The Hidden Benefits of Energy Conservation

Key Points
  • Energy savings alone may result in a long payback, making costly efficiency upgrades a tough sell.
  • Efficiency projects have a number of additional benefits that make them more attractive.
  • Hidden benefits include longer equipment life, improved productivity and reduced maintenance costs.
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While energy-efficiency improvements are a great way to lower utility bills, costly upgrades with a long payback period can be a tough sell to the financial decision makers in your organization. To overcome objections, it may be necessary to look beyond energy costs and savings. Energy projects can help your business in a number of ways: longer equipment life, reduced maintenance costs, improved productivity and enhanced public image. By emphasizing these hidden benefits, you can make a stronger case for long-term investments in energy efficiency.

Extended equipment life. All equipment has a rated operating life. This rating is based on an average number of operating hours per year. In addition to saving on energy costs, turning things down and turning things off will extend the useful life of equipment. Other conservation measures will have a positive impact on equipment life, as well. Lowering the pressure on air compressors, for example, will save energy by reducing the amount of air lost to leakage, and it will extend the life of the compressor by reducing wear on the motor.

Reduced maintenance costs. Energy-efficiency retrofits can help to reduce maintenance costs. For example, the latest T8 fluorescent light fixtures have a lifetime rating of 30,000 hours compared to 20,000 hours or less for T12s. By switching, you will save energy, reduce the amount of time spent changing out lamps or replacing fixtures, and lower expenses.

Improved productivity. Energy-saving upgrades, such as daylighting and advanced air-filtration systems, help to improve the overall work atmosphere and indoor air quality. These improvements have been shown to increase worker productivity and reduce absenteeism. In a 2009 survey of employers who moved operations into green buildings, more than half reported an increase in productivity while 45 percent saw a decrease in absenteeism. Of those reporting a change, there was an average of three fewer sick days per employee and a 5 percent increase in overall productivity. (Miller, 2009)

Reduced risk from energy price fluctuations. Like any commodity, the cost of energy can vary. Often, these price changes are based on supply issues or seasonal demand. When energy becomes a smaller part of the operational budget, the organization is less vulnerable to price spikes in key energy resources, such as electricity and natural gas.

Enhanced public image and value. Green is in. Consumers want to buy environmentally friendly products and talented employees want to work for green organizations. The consuming public, as well as environmental regulators, are interested in conserving resources and reducing harmful emissions. By using energy efficiently and reducing your carbon footprint, your organization will stand out. A 2011 Harris poll found that nearly 70 percent of those surveyed prefer to work in a green facility. A 2011 building market report found that green-certified buildings command a rent premium of up to 6 percent. In addition, the green properties that sold during the same period sold for a premium of up to 19 percent. (Watson 2011)

See PG&E's Tips and How-To's for ideas on how you can save money and better manage your energy use.


"PG&E" refers to Pacific Gas and Electric Company, a subsidiary of PG&E Corporation.
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