Category Archives: Energy Management

Underevaluated Source of Energy Usage: Plug Load

When a building owner or manager calls for an energy audit, they are usually looking for ways to upgrade lighting, HVAC, insulation or windows to save energy. The big items. Technology has improved markedly in recent years in these areas to justify upgrades resulting in significant energy use savings.

However, one area that is sometimes overlooked in an energy audit is plug load. According to the US Energy Information Administration, plug load can comprise up to 30% of total energy consumption of a commercial building. It should not be neglected.

Plug load is energy demand (almost always electricity) from devices plugged into electrical outlets (one notable exception is a stove/oven, plugged into a supply of natural gas. These devices include computers, speakers, printers, monitors, scanner, copiers, chargers, TVs, space heaters, fans, refrigerators, microwaves, coffee machines, vending machines, task (desk) lighting, and others. These are mainly small items and taken for granted because they are so commonplace. However, while each item may draw less electricity compared to a large AC, cumulatively they can use significant energy and if not properly planned and controlled, can impact your energy costs.

3 Things You Can Do To Lower Plug Load Energy Costs

Use Efficient Equipment

While these may be “small” items one just “runs in” and purchases quickly, there are differences in energy use among similar equipment. The USEPA and USDOE have a joint program called “Energy Star” which compares many plug load items. Brands that are Energy Star-certified generally use at least 20% less energy (usually, electricity) than the average for the item, yet performs the same. Such items have an Energy Star logo displayed prominently on the equipment and box. A McKinsey study lists different strategies to reduce GHG emissions (usually matched with energy reduction), and puts plug load programs like Energy Star at or near the top in terms of economic effectiveness. See page 5 of the report from: https://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/impact-of-the-financial-crisis-on-carbon-economics-version-21. Many Energy Star products may be a few more dollars (or for larger equipment, $50) more expensive than the average one, but the energy savings will pay back that extra upfront cost very quickly, normally in just a few months. And then the savings for the rest of the time you own the equipment is “gravy”.

Another advantage of Energy Star is that it is an energy cost saving approach that does not rely on engineering or any kind of “work.” It is simple: a change in policy by Purchasing to purchase only Energy Star products allow you to lock in cost savings.

Controls

Smart controls allow you to program equipment for, say, “sleep” mode during certain hours or off altogether. For example, software can turn a vending machine’s lights and refrigeration off or reduce them slightly during non-office hours to save energy, yet keep food fresh. Sensors can turn off computers or lights when not in use. Make sure controls can be overridden, when necessary. This allows you to keep energy from being used when not needed, yet does not involve daily manual efforts to do so, which rarely work.

Raise Awareness

Make sure your employees/residents understand the importance of plug load as contributing to energy costs, which affect their costs as employees and renters. In time, they will be motivated to turn off equipment when not in use, saving energy. And they’ll do so at home, saving them costs, as well.

CCES can help your building or company review and analyze your energy use, including equipment, software controls, and operations with the intent of finding common sense and technological solutions to enable you to save significant energy costs while enhancing productivity. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Growing Proof That Improved Indoor Quality Results in Healthier Occupants

Harvard University scientists recently published an article in the journal Building and Environment summarizing 30 years of public health research demonstrating that improved indoor environmental quality directly results in better health outcomes. “The Impact of Working in a Green-Certified Building on Cognitive Function and Health” by MacNaughton, Satish, Laurent, Flanigan, Vallarino, Coull, Spengler, and Allen, Building and Environment 114 (2017) 178-186

One recent research project utilized 109 participants from 10 buildings in 5 different US cities that met ASHRAE Standard 62.1 (2010) ventilation requirements and had low indoor total volatile organic compound concentrations. In each city, buildings were matched over time by tenant, type of worker, and work functions. Buildings were distinguished concerning whether they had achieved green certification. Workers were administered a cognitive function test of higher order decision-making performance twice during the same week while indoor environmental quality parameters were monitored. Workers in green-certified buildings scored 26% higher on cognitive function tests, controlling for annual earnings, job category and level of schooling, and had 30% fewer sick building symptoms than those workers in non-certified buildings.

