In a new report entitled How to create big opportunities to save energy for small businesses, the American Council for an Energy Efficient Economy (ACEEE) finds that small businesses “. . . represent 90% of US businesses and consume about 20% of US energy, but they attract less than 4% of utility energy efficiency spending.” Small-to-medium-sized businesses (SMB) often struggle to act upon energy efficiency programs because of investment barriers, including savings uncertainty, insufficient payback/ROI, and lack of funding. Another important barrier, however, is uncertainty about what these programs entail and what opportunities are provided. Many businesses may be missing out on opportunities to take advantage of utility energy efficiency opportunities and incentives. The following will cover how New England utility companies determine small business eligibility and the programs and offerings that are available.
Utility Definition of a Small Business
Utility companies have different requirements for determining small business status than the Small Business Administration (SBA): energy consumption, which may vary state by state. As long as a company remains under the average kW threshold for the year, they can participate. In Massachusetts, for example, small business status is obtained if a business consumes under 300 kilowatts (kW) annually. In New Hampshire, for another example, a business would be eligible if it consumed under 200 kW annually.
Customers can look at their monthly energy bill to determine their energy demand. Below is an example of a Massachusetts-based 160,000 square foot manufacturing facility. Based on their electric meter readings, their peak demand is 200 kW, which means the utility reserves up to 200 kW for the facility at all times. The average monthly energy consumption (kWh) of the facility is about 44,130, which is over 500,000 kWh annually. This facility consumes a significant amount of energy, yet is well under the kW requirements for small business program eligibility in Massachusetts.
It is important to keep in mind that facility size and employee count does not necessarily reflect energy consumption; every business has different operating procedures and consumes energy in different ways. A 250-employee commercial office could consume less energy than the manufacturer in the above example. Many businesses may not realize they can take advantage of utility energy efficiency programs because of a misunderstanding of their energy consumption.
Utility Energy Efficiency Measures
The small business energy efficiency landscape has changed significantly over the past few years. At one time, the majority of SMB incentives were only for lighting and lighting controls. “Historically, utilities have focused on their largest consumers, because that’s where the so-called low-hanging fruit exists,” says Roger Flanagan, director of energy services business for Lockheed Martin. Today, utilities are investing in SMBs on a grander scale, incentivizing a suite of lighting and mechanical opportunities that compare with the offerings to large businesses.
This is where we run into our uncertainty barrier. In our own experience, we have come to the same conclusion as the ACEEE’s findings: SMBs may be unaware of additional program offerings and services. New England utility company programs are some of the most advanced in the country, and many of the following cost-saving opportunities are available and incentivized for SMBs:
Mechanical Equipment
- HVAC controls
- Energy management systems
- Chiller controls
- Variable air volume
- Variable frequency drives
- EC motors and controls
- Economizers
- Distribution & Ventilation
- Demand controlled ventilation
- EC motors and controls
- Exhaust hood controls
- Laboratory fume hoods
- Automatic sash controls
- Variable speed drives
- Temperature controls
Building Envelope
- Insulation
- Air sealing
- Weatherstripping
- Air barriers
Natural Gas
- Pipe insulation
- Duct sealing and insulation
- Boiler reset controls
- Programmable thermostats
Water Conservation
- Pre-rinse spray valves
- Faucet aerators
- Low-flow showerheads
- Swimming pool covers
- High-efficiency toilets
Final Thoughts
Building owners and facility managers should be aware of what energy efficiency opportunities are available and whether they may be eligible for the small business utility programs. Furthermore, if you are in the process of upgrading to high-efficiency lighting for the first time, consider looking into more comprehensive solutions while the time and/or resources are available. If you have already completed an energy efficiency lighting retrofit, remember: there are many other measures that can help your business significantly reduce operating costs and improve your bottom line.