Electrons move at the speed of light. Shouldn’t your energy efficiency plans get moving, too?
Savings at light speed: Energy conservation pays off fast
Here’s a little something to remember whenever high electric bills and peak prices leave you exasperated: If an electron traveled around the circumference of earth instead of bouncing around the nucleus of an atom, it would – in one second – travel about our planet some 7.5 times.
Electrons move so fast, it’s been hard for engineers and scientists to come up with effective ways to store them. This is why electricity must be used the instant it’s generated and peak rates exist in the first place.
Fortunately, you can conserve electricity or shift the times when you’re using some of it, and it makes good business sense to do so. In fact, if you really want to chalk up some fast-action profits, energy efficiency should be part of your organization’s business plan.
According to Sageworks, Inc., a financial information company, private firms had average net profit of 7.3 per cent during 2015. Firms with the highest net margin tend to be service organizations. Often, manufacturing operations net only 5 per cent of sales revenue as profit.
With that kind of margin, a manufacturer would need $2 million in sales to generate $100,000 worth of net gain. Because reductions in a company’s energy bill translate into bottom-line impact quickly, even a $50,000 reduction in energy costs could be as profitable as a million-dollar order.
What’s more, there are plenty of potential gains to be had. Industry consumes more than one-third of Canada’s energy use. It doesn’t need to, according to the International Energy Agency. That organization estimates that Canada’s industrial sector still has left some 70 per cent of its potential energy efficiency savings untapped.
Leaving energy efficiency out of your business plans impacts other aspects of your business and, ultimately, competitiveness. For instance, an IEA study found that reducing energy use per unit of items manufactured directly impacts productivity, and the resulting benefit could be more than two and half times the savings on energy use.
How do energy reductions translate into productivity gains? Here’s is an example cited in a study by the American Council for an Energy Efficient Economy: By optimizing the use of steam in a plywood manufacturing plant, one company saved energy on the boiler’s natural gas consumption and also increased the rate of throughput of its product, thereby raising its plant’s daily yield. Lower energy costs and more product = higher profits from those speedy electrons.
There are smaller examples of non-energy-related savings organizations can achieve, too. For instance, when organizations switch to longer-lasting LED lighting, they cut the amount of time maintenance teams must spend replacing burnt-out bulbs.
In a 2012 study that was published in Energy Engineering, the publication from the Association of Energy Engineers, 63 business executives shared how energy efficiency measures impacted their organizations. Of these, 71 per cent reported savings related to labor on maintenance, 63 per cent cited avoided procurement as a perk and 44 per cent said their efficiency measures had a positive public relations impact.
Energy efficiency also can help manufacturers eliminate redundancies, extend the life of equipment, cut corporate risks and give companies more money to invest back in the business. That, in turn, can allow for business expansion or lower costs, both of which can facilitate corporate growth and competitiveness.
All told, the ACEEE report referenced above concluded that when companies add non-energy benefits to their payback calculations on energy efficiency investments, the time to recoup costs on those investments drop by half.
Energy efficiency should be seen as a windfall, not just an added expense. But, where do you start?
Well, you start by knowing where your energy use is now. While you can’t see where those supersonic electrons whipping around in your business machinery, the Bruce Power Saver can help you see where they’ve been. Our affordable energy management platform gives you a comprehensive view of your company’s electricity use and performance.
For simple ways to get started with energy management, download our new eBook.