These outcomes may be explained by a number of indoor environmental quality factors which certified green buildings must meet, such as temperature control and lighting. However, the findings suggest that the benefits of green certification standards go beyond measurable environmental quality factors. The researchers have given the name “buildingomics” to describe the holistic approach for examining the complexity of factors in a building that influence human health. They believe further research will identify how these different factors lead to positive cognitive and health results.

In response to this growing trend, the USGBC has recently developed and issued new building standards to maximize indoor environmental quality known as WELL. The first buildings are being evaluated for whether they meet WELL standards and the first practitioners are studying for and becoming accredited as WELL professionals. See: https://www.wellcertified.com/

CCES is growing our expertise about WELL, as well, and can provide for you information about the standards and be able to provide insight and perform a study to demonstrate whether your existing or planned building meets WELL standards and, if not, what can be done to meet the WELL certification standards, including estimated costs to achieve WELL, and to maximize the health and financial benefits of WELL certification. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Update on Energy – October 2017

October 2017 has been an eventful month in US energy news.

Trump Administration Takes Steps to Repeal Clean Power Plan

On October 10, the Trump Administration’s USEPA submitted a proposal to repeal the Clean Power Plan (CPP), which mandates 32% reduction in CO2 emissions by 2030, undoing a signature achievement of the previous administration. The proposed change would repeal the CPP entirely, not just the portions that the Administration disagrees with. While the agency has said it will submit a future ”carbon” rule, it did not give any details of when that might be. Therefore, many think this represents repeal, but not replace, of CPP. While some commentators believe the CPP usurps the rights of states to regulate energy and would force a shift from coal, others say that CPP does provide states flexibility on how to comply with the greenhouse gas (GHG) reduction requirements. Even USEPA Administrator Scott Pruitt acknowledges that GHGs must be regulated due to the “endangerment” rulings made by the Supreme Court in 2007 and 2014; greenhouse gases meet the legal definition of an “air pollutant”, and the Clean Air Act requires its regulation to reduce emissions.

However, the impact of a repeal of CPP, if it survives the inevitable lawusits, is hard to determine. The US has already succeeded in reducing GHG emissions by 13% in the last 9 years, mainly because of a shift from coal to natural gas and growth in renewable energy (both due to market prices). Certainly more and more companies are learning that using cleaner fuels and energy conservation result in major, multiple financial benefits. The recent major storms, some of which were acknowledged to be exacerbated by Climate Change, impact businesses. Between these two, it will be interesting to see how business interests react to the potential elimination of the CPP and disincentives toward clean and renewable power.

USDOE Directs FERC to Issue Rules Supporting Nuclear, Coal

On September 29, USDOE Secretary Rick Perry directed the Federal Energy Regulatory Commission (FERC) to undertake rulemaking to enable generation assets in regional transmission organizations and independent systems operators to receive payments for reliability and resiliency benefits viewed as uncompensated under current market rules. If adopted, the proposed rule would provide revenue to coal and nuclear generators by allowing cost-based recovery, independent of normal market forces counteracting market forces that have recently have exerted significant downward pressure on rates. Coal producers and nuclear facilities would receive payments just for being “there” in case of an emergency, even if they are not used to supply a utility with electricity. Secretary Perry considers this a security issue, as making coal and nuclear sources more viable would raise the reliability of the US’s electric grid in case of market changes and its resiliency in case of severe storms or conditions. Others feel that this is a way to support the coal and nuclear industries; pay fees for not producing electricity. The proposed rule must be implemented by FERC, not USDOE; thus, it may take some time to go into effect.

