforts yield 10% to 15% energy savings;

  • Active: Involves using technology, software and on-going maintenance, and commissioning programs to yield the most savings, typically between 5% to 25%; and

  • Proactive: Involves the use of new technologies, while continuing to benchmark against the competition. It’s hard to quantify savings, but a 5% to 7% savings would not be difficult to achieve.

With regard to energy efficiency, being proactive and strategic can yield enormous benefits for both existing and new buildings. With the right technology, analytics and vision, companies can reduce their cost and maintenance expenditure, while boosting efficiency, profitability and brand reputation.

One final point: When it comes to energy management, a commitment at the highest level of the organization is vital to success. Without it, all related efforts will fade and become meaningless slogans and empty promises.

Sam Khalilieh, P.E., P.Eng., LEED AP BD+C, is senior VP architecture and engineering at WD Partners, Dublin, Ohio.

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