How Businesses Can Achieve Savings from Energy Efficiency Projects

It may sound obvious, but the best way for small and medium-sized businesses to achieve the maximum savings through energy efficiency projects is to first determine where the business is using the most energy. Many California business owners may think they know where the bulk of their energy is being consumed, but unless they've actually analyzed their usage, they could be mistaken.

For Northern California businesses, analyzing where they are using the most energy is easy. PG&E offers resources such as My Energy and the Business Energy Checkup tool to help businesses employ energy conservation techniques. A simple analysis can help businesses establish an energy-use baseline and identify where the best savings opportunities exist within their business for energy savings.

Understanding current energy consumption can also help small and medium-sized businesses gauge which energy efficiency projects are worth their time. Energy efficiency projects can range from simple lighting retrofits to larger projects, such as replacing a heating, ventilation and air conditioning (HVAC) system.

Businesses can achieve significant energy savings—typically between 10% and 30%¹—of annual usage through energy efficiency projects such as lighting retrofits and HVAC upgrades using ENERGY STAR^®-certified products. But attaining maximum results requires energy efficiency budgeting and careful planning. Businesses need to factor in variables such as seasonal changes in operations or weather and inflation when establishing an energy-use baseline.

These variables can cause fluctuations in energy bills, so California businesses need to assess their energy use on an annualized basis. That way they can identify the areas where they can achieve the maximum savings from an upgrade, retrofit or replacement. Customers of Pacific Gas and Electric Company (PG&E) can accomplish this by visiting the My Energy tool on the utility's website.

Where businesses should start
Larger-scale energy efficiency projects may seem unattainable at first to small and medium-sized businesses. One option to consider is to start with projects that have faster paybacks to help offset costs and provide dollars to reinvest in larger-scale projects.

Taking a portfolio-based approach to energy efficiency financing can help businesses achieve their goals without breaking the bank. For example, energy efficient lighting upgrades tend to have a faster payback period than refrigeration or HVAC retrofits. Quick savings from fastpayback measures can help offset longer-term savings from deeper retrofits – which can allow businesses to make comprehensive upgrades by leveraging the cash flow from their energy savings.

Additionally, businesses undertaking an energy efficiency project should consider the following four issues when going through the energy efficiency budgeting and planning process with their contractor:²

1. Work with a contractor to establish savings calculations. Finding a qualified contractor can help businesses determine their energy baseline and associated savings calculations. Set clear and detailed energy and cost-efficiency goals, and then get pricing estimates from your PG&E account representative. Have the contractors provide their assumptions and forecasted savings projections – and make sure you understand and agree with their numbers.
2. Factor in cost increases. It is not unusual for rising utility rates and inflation to increase a business's expenses during the expected payback period. However, ensure that your contractor is using realistic assumptions that do not inflate the potential project savings.
3. Ensure that decision makers are on the same page around the opportunity to implement energy efficiency projects. By setting clear criteria around the types of projects that will be approved and clearly communicating expectations to contractors, businesses can maximize their energy investment opportunities.
4. Consider energy efficiency financing options. There are various energy efficiency financing options available to help businesses offset the costs of projects that have longer payback periods. Tax credits, grants, loans and leasing are some of the financial resources available to aid businesses in their energy efficiency initiatives. In addition, business customers can also apply for a 0% interest loan ranging from $5,000 to $100,000 with up to a five-year repayment period, based on projected energy savings through PG&E.³

Cost and energy savings are not the only benefits of energy efficiency upgrades. Resulting improvements to employee comfort, worker productivity and the customer experience can directly impact the company's bottom line.

To learn more about the best energy efficiency budgeting plans and what resources are available to help California businesses along the way, download "The Insider's Guide to Financing Energy Efficiency Projects"" from PG&E. Using this valuable guide can help California business owners and managers set energy and cost-efficiency goals with the tools needed to implement successful energy efficiency initiatives.

1. Pacific Gas and Electric Company
2. Pacific Gas and Electric Company
3. Pacific Gas and Electric Company