How It Works – Cutting your ENERGY Costs

The cost of energy—electricity and fuel—continues to spiral upward. Reducing energy usage can cut your company’s operating expenses and at the same time reduce the production of greenhouse gases. It may also enable you to pay less for the energy you use. From caulking your windows to installing a wind turbine, there are many energy-saving and cost-saving options to choose from.

Find Your Baseline
Before taking action to reduce energy costs, it’s a good idea to determine your baseline energy usage. This information, along with such data as the number of operating hours per year, will help you determine where to focus your savings effort. After you make improvements, this baseline information will allow you to track your savings and see how long it takes for the improvements you’ve made to pay for themselves.

You’ll need to know what your historical energy usage and energy costs have been. This may take some research into your records, but generally you can find the information you need on your utility and fuel bills. To have a useful history, you may want to look back as long as five years to allow for different conditions in the climate and the economic cycle. For each month, track the energy usage (kilowatt hours, therms of natural gas, gallons of heating oil), the unit cost of the electricity or fuel and the total cost. Also, gather some basic information about your plant and its operation: the square footage of your building, the number of employees and the number of hours you operated each year.

A First Step: Reduce Energy Usage
Once you have your baseline data in hand, you can make a plan to reduce your costs. Free energy audits are available from utility companies, and that is a good place to start. You can also check in with services available from your state energy office, or from a resource such as the university-based Industrial Assistance Centers, which are part of the U.S. Department of Energy’s Industrial Technologies Program (see “For more information”).

Some basic energy-saving recommendations include to:

• Caulk and weatherstrip windows and doors, or replace them
• Insulate your building
• Replace lights with high-efficiency lamps
• Turn off equipment when not in use
• Use occupancy sensors to turn off lights when no one is in a room
• Reduce leakage in compressed air lines and valves
• Reduce compressed air pressure to the minimum required
• Install compressor air inlets in coolest locations
• Use ceiling fans to equalize air temperature in spaces with high ceilings
• Reduce ventilation air to industry standard level
• Install air seals on the loading dock

More Effort, More Savings

You may decide to take a whole different energy-saving approach to some aspect of your building and operations. Here are some technologies you might want to consider.

• Heat pump: For space that is both heated and air conditioned during the year, you can use a heat pump instead of a furnace and an air conditioning system. A heat pump system resembles an air conditioning system, but it is capable of not only extracting heat from inside and sending it outside, but also of extracting heat from the outdoors and bringing it indoors. This could offer you cost savings over the course of the year, especially if you are in a location that has moderate heating/cooling needs and may not need auxiliary heat during the winter.
• Ventilation heat recovery: When you exhaust the warm air and bring in cold air (or vice versa) you’re sending some of your heating or cooling dollars out the window. Air-to-air heat exchangers designed for ventilation use the outgoing air to bring the incoming air to near room temperature. Models are available that dehumidify the incoming air during the air conditioning season.
• High-efficiency motors: Motors consume half the energy used in the U.S., and two-thirds of the energy used in industry, according to the Consortium for Energy Efficiency (CEE). Premium-efficiency motors provide efficiency just a few percent higher than standard motors, but can pay back their purchase price in two years or less if they run at least 80 hours per week. These premium-efficiency motors also run cooler than standard motors and can be expected to last longer.
• Skylights: In the days before electric lighting, factories were constructed with large windows to let in sunlight. Studies of energy use show that lighting accounts for as much as one-third of electricity usage in commercial buildings. Many industrial buildings these days are built with few, if any, windows, so they need electric lighting all day long. You can use high-efficiency lights, of course, but you could save even more energy by making use of sunlight— it’s free. Specially designed skylight systems installed on the roof can conduct daylight into the building, allowing you to turn off the lights altogether when the sun is bright. A lightsensing system inside the building can turn on the lights when daylight is not sufficient.
• Green roof: Plants can play a part in energy conservation. Much of your heat load in the summer and heat loss during the winter goes through the roof. A plant-covered “green roof” is an environmentally sound option for saving energy. A green roof system includes a waterproof roofing membrane covered by a growing medium planted with specially selected plants. In summer, the plants absorb the heat from the sun and provide evaporative cooling. Year round, the green roof provides some insulation and also absorbs rain water, minimizing runoff from the roof.