Utility-Scale Solar Costs Fell 29% Last Year

A recent National Renewable Energy Laboratory (NREL) report showed that utility-scale solar costs fell 29% last year to roughly $35/MWh. This continues a trend as utility-scale solar power purchase agreement (PPA) costs have dropped nearly 75% since 2009. The report can be found: https://www.nrel.gov/docs/fy17osti/68925.pdf. The USDOE Laboratory based its study on 189 PPAs nationwide totaling nearly 11,800 MW. The cost decline is attributed to lower equipment component costs, improving efficiency of converting sunlight to electricity, and lower labor costs. The NREL study indicates that USDOE’s SunShot Initiative (https://energy.gov/eere/sunshot/sunshot-initiative) has already reached its 2020 cost target for utility-scale solar systems three years early. The report offered that the rate of cost reduction is declining; however, the growing flexibility given by new battery storage projects attached to utility-scale solar will only grow utility-scale solar project’s value.

CCES can help your company with technical issues concerning energy whether it be how to maximize financial benefits of being more energy efficient and how to have your energy system serve you more reliably and resiliently. Contact us today at 914-584-6720 or at karell@CCESworld.com.

U.S. Climate Change News October 2017

Trump Administration Takes Steps To Repeal the Clean Power Plan. On October 10, 2017, USEPA Administrator Scott Pruitt submitted to the Federal Register proposed legislation to repeal the Clean Power Plan, President Obama’s signature legislation to significantly reduce U.S. greenhouse gases (GHG) by developing stringent GHG emission standards for power production. As coal-fired power plants cannot reasonably meet these emission standards. The USEPA believes it is unfair to have legislation to target a particular fuel type, and began the repeal process to encourage growth in coal usage from U.S. mines. This is quite controversial as coal, a high emitter of GHGs, as well as other and toxic compounds, is still a major source of energy in the U.S. electric industry. By encouraging coal production and use, the U.S. would be hard-pressed to meet the Paris Climate Accord goals, although President Trump has already announced that the U.S. will leave the Accord anyway. In addition, much has been written that this move may make little difference, as other economic factors makes coal a non-ideal choice as a fuel for a utility (see below), such as the declining cost of building and operating a renewable plant. The public has 60 days from initial publication in the Federal Register to comment after which the USEPA must respond before making the repeal official.

States, Cities And Private Businesses Put U.S. Halfway To Paris Climate Accord Goal. According to a study released on September 25 by New Climate Institute and the Climate Group, efforts to address climate change by states, cities and corporations have already put the U.S. halfway toward its Paris Accord climate goal despite the current Administration’s attempt to reverse recent federal efforts. The study estimated that such efforts will cause GHG emissions to drop by 12-14% below the 2005 baseline by 2025. The study, based on certified data from the Carbon Disclosure Project, found that U.S. private sector commitments were the biggest factor in reducing GHG emissions. The decline in emissions are being caused mainly by these commitments of switching from fossil fuel combustion to renewable power.

First State-Wide, Economy-Wide Carbon Tax Is Proposed. Earlier this year, a bill was introduced in the Massachusetts House and another in the Senate that would establish a tax on fossil fuels with the goals to reduce GHG emissions and return the proceeds to consumers and businesses. https://malegislature.gov/Bills/190/H1726. Both bills would impose an initial tax of $10 or $20 per ton of CO2 emissions, rising to $40 per ton in the future. Several years ago, the USEPA estimated that the cost of a ton of GHG emissions was about $42 per ton, which was why they chose this endpoint. It was understood it needed to be approached gradually. Both bills require refunding of some or all of the tax proceeds to households and businesses.
It is estimated that should either bill become law the price of gasoline and heating fuel in Massachusetts would eventually rise by about 35 cents per gallon. The bills contain rebate programs to incentivize energy efficiency, rewarding businesses or households that reduce energy usage per employee (or member), not just energy usage as a whole.

Currently, Massachusetts enforces GHG reduction rules targeted to power plants. However, with electric generation comprising just 28% of GHG emissions in Massachusetts, legislators felt it was time to regulate other sectors, as well, particularly, the transportation sector, which accounts for about 30% of statewide GHG emissions.

While certain business groups are concerned about competitiveness and disproportionate impacts, the bills have many co-sponsors. Therefore, it is likely that some such bill will pass and with a sympathetic governor, a carbon tax would become law in Massachusetts, perhaps signed in 2018, going into initial effect in 2019.

