Commercial building owners are always looking for ways to save more money, and one often overlooked resource is energy efficiency. Notably, research shows that utility bills–including energy bills–represent one of the highest operating costs for building owners nationally, more than taxes and insurance. To recoup these costs, most building owners pass these expenses onto their tenants through their rents. However, as the cost of rent rises and tenants threaten to leave, building owners may consider making their building more energy efficient in order to save money.
The Benefits of Energy Saving Programs
The key benefits of implementing energy efficient programs and fixes in commercial buildings can be classified as financial, operational, and intangible. Let’s take a closer look at each section.
Financial Benefits
Saving both energy and costs are the most common incentives for building owners to look into energy savings programs. Specifically, these benefits include:
- Increased profits
- Reduced energy costs
- Faster payback on investments
- Higher ROI
- Protections against rising energy costs
- Increased operational budget spending
- Increased building value
- Qualifications for tax incentives
- Reduced risk for building owners
Operational Benefits
Upgrading and modernizing building features, including utilities, result in:
- Reduced equipment maintenance
- Reduced operations/maintenance costs
- Increased equipment life and reliability
- Reduced equipment downtime due to failures
- Improved operational efficiency
- Increased building automation and control
Intangible Benefits
Cost savings and increased equipment efficiency are two examples of quantifiable, tangible benefits. Although it’s difficult to measure “intangible benefits” in terms of cost savings, these examples show that they are beneficial:
- Improved green/sustainable image associated with the building
- Increased employee productivity
- Improved tenant comfort
- Enhanced tenant loyalty
- Decreased work related injuries
- Increased tenant morale and satisfaction
- Decreased work absenteeism
- Reduced indoor air quality issues leading to health issues
Maryland Specific Energy Programs
The Baltimore-Washington corridor is home to many reputable utility companies, and the most popular is BGE. BGE offers organizations, including building owners, energy saving programs with lucrative incentives through their Smart Energy Savers Program. According to BGE, solutions for building owners include:
- Improved quality of light by retrofitting fixtures, which can reduce energy consumption by up to 50%
- Reduce lighting in common areas (when not in use) during sunny days by installing lighting controls, daylight dimmers, and occupancy sensors, saving up to 30% of your building’s lighting energy usage
- Eliminated phantom computer loads and office equipment; save up to 5% of your facility’s plug load energy usage by installing smart power strips
- Reduced energy consumption, by up to 10%, by replacing ice machines with energy-efficient models and by adding controls to beverage and snack vending machines
- Saved electricity through the cycling of components by adding a variable frequency drive to HVAC motors that power pumps and fans
- Tuned up HVAC systems to optimize energy performance and tenant comfort
- Improved market appeal of properties through enhanced lighting design and state-of-the-art control technology
Final Thoughts
Although it may not seem like an obvious solution, making your building more energy efficient (and taking advantage of available energy savings programs) is a great way to reduce operating expenses, increase profits, increase your property value, and stretch your operating budget even farther. Having your building classified as energy efficient may also attract and retain tenants. In the end, the reasons to commit to an energy savings program are too many to count, so it’s time to take advantage of local programs!
At Murphy Commercial Real Estate, we have excellent relationships with energy companies that can assist in evaluating your properties for energy efficiency improvements. For more information about ways to cut costs on building ownership, contact us today.
