The Nature of Business: Businesses should focus on energy efficiency
Colorado’s Climate Action Plan (CAP), introduced by Governor Ritter in 2007, calls for an 80 percent reduction in greenhouse gas emissions by 2050 from 2005 baseline levels. Businesses will play a large role in working towards this goal, primarily through improving energy efficiency. Energy efficiency is the most cost-effective means to reduce energy consumption, and more than half of the CAP’s utility sector emission reductions should result from efficiency improvements. Renewable energy generation is also a key component of Colorado’s energy vision, with a requirement for investor-owned utilities to produce 30 percent of their power from renewable sources by 2020.
Although renewable energy generation is important for the future, businesses should invest the majority of their resources in energy efficiency before investing in renewable energy. The reason is simple. By definition, energy efficiency implies an ability to use less energy to achieve the same desired result. In other words, an inefficient building is using more power than it needs. Through increasing energy efficiency by using less power in existing facilities, businesses can help utilities maximize their existing infrastructure. Even in an area of population growth, utilities may be able to use existing power plants – instead of building new ones – as end users consume less energy.
Environmentally conscious businesses often express interest in generating renewable energy for their buildings. While placing photovoltaic panels on a building is laudable, it does not make sense if the panels are generating power for incandescent bulbs that could easily be replaced by compact fluorescent lamps. A business should reduce wasted electricity by upgrading its lighting, and subsequently consider renewable energy to generate power the building truly needs. Although completing a lighting retrofit or purchasing a new heating system will not garner a front-page story like installing solar panels or a wind turbine, improving energy efficiency is the most cost-effective way to reduce energy consumption.
Once simple behavior changes like turning off the lights and adjusting the thermostat are employed, many businesses are not sure how to proceed. An energy audit is the next step in developing an energy management plan. Many local businesses and commercial properties qualify for a $200-$300 energy assessment through Xcel Energy; alternatively, private contractors also conduct comprehensive energy audits.
An energy audit will provide businesses with a detailed report outlining baseline energy consumption, a menu of energy-saving options, estimated costs and savings for each proposed action, and detailed information on available rebates and incentives for specific projects. The most cost-effective projects will be easily identifiable from the audit report. Energy audits often reveal that lighting upgrades offer the best return on investment, in part because of current rebate offerings. Many lighting upgrade projects will result in a payback of less than three years, and rebates are available for simply replacing incandescent bulbs with compact fluorescent lamps. In fact, Xcel Energy offers free lighting audits for qualified small businesses to help identify recommended upgrades. In fact, it has never been easier for businesses to gain the information they need to make informed decisions on reducing their energy consumption.
Businesses that conduct energy audits on their facilities, and take action on the recommendations, will save money and contribute to achieving Colorado’s emission goals. Coloradans can also rest assured than an increasing percentage of the power they purchase from Xcel will be produced from renewable sources – as a result of the state-mandated renewable energy requirements. As businesses become more energy efficient, they can begin to incorporate renewable energy production for their buildings into their overarching energy management plan.
The Nature of Business is written by Roxane Peyser and Jennifer Schenk of maurgood, llc, a sustainability consulting firm that helps companies and organizations achieve business responsibility and sustainability goals. Jennifer is a Senior Analyst at maurgood and can be reached at email@example.com.
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