CCES has the technical experts to help you assess your energy needs and help you be more energy efficient, which has many financial benefits, including preparing for future carbon taxes or monetization of GHG emission credits. Contact us today and we can help at 914-584-6720 or at karell@CCESworld.com.

Why Energy Should Be Incorporated As Part of Your Company’s Strategy

It’s approaching the end of the year, which means self-evaluation of your company. What went well; what did not. What can be changed or should be incorporated to ensure growth moving forward? Historically, companies focus on sales and profits. Look at the headlines in major business journals: “XYZ Reports Auto Sales Jumped by X% In 1 Year”, etc. Expenses are pretty important, but the one that most companies seem to focus on is labor, as in how can it be lowered (lay off workers, increase automation, etc.). While companies cumulatively spend billions on energy annually, that expense is considered a fixed expense with little need for managing. This is a mistake. Companies can reduce energy costs and at the same time reduce risk and improve resilience.

Energy should be more important to a corporation given the fixed supply of it and issues involving regulations due to environmental, climate change, and business trends. Companies can now make choices about its energy sources and usage that it could not have made before with impacts on profit, costs, and flexibility. This is exemplified by the shift in the U.S. from traditional industrial manufacturing to more IT, cloud-based services by corporations, where energy costs can be a potential deal breaker.

Sources

Companies now have many more options of where energy comes from than before. A major new force is renewables. Solar, wind, hydro have been around for a while, but major technological advances now make building an operating a solar PV farm comparable to purchasing electricity from the local utility or running your own cogen. With the growing number of states who want to achieve a higher percentage of power derived from renewables and utilities wanting to get more facilities to become independent because of infrastructure concerns, incentives exist to sweeten the pot even more if one wants to invest in renewable power.

Another approach is to look at site-specific approaches and restrictions. You have a specific facility in a certain country or region. What are the sources of energy that are most easily accessible and plentiful in that region? Companies should make sure that equipment is capable of using that fuel or be ready to invest in new plants to secure that energy source. And they should take the long view. Which fuels may be impacted by future climate change rules or by future shortages for political or technical reasons?

Usage

Obviously, reducing usage of a fuel critical for your operations will reduce costs. But doing so will also improve your operational flexibility. If there is a looming shortage of a critical fuel, and you use less of it than your competitors, that flexibility puts you in a more commanding position, needing less. Being able to use more than one type of fuel for critical operations is beneficial, too, and gives your firm tremendous flexibility to ride price upheavals.

An overlooked issue in minimizing energy usage and improve flexibility is treatment of heavy equipment. Boilers, AC equipment, electric generators all need to be maintained and replaced at the appropriate times. It is a positive investment to perform retro-commissioning to maintain that the equipment is operating as you wish it; for you, the owner, to get your money’s worth. Also overlooked is proper training. Sometimes the first to be let go are maintenance workers; they appear not to contribute to the “bottom line”. But good maintenance people and managers (overseeing good procedures) can lengthen the effective life of equipment and keep down usage and costs very effectively.

How-To

A key to getting energy to be taken seriously as a top-of-the-line corporate interest is to have the top person, the CEO, involved. He/she should understand the importance of managing energy in a robust way and what the benefits are to the company’s moving forward. There may be doubters in the C-suite, including people who may not want Energy to “elbow its way” into decision making. But if the CEO understands the ultimate value of considering, tracking, and managing energy sources and usage, then those doubters can be silenced. So invest time in educating the entire C-suite, but particularly the CEO and update him/her on developments.

Make sure that energy is tracked as well as other business items, such as sales, workforce, profits, etc., and is included in business reports. Make sure that gains and benefits are explained and recognized.

CCES can help your company develop a robust energy program to serve your company. Its infrastructure, as well as technical evaluations of strategies to raise its value in the company and to demonstrate financial benefits. Contact us today at karell@CCESworld.com or at 914-584-6720.

New, Supplemental and Complementary Green Building Standards: WELL

The most widely used green building rating system in the world is LEED, created by the US Green Business Council (USGBC). LEED certification is a globally recognized symbol of sustainability achievement, and the standards provide guidance to help building owners and managers conserve energy and water, reduce waste, and minimize building and occupants’ environmental impacts. LEED has been well received and more and more new and renovated buildings are becoming LEED certified. Building owners are beginning to reap real, significant financial benefits of their LEED-certified buildings.

