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3 Ways Small Businesses Can Save Big with Energy Efficiency Upgrades

Energy efficiency improvements can help small businesses save energy and money, while creating a more comfortable place for customers and employees. It also contributes to a more sustainable community and world. Fortunately, there are several types of energy efficiency upgrades that are ideal for small businesses. They’re affordable, relatively simple to plan and install, and can quickly provide recovery of the upfront investment.

Utility Companies May Assist with Generous Incentives

Businesses that seek out commercial energy efficiency programs often don’t need to rely on energy savings alone to recoup project costs. Motivated by their own sustainability goals, long-term costs of generation assets and carbon reduction goals, many electric utility companies provide energy efficiency incentives to help kick-start business energy efficiency projects. These incentives often pay for a substantial portion of new equipment purchases and installation costs. For example, Ameren Missouri’s BizSavers® program offers incentives for businesses in a wide range of industries for installation of energy-efficient lighting, HVAC, refrigeration, water heating, motors and other types of equipment.

Option 1: Get Going with Upgrades To LED Lighting

Approximately one-quarter of a typical commercial facility’s energy usage comes from lighting. Whether a small business uses incandescent bulbs or conventional fluorescent tubes, significant energy and cost savings are possible with a switch to LED tube lamps. The performance of LED tube lamps is remarkable. New LED tubes use less than half the energy of the average T8 fluorescent tube, which literally cuts lighting costs in half. Using electric rates in Ameren Missouri’s service territory as an example, simple LED replacements for fluorescent lamps may pay for themselves in energy savings in as little as 1.5 years.

Businesses can also save on LED tube replacement costs; new LED tubes can last more than 50,000 hours, while standard T8 fluorescent lamps typically have a lifespan of about 24,000 hours.

On some upgrade projects, LED tubes can simply be installed in place of conventional fluorescent tubes. In others, older fixtures may also need to be replaced, and this can double the cost of a project. However, utility companies offering LED lighting incentives sometimes provide workarounds to help small businesses make complete upgrades.

Option 2: HVAC Upgrades Can Cut HVAC Energy Consumption by 30% to 50%

Another energy efficiency upgrade that can help small businesses achieve significant energy cost savings is installing higher-efficiency HVAC (Heating, Ventilation and Air Conditioning) systems. Heating and cooling systems account for as much as 40% of the average commercial building’s electricity consumption, and high-efficiency HVAC equipment can cut that amount by 30% to 50%.

Because HVAC systems use large amounts of energy, often during periods of peak demand, many electric utility companies offer incentives for customers to purchase higher efficiency models when replacing HVAC equipment. Ameren Missouri HVAC incentives, for example, can cover a substantial portion of the incremental upgrade cost from standard efficiency replacement equipment to higher efficiency replacement models of packaged DX units, heat pumps and chillers.

Maintenance costs for older HVAC systems are also part of the equation. While HVAC systems typically last 15 to 20 years, aging equipment often requires more frequent and more costly repairs. Sourcing replacement parts and qualified service personnel becomes increasingly difficult. Some older systems may still rely on refrigerants like R-22 that have been phased out of production because of environmental concerns. And along with these maintenance issues, the already-inferior energy efficiency of aging systems decreases even more over time.

Taken together, the combination of incentives, energy savings and avoiding maintenance costs can make a compelling case for more energy-efficient HVAC equipment. Past participants in Ameren Missouri’s BizSavers Program that installed HVAC energy-efficient upgrades earned an average of $22,000 in incentives per project and saved an average of 163,000 kWh ($13,855 at a typical 8.5 cents per kWh rate).

Option 3: Save 10% to 50% in Energy Costs with Variable-Frequency Drives for Electric Motors

Conventional electric motors used to drive pumps and fans present opportunities for energy savings that many small businesses are unaware of. Electric motors have a very important similarity to gasoline-powered automobile engines: they’re much more energy-efficient at lower operating speeds. But in many older commercial building systems for water pumping and air distribution, they’re run at higher, fixed, less efficient speeds while mechanical valves and dampers control flow.

Many utility companies offer incentives for electronic devices called variable frequency drives (VFDs) that solve the efficiency problem. They supply conditioned electric power to run motors at the lowest speed required for a given task, reducing daily operating costs and wear and tear.

Get Going with an Energy Efficiency Upgrade That’s Right for Your Business and Your Budget

There are more ways for small businesses to achieve cost savings through energy efficiency upgrades, including solutions for water heating, commercial cooking, refrigeration and more. With an energy efficiency upgrade, businesses get the flexibility to reinvest the savings in their business operations or in additional energy efficiency projects.

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