Budgeting for Benchmarking and Beyond
Energy Efficiency Costs
Maintaining the Energy Efficiency of your buildings can appear costly when you’re not planning ahead. There’s the yearly Benchmark filing followed by the 5-10 year Audit and RetroCommissioning (RCx) reports and finally the upgrades and projects you need to complete based on the results of your Audits and RCx. While it’s relatively easy to account for the annual filings, the Audit and RCxs can sneak up on you. In the worst-case scenario, one of your building’s operational systems breaks and needs to be repaired or upgraded immediately. If you haven’t set aside the necessary funds, you’ll most likely find yourself in a pinch.
“All the things I could do if I had a little money…” – ABBA
One of the easiest, and best, ways to begin budgeting for your Energy needs is to include it in your Capital Expenditures (CapEx). According to Investopedia, capital expenditures are important for two key reasons:
• The funds help to maintain a building and its equipment
• Allows you to “invest in new technology and other assets for growth”
As a reminder, Benchmarking and Audits/RCxs quite literally track your buildings’ Energy consumptions and needs to be upgraded. By this logic, Benchmarking and Audits/RCxs are investments in a building’s maintenance and growth.
There are a few things to consider when setting up your capital expenditures year-to-year. Firstly, your capital expenditures are not to be confused with your operating expenses. The capital expenditures pertain to expenses that do not occur on a regular basis – such as building upgrades. Conversely, operating expenses deal with your regular or frequent expenses – think utility bills and rent. It’s important to keep your capital and operational expenditures separate so as to avoid confusion or issues.
Based on your yearly Benchmark reports, you will see your Energy Score increase, stay the same, or drop. If your building’s Energy Score begins to drop, that’s a good indication to start prepping your CapEx as there’s a high chance that your building’s operations need to be upgraded. Many Audit/RCx deadlines for city and state ordinances fall around the end of the year, so conducting your Audit and planning your capital expenditures go hand-in-hand.
An Audit/RCx conducted by a licensed professional (LP) is the best way to pinpoint the exact cause for your decreased Energy Score. The finalized Audit/RCx report will provide you with areas for improvement and projected costs for those projects that will save you money and energy in the long run. Potential areas of improvement include, but are not limited to, your building’s HVAC, Lighting, Automation, and Solar systems. Based on these findings, your company will be able to implement a minimum and maximum budget to encompass immediate and maintenance expenses. Investopedia states that common capital expenditure plans are “constructed to over a period of five to 10 years” thus serving as “a company’s ‘five-year plan’ or long-term goals.” As Audits and RCx are only conducted every 5-10 years, it is pertinent that you’re including the head of daily operations in CapEx discussions for your building as they are the most knowledgeable on building issues and repairs. By consulting an LP and your head of daily operations will ensure that the appropriate funds are allocated for your capital expenditures.
Surviving the Summer HeatSummer heat is in full swing and rising, but that doesn’t mean your energy bills have to increase. There are still many ways to stay cool without racking up the costs. Monitoring your AC and fans’ usage is one of the simplest ways to be energy efficient. I’ve said it before, and I’ll say it again if you have a smart thermostat make use of it. The Department of Energy found that setting your thermostat 7-10 degrees lower than the outdoor temperature can save up to 10% on AC expenses each year. With that in mind, set your thermostat to kick in when it reaches a certain temperature – for example, 78 degrees – and be sure to turn this feature off when no one’s home to ensure energy is not being wasted cooling an empty home. Keep in mind that the lower the temperature setting, the lower the settings so if you’re at 72 degrees, then you’ll only be saving up to 3% on AC expenses. You also want to be sure that your AC vents are regularly cleaned and dust-free to ensure optimal airflow. If the AC vents are dusty, it’s going to block the cool air trying to get out and you’ll find yourself trying to lower the temperature more and more to feel the effects. The lower the setting, the more your AC is going to have to work and the higher your energy bills. According to the Department of Energy, 90% of the energy from incandescent lights is actually just the heat with the remaining 10% being actual light. Crazy right? Needless to say, if you’re using incandescent lighting, you might want to keep those off and use natural lighting while the sun’s out unless you want to raise the room’s temperature. A better option would be to switch to LED lighting as they generally give off low amounts of heat. There’s the added bonus that in comparison to incandescent lighting, LEDs use significantly less energy and last significantly longer – 75% less and 25 times longer respectively. Switching to LED will ensure no additional heat is being generated while helping you save money. It’s a win-win.
Moving Past COVID
Many cities have begun to reopen and resume normal operations thus resulting in the reinforcement of Energy ordinances and programs*. As many cities and states start to reinstate their original, pre-pandemic Benchmark and Audit/RCx deadlines, it is important to note that there will also be less leniency. That means, deadlines will be enforced and penalties will be distributed as cities and states see fit. Vert Energy Group has continued to work through these unprecedented times to ensure we’re staying up-to-date with any and all changes made to the various nationwide Energy ordinances. If you’re finding yourself in the position to begin filing again, we’re here for you. Head over to VertPro.com to begin meeting your Benchmark, Audit, and RCx, and/or building upgrade needs. If you’re unsure if your city or state has reinstated your local Energy programs, our support team can help you via email at firstname.lastname@example.org and by phone at 800-585-2690.
*Please note at the time of drafting this section things were beginning to open up. Check with your city’s or state’s guidelines for the most up-to-date information.
Danielle’s CornerBack-to-School Season… August marks back-to-school season! Hopefully the activities I shared in our June and July Vert Report helped keep your little ones occupied all summer long. Now I’m here to help you face the back-to-school shopping nightmare. When I was a struggling college student, I used to hit up my local malls to see what deals they had going on. Pre-COVID, the Irvine Spectrum in Irvine, CA used to handed out little booklets full of coupons to use at participating stores and restaurants and held summer night events in August. This provided a great way to stock up on back-to-school supplies and clothes while getting your grub on and attending fun events. The Irvine Spectrum has yet to announce any fun back-to-school event, but you can always do your own little celebration to make the process fun for your kiddos. Start your day off hitting the back-to-school sales and reward yourself and/or your family with a yummy meal out. And remember, shop for EnergySTAR certified electronics to ensure energy efficiency year-round. If you’re unsure if a product is EnergyStar certified simply look for the official logo or double-check the EnergySTAR website. If you spot any great back-to-school deals for EnergyStar products, share them with the Vert Energy Group community on our Facebook and LinkedIn or find us on Instagram. We’re all one big community, so let’s continue to help one another out!
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