However, for some LEED is a standard with limited benefits. Some company and building owners realize that their tenants, whether residents, employees, shoppers, or students, are more concerned with their health. Can buildings contain features that will improve the health and welfare of occupants, making them happier and more productive, as well as raising the asset value or driving demand for the space?

The USGBC has addressed this by publishing such unique standards called WELL Building Standards, or “WELL” for short. WELL consists of features across seven concepts that comprehensively address the design and operations of buildings as well as how these features impact and influence human behaviors related to health and well-being. The seven concepts addressed in WELL standards include:

• Air
• Water
• Nourishment
• Light
• Fitness
• Comfort
• Mind

Like LEED, WELL standards contain mandatory pre-requisites across these areas that all WELL-certified buildings must meet at a minimum, as well as a point system that must be satisfied for WELL certification. These standards to improve the health and well-being of occupants include, but are not limited to, proper ventilation, reducing the level of indoor air pollutants, improving drinking water quality, reducing infiltration of water, promoting the use of natural light, and having specific building areas devoted to improve fitness and relaxation. Like LEED, WELL has a system to accredit professional practitioners, so having an accredited WELL professional on your certification team means being professionally guided to achieve WELL certification. Innovation in design and building operation to optimize meeting WELL standards is also rewarded.

WELL is a new program, and the first initial projects are being undertaken now and the first professionals accredited. How much will a WELL-certified building benefit a business, in terms of worker health, reduced sick days, improved productivity, etc.? The data will be collected and we will soon be able to validate the claims. However, there is no question that the common sense standards can only succeed in reducing sick days, improving both health and morale, and raise confidence and motivation, critical in sales.

If you are interested in learning more about WELL standards, learning whether this is the yardstick that is best for your building or business, and determining what it takes to become WELL-certified, contact Ms. Bonnie Hagen of Bright Energy Services today at bonnie@brightenergyservcies.com or at 914-425-1376 or Marc Karell of CCES at karell@CCESworld.com or at 914-584-6720.

Our Hang-up With Energy Rebates

I can’t tell you the number of times I have approached building owners or managers with great opportunities to upgrade energy systems (lights, HVAC, etc.) saving money right away and paying back the investment in a short time, and the first question I’m asked is “Are there any rebates?”. When I tell a client there are none for that or it is paltry, the building owner/manager actually ignores the many other benefits and is reluctant to do the project. If the payback of an upgrade is under 3 years and the ROI of investment is double digit percent growth per year anyway, why should a rebate “make or break” a project? I guess some people really enjoy “free money”, of part of the cost being paid by a government or utility. While a client and the engineer should look for all available applicable rebates, it is unreasonable to actually squelch a project due to its absence.

So that you understand why rebates may or may not be available in your area, here is some background. It is certainly contrary to business sense for a utility to pay a building to install and utilize technology that will cause it to use less energy (natural gas or electricity). Utilities offer rebates for either of two reasons. One is they are forced to by the state’s government or watchdog agency. These elected officials or people beholden to them know that being able to say that they saved a certain amount of a resource or utilized it more efficiently is what people want and a good thing for a politician to boast. A second reason is that the more energy a region uses, the greater the infrastructure costs are for the utility. In even modest utility districts, utilities are forced to spend billions of dollars in capital costs to upgrade, expand, or replace existing infrastructure (utility lines, gas lines, etc.). And, of course, to ensure they are up-to-date and safe. If infrastructure fails, and a power blackout results or a gas line explodes, the negative headlines, the anger of residents and businesses, and being hauled into legislative hearings over the failure, is something to avoid at nearly all costs. Therefore, the less energy used, the less that infrastructure needs to be upgraded and at a lower cost.

