Beginning in April, the City of Hoboken will purchase “100 percent clean, non-polluting renewable electricity” for municipal facilities, according to an anouncement from Mayor Ravi S. Bhalla. Besides being eco-friendly, the changeover is expected to be green in another way: delivering estimated savings of 9 percent during a two-year period.
That kind of cost-cutting resonates with business owners, who often struggle with energy expenses. For many small businesses, energy costs rank among the top three business expenses, according to a poll by the National Federation of Independent Business, an advocacy organization.
“Small business owners are not able to adjust the price of their goods and services quickly enough to match potentially steep energy cost increases without hurting their customer base,” warned the NFIB. “Plus, owners are not able to change business practices fast enough to offset the increases. For example, most owners cannot afford to buy new, more energy-efficient equipment if current equipment still has useful life. They are effectively caught in a squeeze that only time and/or good fortune will release.”
Flipping for energy savings
But the path to reducing energy costs may be as simple as flipping a switch, according to some local experts. “We basically promote efficiencies,” said Bob Leech, a founder and managing partner of NJ Green Energy Consulting (NJGEC), an energy management consulting firm. “The cheapest kilowatt hour is the one not used. If a company has a lot of cubicles or workstations, we may recommend the installation of sleeper switches, which after a certain period of inactivity will automatically shut off electricity to high-draw devices like computers.”
When Leech and his colleagues are called in for a consultation, “We’ll initially review the business’ 12-month energy usage and analyze it. Then we’ll visit the facility and speak with the CEO or other executives, like a facility manager, to identify energy cost-saving opportunities.“
Sometimes, the solution may involve a supply-side strategy, like changing providers. Hoboken Mayor Bhalla, for example, noted that the city will save about one cent per kWh by switching from PSE&G’s renewable energy sources to a third-party supplier, Aggressive Energy LLC.
AB Energy USA LLC, the U.S. division of Italy’s AB Holding SpA, builds and operates cogeneration plants that use natural gas, biogas or landfill gas as fuel for a piston-driven engine coupled to an alternator to generate electricity. Exhaust gases and other waste heat — and on some cases, carbon dioxide — can then be recovered and reused as part of the power cycle.
“We have two 1.9 MW plants in Camden — producing enough electricity to power about 3,200 homes each year — that serve the municipality,” according to John Walker, an AB sales engineer. “They generate electricity from the biogas produced at a wastewater treatment facility and recover the heat to be used in the process of the biogas digestion.”
Another unit was installed at Aria Jefferson Hospital in Torresdale, Pa. “In this case they installed a cogen unit to produce the baseload of 1.2MW of power and then recover the heat in the form of hot water,” Walker added.
Generally, CHP [combined heat and power] applications have several measurable benefits to the customer,” added AB Business Developer Maria Farris. “This includes savings on electricity bills, federal, state, and utility incentives, tax credits, and grants. On top of this, there is a great benefit to many customers in the form of availability during major weather events, grid failures, and improved resiliency that can’t be monetized but allows them to maintain the production cycle and continue to provide crucial services.”
When energy consumers have more options, they come out ahead.
Other easy solutions may also be available. “After we analyze a client’s situation, we present a report and suggest customized supply side and delivery side strategies,” said Leech. “Some can be simple yet effective, like programmable thermostats that will reduce the facility’s temperature when it’s not in use, say from 5:00 p.m. to 6:00 a.m.; or motion sensors in restrooms and other areas that will shut lights when there’s no one around. Retail stores, for example,can use sensors to dim the lights in an empty aisle.”
Following one recent energy audit, NJGEC advised an educational institution in central New Jersey to replace its existing fluorescent lighting with LED fixtures. “The estimated cost of the retrofit was about $340,000,” said Leech. “But state incentives brought the school’s out-of-pocket costs down to about $102,000.”
Under the Clean Energy Program administered by the state Board of Public Utilities, New Jersey residents, business owners and local governments may be eligible for a variety of energy saving financial incentives, programs and services, he added. “When companies discover the return on investment they may be able to achieve, they’re often pretty happy.”
Some good opportunities
New Jersey’s deregulated energy market has created some good savings opportunities for businesses, according to Robert Chilton, executive vice president at Gabel Associates Inc., an energy, environmental and public utility consulting firm
“The charges shown on utility bills are comprised of two main categories: delivery charges from the local utility for bringing energy to your facility and supply charges for the energy commodity,” he said. “While there is no choice for delivery service in a given service territory other than the local utility, all customers have what is referred to as ‘retail choice,’ meaning they have the option to seek the purchase of energy supply from competing third party suppliers. Third-party suppliers, who are licensed by the NJBPU, can often provide energy supply savings compared to the utility supply rates.”
Thanks to federal incentives like the Investment Tax Credit, a business or its vendor can reduce the net cost of solar energy installed at business locations, Chilton noted. “With the combination of market incentives, tax credits and the ability to ‘net meter’ provided under state rules, generating renewable electricity ‘behind-the-meter’ at your facility is often cheaper and more efficient than purchasing it from the utility,” he said.
The continued development of the EV industry and penetration of EVs in increasingly larger numbers into public transportation, corporate fleets, and personal use can lead to significant operating cost reductions, reductions in air emissions, and improvements in the overall electric usage profile on the power grid, which can benefit all energy users.
– Robert Chilton, executive vice president at Gabel Associates Inc.
Gabel Associates worked with a small New Jersey business that owned a facility and rented some of the extra space to other companies, he added. “They were not confident in the economic analysis provided by the solar vendor they were working with to provide a turnkey solar project on the facility’s roof. Gabel Associates was able to perform an economic analysis of the project based on current market conditions and their specific cost of electricity. Through this analysis the business owner was able to confidently agree to a project with an expected payback of five to six years, and a 20 to 25 year project life.”
Chilton is also excited about new initiatives, like electric vehicles and the associated infrastructure, “notably the build-out of widely accessible charging stations.” He said these kinds of developments are vital to the state’s energy and emissions goals.
“The continued development of the EV industry and penetration of EVs in increasingly larger numbers into public transportation, corporate fleets, and personal use can lead to significant operating cost reductions, reductions in air emissions, and improvements in the overall electric usage profile on the power grid, which can benefit all energy users,” he noted. “Additionally, community solar initiatives to deliver locally sourced renewable energy at an affordable rate to low and moderate income households, as well as local businesses, are coming to fruition. This represents an exciting opportunity for New Jersey residents and businesses alike to contribute to the state’s renewable energy goals while saving on their energy bill.”