- Posted by Pam Hoddinott
- On November 11, 2020
Implementing Energy Efficiency Measures Can Cut Costs but also Adds Up to a Better Customer Experience
The coronavirus pandemic has ruffled the retail industry. Retailers are scrambling to improve their online shopping experience and searching for more ways to make brick and mortar stores more operationally efficient.
There are approximately 657,000 retail stores in the United States, and these stores spend nearly $21 billion in energy costs each year. These retailers can include clothing stores, electronic stores, sports equipment stores, department stores, and many other types of stores.
Among retailers, energy is the fourth largest in-store operating cost. Lighting, space heating and cooling, and plug loads – think cash registers and computers – account for nearly 70 percent of the retail energy use. Many retail store operators are happy to learn that energy use can be reduced without negatively affecting the shopping experience for customers or the daily operations of the retailer. Furthermore, the sustainability benefits gained from energy efficient upgrades can be significant as well.
According to ENERGY STAR, retailers can benefit from energy efficiency upgrades in the following ways:
- Increased profitability. Energy savings are reflected in a company’s profit-and-loss statement as reduced operating costs, which directly increase the profitability of a retail operation.
- Reduced vulnerability to energy price fluctuations. Energy prices may be sensitive to numerous external factors, including major weather events and national policy changes. For some regions, the potential for utility deregulation also lends uncertainty to future energy costs. Reducing a retail facility’s total energy consumption can soften the impact of energy price fluctuations from any of these factors.
- Increased sales and safety. Improving the energy efficiency of a retail building usually involves upgrades to the lighting and HVAC systems. By creating a more pleasant and healthier shopping environment, these upgrades can also attract and retain more customers, leading to an increase in sales.
- Enhanced public image. With growing concerns over global warming and other environmental issues, many retailers want to demonstrate to potential customers that they are responsible environmental stewards. Retailers can upgrade their buildings to be more energy efficient as a way to achieve this goal.
Energy use in retail buildings can vary greatly, but there are several common energy optimization initiatives that can benefit most.
Benchmark. Benchmarking a retail store provides a baseline for energy consumption. This is a great starting point to compare the efficiency of stores are across a portfolio.
Energy audit. Based on energy audit information, it is then easy to determine an energy optimization strategy. Often no- or low-cost efficiency measures are a great place to start.
Supply Management. Commercial utility charges on a retailers’ utility bill can be confusing. It is important to ensure stores are on the best utility rate structure available using a supply management expert. It is also wise to consider a risk management plan to limit exposure to market swings in energy prices.
Retro-commissioning. Energy waste is common as a buildings’ performance tends to degrade over time. Retro-commissioning or RCx will ensure all building systems and equipment perform efficiently as a whole, improving energy efficiency and the comfort of customers and staff.
Lighting. ENERGY STAR states a typical retail store uses more than 20 percent of electricity consumption on lighting. A lighting retrofit or lighting upgrade can save up to 50 percent of lighting energy and potentially up to 20 percent of cooling energy.
HVAC. An HVAC upgrade can provide substantial energy savings through load reduction and improve the customer shopping experience. Improvements may also help reduce the spread of viruses improving the health and safety of staff and shoppers. The installation of Smart HVAC solutions uses a combination of energy-saving measures and fan control technology.
Sustainability. Customers are often seeking out retailers that embrace environmental stewardship. Implementing sustainability solutions can make a big impact on your customer base and to the bottom line. Energy efficiency projects provide sustainability benefits as well. Other areas retailers recognize to elevate a brand and improve corporate social responsibility are ENERGY STAR certification or LEED certification.
Rebates & Incentives. Energy efficiency projects can receive rebates or incentives offered by utility companies or at the state or federal level. These rebates can help lower the cost of an energy efficiency project and improve ROI.
Financing. Often, energy optimization projects don’t get implemented due to a lack of funds or are competing with new construction budgets. Retailers should start by Making Energy an Asset®. Stop thinking about energy as a cost center. Capital isn’t always necessary to get energy management projects approved with Energy Efficiency-as-a-Service (EaaS). EaaS is a perfect way to implement energy efficient and sustainable projects without any upfront costs. Savings from the implemented energy efficiency measures can then be used to fund other sustainability projects or additional energy optimization projects.
There are many ways to improve energy efficiency and sustainability at a retail store and even more benefits associated with doing so. It is crucial for retailers to work with an energy management company familiar with the retail business – energy savings could be tremendous.