Therefore, it is important to do research on rebates. The availability and amount for different programs vary between utilities. In general, most rebates are universal for a utility. A rebate for LED lights resulting in decreased electric usage is valid throughout a utility’s district. However, some utilities designate some rebates as greater in different areas within the district. For example, in New York City, Con Edison’s Demand Response Program encouraging building owners to use their own generators and be off the grid during peak demand periods, has greater rebate payments for buildings located in a certain area which has seen the greatest growth in electrical demand (gentrification) and weakest infrastructure. And lower incentives everywhere else, including zones where infrastructure is fine. So look carefully at the conditions of a rebate.

Part of your research should also be on timing. Utilities and the commissions that oversee them often decide annually on rebates. They decide if they are effective or not, look at market conditions, and then adjust for the next year. A rebate at a certain level this year may go down (or up) next year or be eliminated altogether. For example, some utilities are reducing or eliminating LED lighting rebates. The price of LEDs has droped recently, plus it is more accepted. Many feel an incentive is no longer needed; savings and payback are sufficient without it. Your engineer (including this one!) should keep up with the latest trends and talk to those managing rebates.

I should add that I have seen the opposite reaction (occasionally) of building owners and managers feeling almost guilty about receiving a rebate for an upgrade. Nobody should feel this way. Most rebates come from charges that are in your monthly utility bill. You pay into a fund used for rebates. Therefore, when you do an upgrade, you are simply taking back the money that you have put in!

In summary, research or have your engineer research and go forward with any energy rebates that an upgrade qualifies for. However, don’t be hung-up on it. If a rebate (or tax deduction or other financial benefit) does not exist or is only worth a small percentage of the upfront cost, let it not stop you from doing the project. The vast majority of energy upgrade projects are very financially beneficial for building owners for a long-period of time even without utility or government rebates.

CCES has the experts and experience to help you get the maximum financial benefits from an energy upgrade, including being up to date on potential rebates and to get you through the application process. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Plain Talk: What Is An Energy Audit? Why Do One?

What Is An Energy Audit?

A professional energy audit tells you how much energy you use, its cost, in what functions in your building, and provides multiple recommendations that will result in significant energy usage and cost savings, if implemented.

Some Of The Many Direct Financial Benefits

Real life examples show that properly-performed energy audits can provide a building owner direct financial benefits, such as:

• Significant energy cost savings beginning quickly, that grow in value as rates rise, and continue for a long time; (one upgrade saves costs for many years)

• Tenant attraction/retention, and, therefore, higher rents than less efficient space

• Greater worker productivity/buyer comfort (retail), all adding to tenant satisfaction

• Rise in of asset valuation (which would a buyer prefer, a building demonstrated to be energy efficient or a dark, leaky high oil/gas usage one?)

• Achievement of building certification standards, which will further raise the value

• Potentially obtain utility rebates, state grants and federal tax incentives. More and more entities want buildings to be efficient and will pay for verified achievements.

Simple Example

A simple example of energy efficiency is lights. LEDs can produce the same – even more – light for less than half the wattage of an incandescent or fluorescent. For example, if you replace one 40-watt fluorescent light with a similarly-sized 18-watt LED, then the bulb will use 22 fewer watts to create the same light. If it is used 10 hours/day, 5 days/week, 50 weeks/year, then electricity savings is 55 kWh per year. At $0.20/kWh, the savings is $11 per year. From just one light! If your building uses hundreds of lights, then the savings is so much more. There is no risk of failure; 18 watts means 18 watts.

How To Get Good Ideas For Savings? Have A Professional Energy Audit Done.

The professional group ASHRAE has defined 3 levels of professional energy audits.

Level I

• Brief analysis of the building’s historic energy bills

• Brief on-site building survey to gather basic information about energy use and systems (i.e., very rough count of lights, basic nameplate information about units)

• Listing of potential energy use- and cost-saving strategies, known as Energy Conservation Measures (ECMs). Rough savings and cost analysis for each one.

Level II

• Detailed analysis of the building’s energy bills, preferably previous 24 months.

• Detailed on-site building survey to identify more thoroughly the building’s energy systems and equipment (i.e., more thorough, accurate lighting count, more details about boilers, rooftop units, etc.)

