Energy efficiency is the biggest renewable energy market that we will see in the coming decade.
It is staggering to learn that the U.S. could save 50% of the energy consumed today by most commercial buildings. What is that worth? Staggering numbers show that about 100 Million dollars per year of energy are wasted, resulting in a direct reduction of fossil fuel use.
However, a simple method of selling saved energy (a negative watt) to the utility company could turn this whole scenario around. If a building uses less energy, the utility company can sell it to someone else. Saved energy frees up capacity to sell it elsewhere. This is why the demand for energy analytics is so critical in today’s world. Make sense?
The model outlined in this graphic shows how simple this is. Let’s explain it to a building owner: “Mr. Building Owner: We would like to invest in your building to reduce its energy consumption, but we will not reduce your power bill. Instead, we will pay you rent for all the equipment and facility improvements we put into your building.”
The building owner or landlord would reply, “How can this work? You invest and put the latest state-of-the-art systems into my building and you don’t charge me for it? You will pay me for the privilege? My rent base goes up and hence my cap rate is enhanced and my building becomes more valuable–This is awesome! And you will make my building very efficient and a model building for my tenants? Where do I sign?”
Likely, the owner would follow up with a question: “So, how do you make money?”
We reply, “It’s easy. We sell the energy savings back to the utility company, who can then sell it elsewhere. In effect, we have put a mini power plant in your building and the utility company will pay us for that power. It also happens to be always on at exactly the time of day when the energy is needed the most, so it is incredibly valuable.”
“We also guarantee the power savings and use a special monitor (DeltaMeter) to track and record the savings over time.”
The building owner replies, “This is fantastic!”
This is the future of energy efficiency—a market which will take off in the coming years.