Why Virtual Energy Managers Can Save Companies Thousands.
Business today is changing rapidly. They way we conducted business ten years ago looks and sounds completely outdated compared to how we conduct business today. In today’s business everything is virtual, we now have virtual office spaces, outsourced CFO’s and virtual assistance. In the same way sales professionals can now close sales without the need to travel across the country.
All of this is possible due to the immense amount of data that is at our fingertips. In a matter of seconds we can run complex reports and know the state of our companies, with companies such as DOMO business intelligence can be put in front of us with a few short key strokes. With this information companies can tell pull key metrics such as customer acquisition costs or cost per (X) to manufacture or develop a product in a matter of seconds.
We have data on almost every aspect of our business except for energy. If you look at a typical energy bill what information do you see? For power, you typically get KW and kWh but does this information actually tell you anything? Typically the data provided by the utility tells you what happened inside your facility, now when, how or why it happened. If your utility is like most utilities, there could be over 100 different rate schedules for your business to be on. How do you know you are on the right rate schedule? How do you know what you are paying for your energy is what you should be paying? What about Taxes and fees? Are you paying taxes and fees you shouldn’t?
I was recently with a university in the midwest and they showed me their power bill and although they had eight power meters feeding the campus, the power bill was less than one page showing only the KW (Demand) and kWh consumption. After a little investigation, we were able to identify about $30,000 worth of fees that they have been paying for 18 years!
With this little data, companies and organizations of all sizes are spending millions of dollars a year trying to reduce their energy consumption, which brings to mind the old saying:
“You Can’t Manage What You Can’t Measure”
How are these companies managing their energy cost with so little data? Why is it that of the items that has a direct effect on bottom line gets so little attention when it comes to data?
Because of these questions, many organizations hire an energy manager of some sort. When it comes to energy manager solutions, traditionally there have been three options available to the average business all of which provide their own advantages and disadvantages:
There are a number of companies across the United States that offer energy consulting services for organizations of all sizes. These consultants either work for a larger consulting company or are themselves Certified Energy Managers (CEMs). These companies are great at identifying energy savings opportunities and Energy Conservation Measures (ECMs). They are usually compensated either by a flat monthly fee, or through a shared savings plan.
Full-Time Energy Managers
The benefits of a full-time energy managers are immense. Having somebody on your team that is not only verifying utility bills but also benchmarking and looking for ECMs in extremely valuable. These professionals work with energy companies such as LED and solar installers to find the best energy saving opportunities. They can also perform measurement & verification.
Energy Savings Companies
These companies, often referred to as ESCOs typically work with larger organizations such as governments and universities. Their process typically includes an Investment Grade Audit (IGA) as well as a comprehensive process of identifying ECMs and other energy and cost savings initiatives. These ESCOs can be invaluable to work with and could offer unique financing options, such as performance contracting. However, if your facility doesn’t consume enough energy, you may not qualify for their services.
Virtual Energy Managers
If your goal is to simply reduce your energy than any of these aren’t a bad idea but how do you know you are getting the best product for you? How do you independently measure Return on Investment (ROI)?
If you hire a full-time energy manager as an employee than you have more of an advocate on your side but the costs of employee these individuals can be high and may end up negating any ROI benefits.
How do companies properly implement energy conservation measures without bias? How could a CFO know if the solar installation proposal they just received gives an accurate ROI?
Just like outsourcing your CFO or Administrative Assistant, virtual energy managers can save companies thousands of dollars by adding an energy advocate to your company without the overhead of a team member or the pain of shared savings. The approach to saving money is simple, start with the data. It is critical that all proper data is gathered about the company before any ECM is installed to create the proper baseline. The virtual energy manager process is simple.
- Start by installing an energy meter for real-time data.
- Automate all utility bills for comparison and rate schedule optimization.
- Gather key building data, such as operation schedules, square footage, equipment schedule, etc.
- Identify energy conservation opportunities.
- Contact contractors for pricing proposals
- Discuss proposals with customer and identify best possible contract and/or solution.
- After implementation of Energy Conservation Measures begin the proper Measurement & Verification (M&V).
Through these simple steps, virtual energy managers, save companies thousands of dollars in energy consumption and costs.
Getting to the Data
Whatever route you decide to take on your path to energy management, it is important to gather the
proper data necessary to achieve your goals. Utility bills simply do not provide the data necessary to properly implement and energy conservation plan. This is where Real-Time Metering come in.
Through implementing real-time metering, companies can see not only what is happening inside their facility, but when it happens and the dat can help provide a solution as to the “why” of the cause of your energy consumption.
Like all things in business it comes down to the data. If you are not successfully measuring your energy consumption than you can’t possible successfully be managing your energy.