• Identify, describe ECMs and provide a more detailed savings and cost analysis, including estimating payback (time it will take for energy cost savings to equal outlay plus operating costs of ECM) and return-on-investment.

• Discussion of any changes to building operations and maintenance procedures by each listed ECM, including secondary benefits (i.e., reduced maintenance).

Level III

Includes the components of a Level II Energy Audit, plus:

• More extensive data collection, particularly of the physical building, such as leak points, doors, and windows.

• Use of approved, site-specific energy computer models to estimate heat losses and infiltrations throughout year

• More refined energy and financial analysis from multiple vendors, including upfront costs, incentives, savings, and ROI.

• Evaluation of long-term energy savings and operational cost trends.

Smartest Way To Get Started

So now you will look for great long-term energy savings opportunities for your company. Count how have many buildings you wish to audit and their complexity. If your company manages many buildings, it may be useful to perform a Level I energy audit on all of them. While the ECMs may contain rough estimations, at least you can compare energy efficiencies leaving yourself with a group with greater opportunity to focus on. If you have a smaller number of buildings and/or they are complex (involve many functions or have many specific energy systems), then you may want to have Level II audits done to get good estimates at a reasonable cost. Level III audits are very expensive and generally do not justify the extra expense and effort unless such accuracy is necessary.

Hire An Experienced Pro

“You get what you pay for.” Why skimp and save a few thousand dollars on an energy audit if that means hiring someone without a professional engineer’s license or equivalent certification (i.e., CEM). They can provide numbers that are plain wrong or lead to missed opportunities or pursuing projects that are not worthwhile; lost money! This can cost your company much, much more than the savings of a “cheapo” firm. Hire a qualified energy auditor; there is a lot riding on it. Make sure the professional is experienced in buildings similar to yours.

As you can see, there is no magic wand that can be waved to bring instantaneous, substantial energy cost savings. One must invest time and money and bring in smart, experienced professionals to do it right. But once done right, the savings and the direct financial benefits are tremendous. Most good energy projects have ROIs better than what is achieved on Wall St. Good luck!

CCES has the technical expertise to perform all types of energy auditing for diverse building types to maximize your financial benefits. We can get you the applicable incentives you deserve and can project manage ECMs you choose as most relevant to your building. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Future of Renewable Energy Investments

The young Trump Administration and the House of Representatives have published preliminary tax reform plans that will likely have an adverse effect on the future growth of renewable energy in the US. If enacted, these may be a dis-investment for new projects. While exact details are unknown, as this is published, the fear of future dis-incentives to build or finance a project itself has a chilling effect.

One matter that has not been discussed openly is the future of renewable energy tax credits. Currently, investments in solar and wind projects are eligible for an investment tax credit. However, over the next few years the credit, used for many solar projects, is scheduled to decrease to and remain at 10% beginning in 2022. The production tax credit for producing power from wind will phase out entirely in 2020. Might the Trump Administration accelerate the decrease in these incentives or eliminate them sooner? During his confirmation hearings, Secretary of the Treasury Steven Mnuchin said that he does not intend to accelerate the phase-out of the production tax credit.

Note that the current renewable energy credit programs result in tax credits that can only be used to offset taxes (not increase a refund). With the proposed major reduction in corporate and individual income tax rates and accelerated write-offs for business expenses, the value of renewable energy credits would therefore be sharply reduced (lower taxes to offset with credits from a renewable energy project). This could take away the financial incentive to invest in large-scale renewable energy projects.
The Trump Administration’s proposed tax reform also includes a border adjustment tax, raising the cost of imported material and equipment. Since many solar and wind farms components come from China, this could add to the cost of new projects, if adopted.

