Are you paying too much for your utilities? Here are 3 key ways companies can and should save on their energy costs:
- On the “Wrong” Utility Rate?
Utility companies have rate schedules which they assign to commercial and industrial customers. It should be straightforward, right? Well, that’s not exactly how it works. By analyzing the rates best suited to each meter’s load profile, significant savings can be identified. In one instance, DCI (www.DCISolutions.net) was able to reduce one hotel’s utility rates by 27% in the course of a utility audit. In short, a hotel that uses energy 24/7 should not be on the same rate schedule as a large building that uses most of its energy during weekdays and business hours. Knowing the unpublished rates that utility companies may be giving to other companies with similar profiles is another way that significant savings can be realized.
- Retrofit the “Right” Way.
Retrofitting a building might be benefitting your contractor more than you. With some utility rebates covering 99% of the cost of a retrofit, a contractor can move a ton of mediocre equipment that does little to reduce actual energy consumption. The client then loses his one chance to make his retrofit count for the greatest possible reduction in energy consumption. With LED (light emitting diodes) fixtures can provide significant savings – up to 75% off traditional lamps. New, higher efficiency standards were set by the Energy Independence and Security Act of 2007 (EISA), with new lamps approximately 25% more efficient as of January, 2012. There are still choices among the energy efficient bulbs available which can be confusing for consumers. While LED Retrofits which replace compact fluorescents will provide decent savings, an LED Fixtures retrofit is approximately 4X more efficient. In one scenario, DCI did an analysis of a 100,000 sq/ft building. By retrofitting with LED fixtures, 10 year savings were approximately $170,000 before any tax credits. If the same company were to do the retrofit with LED tubes the 10 year savings were estimated to be $47,000 with no tax credit available.
- Get Tax Advantages
Tax deductions known as Partial Capital Asset Retirement are available for property owners who retrofit a building with LED fixtures. If the owner has a Capital Lease they would gain an additional EPAct Tax deduction, but again only for the LED fixtures. In the above example of the 100,000 sq/ft building, the DCI analysis showed an approximate $80,000 in the Capital Asset Retirement deduction and an additional $60,000 with the EPAct Tax deduction. At a 30% tax rate, this building owner would have received approximately $42,000 net after tax in savings.
DCI’s team of experts have specific energy expertise. With a deep understanding of rate schedules as they pertain to meter loads, unpublished rates, and specialty tax credits, we provide an analysis and strategy to bring decrease energy costs for business owners of all sizes.