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Sunday, 15 September 2013 22:00

Behind the Curve: With energy still cheap, many businesses aren’t prioritizing efficiency measures

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Behind the Curve: With energy still cheap, many businesses aren’t prioritizing efficiency measures COURTESY PHOTO

Energy efficiency may be a hot topic among some business leaders and elected officials in state government, but companies doing work in the field say more education is needed to demystify the rapidly evolving technology.

In many cases, the people who can’t identify what appliance in their home is using the most energy are also the ones who are making business decisions about energy, said Matt Simms, owner of Grand Rapids-based Simms Energy LLC. Too often, business leaders look at energy use as just a line item in the company budget and think of the expense in the same way they look at their monthly home energy bills, he said.

On top of that, the energy efficiency technologies that were new to the market maybe three years ago are already vastly improved. LED lighting, low-flow plumbing, monitoring systems and other products keep getting better, Simms said. Those advancements are occurring while energy continues to become a more complex part of the business landscape.

“We’re building efficiency and there are lots who are investing in it — even the federal government is pushing it,” Simms said. “The buzz it out there, but we have to start doing a better job of putting it in dollars and cents.”

Simms’ company produces next-generation energy efficiency products in West Michigan, but he said that roughly 80 percent of his business comes from helping foreign clients. People in other countries already understand what energy efficiency products and monitoring systems can do to improve a company’s bottom line, he said.

“(Those in Europe and elsewhere) have been dealing with energy prices that are two and three times what we pay here in the states,” Simms said. “They were looking at energy use as a line item three or four years ago and asking, ‘Why aren’t we tracking this?’”

While companies often pay less attention to tracking water or natural gas usage, Simms said electricity remains the number one target. But he adds that it’s not hard to effectively monitor all of those utilities.  

Smart companies want to know what energy efficiency investments they can start to make that will have the best return on their investment, said Brian Pageau, head of business development and marketing for Hudsonville-based Midwest Energy Group. The company designs, implements and manages energy efficiency systems.

But energy efficiency measures are competing with other business investments that companies need to make as they focus on growth as the economy improves, Pageau said. Rightly so, managers need to pay close attention to allocating capital to the parts of the business that provide the best returns, he said.

With utility prices relatively low compared with foreign markets and given the abundance of natural gas that could provide cheap energy for some time, many businesses aren’t in a hurry to educate themselves on the energy efficiency tools that are already available and proven, Simms said.

A slow, incremental rise in energy costs has not been enough to spur the general business community to act, outside of energy-intensive manufacturers. Although energy costs are not expected to spike, Simms said that’s no excuse for businesses to ignore energy, especially as tighter regulations on fossil fuels are implemented and as supplies become scarcer in the long-term.

While there is a growing market for energy efficiency products and widgets, not every company is tackling energy efficiency in a holistic manner that company leaders can wrap their arms around, Pageau said.

“Our way of selling efficiency is very much based on the bottom line impact of efficiency on the business,” Pageau said. “We take all the factors and we do a good job of telling the whole story. When people understand what’s possible in their building and they have a prioritized list with a budget and ROI associated with each project, people that hold the purse strings can more easily get behind projects.”

Additionally, many companies may believe they’ve picked off all the low-hanging fruit when it comes to energy efficiency projects, but Pageau said even those who consider themselves forerunners of energy efficiency adoption might be surprised to find even more investments with shorter-term paybacks because of the industry’s rapid rate of innovation.

Although the number of companies warming to energy efficiency investments is growing, their desires have not led to widespread actions just yet, he said.

Oftentimes, leaders within a company have a good understanding of energy efficiency systems and of the benefits for implementing them, but those leaders might not be working together to get the projects done.

“In companies, there are usually three types of people: facilities people, administrative people and management people. All three care about energy consumption and, in some form, are trying to do the same thing, but they often work in silos,” Pageau said.  “I think it is largely true to say there is a gap in the education level.”

Read 6663 times Last modified on Sunday, 15 September 2013 15:07

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