In another tax-related item concerning energy, 22 US Senators recently introduced a bill containing a proposed extension of EPAct (Section 179D of the IRS Code) until 2019 and beyond. EPAct allows a building owner (or significant contributor for tax-exempt buildings) to earn tax deductions for successful energy efficiency projects. EPAct has expired and is currently not in effect. The proposed bill contains changes to the old language, including new technology-neutral tax incentives for clean energy. If this version of the bill is enacted, the maximum deduction for energy efficiency projects would increase to $4.75/sq.ft., based on achieving a minimum of $1.00/sq.ft. deduction for achieving a 25% reduction against the ASHRAE 90.1-2016 standard, and an additional $0.25/sq.ft. for every additional 5% reduction above that. The proposed bill also contains a new provision, entitling building owners to achieve a tax deduction of up to $9.25/sq.ft. for comprehensive energy upgrades that exceed energy saving targets. While the old 179D allows minor deductions for small upgrades, the proposed version would reward a building owner that exceeds robust energy goals. It is unsure whether this new version of 179D will pass Congress and, if so, when.

In summary, while details are unknown, the proposed new tax reforms of the new Administration may potentially hurt renewable energy projects. At this early stage, it is unknown whether these proposals will be enacted and in what form. Might the changes be enacted and the renewable energy industry in the US be hurt in order to raise revenue to offset the many tax rate reductions the reform plan currently proposes or as a way to discourage renewable energy and encourage growth of fossil fuel plants? The answers are unknown, but the implications should be part of any company’s planning.

This is meant as a general overview based on publicly published material. Discuss specific implications for your business with your accounting or tax professional. CCES is here to help you with technical assessments of your energy usage and systems. We can present sound technical strategies to reduce your energy use and peak demand and save you considerable cost and provide other tangible, financial advantages, as well. Contact us today at karell@CCESworld.com or at 914-584-6720.

Realistic US Energy Trends in 2017

The Trump Administration is beginning to have its imprint on energy policy. Yet, many potential moves may not be very effective given market forces, which certainly drives business. The University of Texas’s Energy Institute has issued an interactive map showing the cheapest energy sources and greatest availability throughout the US. http://calculators.energy.utexas.edu/lcoe_map/#/county/tech and http://www.vox.com/energy-and-environment/2016/12/12/13914942/interactive-map-cheapest-power-plant

The Future of Coal is Not Favorable

Despite the President’s promise to bring back jobs to coal miners, the map’s information is pretty obvious that natural gas and renewables are likely to provide much of the U.S.’s new electric capacity in the foreseeable future. In addition, the map shows why the cost of building and operating new coal-fired plants is so high and non-competitive. This concurs with recent papers issued by the US Energy Information Administration.

Part of the problem for coal is geography. Prices to build wind farms have plummeted lately, and the Plains states, which have been high historic users of coal for power, are ideal location for wind plants (they have plenty of it). And in the South and Northeast, natural gas prices have dropped greatly, in part because of fracking and shale gas. Besides raw materials being cheaper, natural gas plants are more efficient than coal-fired plants. A modern gas-fired plant can convert 60% of the theoretical energy to electricity; for a modern coal plant, it is about 35%. Even if environmental regulations affecting coal are repealed, wind subsidies are eliminated, and gas prices spike, the cost of a new coal-fired power plant still cannot compete with wind or natural gas, and investors and builders will go with gas-fired and renewable power plants.

The Future of Nuclear Power is Murky

Despite its many detractors, nuclear power is growing in Europe and other parts of the world and, without a doubt, results in much lower greenhouse gas emissions than any fossil fuel-based plant. However, it is still expensive to build a new nuclear plant in the U.S., an estimated $8,000/kW, almost double that of other forms of electricity. There is research on advanced reactors with smaller, modular designs that in the future may be safer and less expensive than current mammoth reactors. The Trump Administration has signaled its approval of nuclear power, but has not suggested what it would be willing to do to help alleviate the cost differential.

Renewable Power

All signs indicate that the cost of renewables (solar, wind, geothermal) will continue to drop in the coming years. Renewable power has grown greatly worldwide, spurring a learning curve and a drop in costs due to greater efficiency and experience. Even if utilities and state governments reduce or end incentive programs for renewables, these will still rank in many parts of the country as the most cost effective power plants around. This will be especially true if and when large-scale battery power can be modernized both technically and financially to address the issue of inconsistent generation of power from renewables.

CCES can help you assess your future energy options to give you maximum operating flexibility and maximize your financial benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.