Reducing the Unit Cost of the Energy You Use

You need electricity all day, every day, to run your shop. You’ll want to save as many kilowatt-hours as you can, but there may also be ways to reduce the cost of the power you use.

• Off-peak rates: Your electric utility company may offer the option of different rates for electricity used at different times of day. If so, it could be worth your while to adjust your operations to take advantage of lower rates.
• Contract rates for electricity or fuel: If your operation uses a lot of electric power or fuel, you may be able to contract with providers for reduced rates. Check for alternate providers in your area. You can also work through a consultant experienced in finding lower-cost suppliers. Many of these consultants do the up-front work for free—analyzing your energy usage and researching suppliers; then, if you do save money, you pay them a portion of the savings for a period of time. One such consultant receives 50 percent of the savings for a period of five years, for example.
• Burning used motor oil: If you have access to a steady supply of waste motor oil, consider installing a used-oil furnace or boiler. Then, your fuel is essentially free and you can save the cost of disposing the used oil. One supplier recommends you need at least 500 to 700 gallons of used motor oil per year to make the system cost effective. If you need additional oil during the heating season, you can use the standard #2 heating oil that is used in conventional furnaces.

Incentives for Reduction of Electricity Use

Electric companies may actually pay you to reduce your energy usage, either on a temporary basis or by reducing your maximum usage. Check with your electric utility company to find out about available incentive programs.

• Voluntary load shedding: Your electric utility company has a only certain amount of generating capacity. When demand rises too high, typically on very hot days during the summer, the utility may need to shut down power to different areas, a process known as rolling blackouts or load shedding. Many electric utilities offer incentives to companies that volunteer to reduce their electric usage during periods of high demand. The incentive might be a certain number of dollars per kilowatt shed, as recorded by a special electric meter.
• Reducing your peak: Though they can reduce the load by rolling blackouts, electric companies generally try to have sufficient capacity to meet peak demand. To do this, the utility has to maintain a lot more generating capacity than is needed day to day. Many utilities offer incentives for you to complete projects that permanently reduce your peak use of electricity.

Making Your Own Energy

A “combined heat and power” (CHP) system, also called a cogeneration system, generates electricity for you to use and also provides heating/cooling. A CHP system is made up of a power source (often a diesel engine or a turbine that runs on natural gas), a generator, associated controls and a connection to your electrical system. The engine or turbine turns a generator that produces the electricity. The heat given off by the engine or turbine can be used for space heating. A special type of cooling unit, called an absorption chiller, can use the heat to produce chilled water for air conditioning or other uses.

Harvesting Energy from the Wind and Sun

Depending on your location, you may be able to take advantage of sun or wind power to provide some of your energy needs. Many types of tax credits, low-interest loans and other types of financial assistance are available from federal and state governments, and other sources for installing wind and solar projects.

• Wind: The local average wind speed will determine if your site can provide you with enough electricity to justify installing a wind turbine. A minimum year-round average wind speed of 10 mph (about 17 km/hour) is widely regarded as adequate. This occurs in areas on the Great Plains, in mountains, and along coastlines. Look online for wind velocity maps. Also, you can measure the wind speed at your location with an anemometer over a period of time. Other site factors must also be taken into account. For example, your town must allow construction of the tower on your property. A 10-kilowatt wind turbine might cost $50,000 to erect and, if well-maintained, could have a working life of 20 years.
• Solar: You can use the power of the sun to heat water directly or to produce electricity with photovoltaic cells. The amount of solar energy you can harvest depends on how intense the sunlight is at your location. Solar power density is, of course, highest in the South and Desert Southwest. You can find solar density maps online. Different types of systems increase the collection of solar energy by tracking the sun during the day and/or by concentrating sunlight with lenses.

You have many opportunities for saving energy and reducing the amount you pay for the energy needed to run your shop. If you adopt some of these methods and technologies, you can not only save money, you can feel good about conserving fossil fuels and doing something good for the environment.