Why Businesses Should Care About Energy Efficiency

Back Commentary Aug 20, 2018 By Steve Oliver

The Sacramento area economy continues to grow, thriving in the wake of the Great Recession 10 years ago with new and existing business expansion. With that growth comes new opportunities, as well as some challenges for our community.

Growth can mean more jobs, revenue and tax receipts, all beneficial to regional quality of life. Growth can also present unintended consequences — higher cost of living and increased traffic come to mind. There are also energy challenges, especially in our area where heavy air conditioning use during the summer can strain electricity supplies. And businesses — large, medium and small — tend to use more energy than homes or apartments. As a result, energy costs can increase significantly on hot summer afternoons.

In California, most utilities, including community-owned SMUD, charge commercial customers different rates depending on the time of day. Businesses can save considerably on their bottom line by planning their electricity use for more economical periods and reducing the amount used through efficiency.

Business customers realize not only lower operational costs by being more energy efficient, but they also reap environmental benefits for themselves and their communities. Our community — because we experience very hot summers — can benefit significantly from a cleaner and greener approach to energy use. Reducing peak demand on the electrical grid, which is especially valuable during heat waves, helps reduce “upstream” power plant carbon emissions. Air quality is improved when power plants run less.

We know business owners are busy people. What with keeping customers satisfied, managing employees, making payroll and tackling other critical tasks, concern about inefficient lights or air conditioning may not always be on the to-do list. But it should be: Because energy efficiency is low-hanging fruit when it comes to reducing business expenses and increasing profit.

Low-Hanging Fruit

Thankfully, energy efficiency is often easy to do and there’s a lot of help available. California utilities have decades of energy efficiency experience working with business customers to reduce energy costs and save money.

Some efficiency improvements are very inexpensive and easy to get going, while more expensive upgrades can be financed — with the goal of delivering net positive cash flow when energy bill savings exceed monthly payments. Consider some of the options:

  • Switching to cost-effective components like LED lighting, programmable thermostats, occupancy sensors
  • Revisiting energy management system strategies that control building performance by ensuring that schedules, temperature set points, economizer operation and other programming elements are optimized and functioning as intended (because these control strategies are complex, and problems can be difficult to detect, California utilities offer financial support through retro-commissioning programs)
  • Changing out major equipment, and upgrades to heating and cooling equipment, windows and sophisticated controls at existing facilities
  • Designing new buildings for high efficiency (incentives from SMUD are available for the building owner and the construction design team)
  • The Department of Energy’s Energy-Star program certifies a range of efficient appliances from basic office equipment to large-scale uninterruptible power supplies for data centers
  • Other commercial appliances, like restaurant food service equipment are frequently supported with utility rebates (to offset the cost of efficient equipment)

Another benefit to a business becoming more energy efficient: Efficient buildings can more easily be supported with renewable generation or with green pricing programs. Many utilities also offer community solar programs. These programs provide long-term rate stability so a business can predict its utility expenses.

These benefits may be very useful for some businesses that need to meet or exceed corporate sustainability goals. They also deliver significant public relations value and the benefits of being green.

The Energy Future is Now

Some larger companies — Apple and Samsung come to mind — are establishing carbon-neutral mandates, and many more are expected to follow. When you consider all energy options, electricity is the only one that can potentially deliver the Holy Grail of being carbon-neutral. Renewable solar and wind generation used in utility green pricing programs or community solar results in electricity that is carbon-free for the end user.  

Utilities and regulatory agencies are beginning to focus on the “electrification” of transportation, heating and cooking technologies. Developers benefit from electrification because going all-electric is an attractive option from a sustainability perspective and may be appealing to a customer segment, providing a unique market offering. Also, gas infrastructure costs are reduced, with the saved money helping to pay for other upgrades such as solar photovoltaic rooftop systems.

Everything said, when it comes to businesses using energy, it’s no longer the same old spreadsheet. We urge business owners to take advantage of the many offerings out there in the form of advice, measures, rebates, incentives, financing and unique programs that can save businesses money and go a long way in protecting our environment, both locally and globally.


Tripp Tucker (not verified)August 21, 2018 - 4:54am

Energy efficiency also includes system electrical efficiency that includes true unity power factor and automatic current phase balancing. Clean electricity technology is ultra efficient and has many benefits when used in conjunction with new and old electrical technologies.

Visitor- Syed Azam Ali (not verified)September 11, 2018 - 11:21pm

Energy Efficiency is a export commodity from the USA.
How could one join in the effort to export this commodity internationally to a known market in a third world country.