Why does business throw away money?
In Europe 40% of our energy use is consumed in buildings, more than by industry or transport. There is great potential for energy savings in this field, often at little cost.
According to the ESB most companies could reduce energy costs by 30% by implementing cost-effective energy efficiency measures. A recent global study by IBM of 1,400 small and medium sized enterprises found that energy accounted for the biggest cost increase over the last two years for SMEs, surpassing healthcare, payroll, rent and equipment. A few small measures can make a dramatic difference to your energy bills so here are few tips to start cutting your energy bills.
- Low Energy Lighting will cut your bill by 40 to 90 percent immediately Lighting technology is a fast moving sector offering extraordinary and immediate efficiency gains with extremely rapid payback times often less than one year, plus the newer lighting systems have lower maintenance costs.New high-efficiency systems, apart from using dramatically less energy now come with built in motion detection and input controls to be modulated as light levels increase or decrease. A saving of between 40 to 90 per cent is realistic and achievable for most offices and commercial buildings.The vast majority of offices and commercial buildings in Ireland currently use in-efficient lighting systems. Low energy lighting systems are no longer expensive to buy. They give the earliest and quickest gains by replacing lighting systems that often use twice the amount of electricity that was really needed in buildings.With the current credit crunch, with oil price volatility its surprising how much energy is wasted with inefficient lighting systems. Recent developments in low energy lighting mean you get the same or even better quality lighting at a fraction of the running costs as much as 90% less running costs, but the main plus with low energy lighting is that these products are no longer expensive to buy so there really is no reason not to change to low energy lighting, it’s dramatically cheaper to run, the light is now of the same or higher quality and best of all is now so cheap to buy, it really makes immediate commercial sense, with payback times in months rather than years.
- Choose Energy Star Rated Computers and Office Equipment.Electrical appliances generally have some form of electrical rating. If an energy efficient appliance has a higher capital cost, this is likely to be recovered through lower operating costs over the life of the unit.When it comes to PCs and printers, over an average lifetime of 5-6 years and at an electricity rate of €0.10/kWh, the most efficient Energy Star equipment could save you as much as €150 – €200in energy for a single PC and printer. It may not be practical to turn a computer on-and-off, if it is being used throughout the day; however it is practical to turn off the monitor, when you leave the office. A single computer monitor left on 24 hours a day will cost over €65 per year, switching it off out of hours and enabling standby features could reduce this by €20 per year and prolong the lifespan of equipment.You should research the Energy Star database, it lets you pick the most energy efficient models, within the group of Energy Star qualified office equipment, which meet your performance criteria.Check out the Energy Star database when buying equipment. Another useful site is www.Topten.info which is a consumer-oriented online search tool, which presents the best appliances in various categories of products. The key criteria are energy efficiency, impact on the environment, health and quality.
- Manage & Control HeatingAccording to the ESB, the maximum recommended heating level is between 20 – 23 degrees. For each extra 1 degree, costs rise by 8%.
- Ensure the heating set-point is programmed to the correct setting and is adjusted for warmer summer periods.
- Turn down radiators before you open a window or door – radiators are usually installed next to a window, resulting in heat loss when the window is opened.
- If you feel too warm turn down the radiators first rather than let the heating escape out the window.
- Blocking radiators with furniture reduces their output and takes longer to warn up the room.
- Portable electric heaters are expensive to run so use them as a last resort
- Air Conditioning can be very Expensive Air Conditioning systems can sometimes cause respiratory and nasal problems causing blocked nose, coughing, sore throat, sneezing, especially in poorly maintained systems.A building’s air-conditioning system can be described as the lungs of the building. The air-conditioning system draws in outside air, filters it, heats, cools or humidifies it, circulates it around the building, then expels a portion of it to the outside environment.Avoid installing unnecessary equipment, particularly air conditioning – the use of split air conditioning units is ever increasing.Ireland has a relatively benign climate and often air conditioning units can be avoided by ensuring a space is adequately ventilated. Mechanical ventilation is cheaper to buy and cheaper to operate:
- Take advantage of generous Government Tax Incentives The Tanaiste, in Budget 2008, announced details of a new tax initiative (ACA) aimed at encouraging businesses to purchase certain energy-efficient equipment.
- This accelerated capital allowance incentive will allow companies to claim the full cost, in the year of purchase, of specified energy-efficient equipment against their taxable income.
- The ACA lets you cut your company’s taxable income by 100% of the capital cost of eligible energy-efficient equipment in the first year of purchase. This compares to just 12.5% for ineligible equipment. So for example, if your company spends €10,000 on eligible equipment and you pay 12.5% corporation tax, you will save €1,250 on your tax bill that year, compared to just €156.25 for an ineligible product of the same value.
The key to successfully reducing energy costs is to account for energy usage in the same way as other controllable costs rather than treating energy as a fixed overhead.
The first step to controlling energy costs effectively is to obtain detailed consumption data, to establish how, where and why energy is being used or wasted. Energy costs may not be considered as significant as other cost categories such as staff or raw materials. However it is a significant cost when compared with profit. Even a relatively modest saving on energy cost may represent a major percentage improvement on profit.
Energy cost reduction can be at least as significant from the point of view of profit increase and improved return on investment. It can be less risky than other investments as results are verifiable thus reducing investment risks further in comparison to other more risky investments such new product development.
Source: Henry Davis www.yourenergywatch.com