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5 Tips for Improving Energy Efficiency Amid Rising Electricity Costs

It’s not just you: electricity costs are rising nationwide. Wholesale rates in New England and New York are up a staggering 96% and 124%, respectively, compared to 2021. And with natural gas prices continuing to climb as global demand surges but inventories remain low, relief on utility bills may still be a way off. 

With experts now predicting a recession in 2023, managing operating costs (and, by extension, energy consumption) will be a key strategy for real estate organizations heading into the new year. In addition to being a key component of decarbonization planning, energy efficiency is, at its core, a pragmatic money-saver that can provide needed cushion for the bottom line. And with the “green premium”/”brown discount” phenomenon already having an observable effect on asset valuations worldwide, strong energy performance can help owners stay competitive while guarding against a potentially challenging recessionary climate in 2023 and 2024. 

Here are five tips to improve energy efficiency across your portfolio, with an eye towards lowering utility spend, preserving asset values, and making progress towards energy and carbon targets. 

1. Prioritize Lighting Upgrades 

Lighting upgrades are popular with sustainability directors, and for good reason  – they’re almost universally applicable and have immediate energy and financial benefits. LEDs deliver average energy savings of 75% or more compared to conventional lighting, and their long lifespan helps reduce maintenance costs over time. 

If you’ve been considering lighting retrofits across your portfolio, now is a good time to act. Though there is upfront investment required (it will vary by building), costs have come down significantly, and the availability of utility-provided rebates and other funding mechanisms – in addition to the virtually immediate energy savings – keep payback periods short. Lighting projects are also NOI drivers: upgraded lighting can boost top-line asset values in addition to reducing bottom-line costs. Finally, they’re part of the broader decarbonization playbook: anyone eyeing a carbon target in 2030 or beyond should strongly consider lighting as part of the overall journey. 

Pro tip: A solution like Aquicore can help you measure and verify the ROI of lighting upgrades and other capital projects. Learn more here

Pro tip: Check the Database of State Incentives for Renewables & Efficiency (DSIRE) to find rebates and funding programs for lighting upgrades and other efficiency projects. 

2. Emphasize Operational Changes 

With energy costs rising, there’s no time like the present to make sure your operations are tight. Are BMS settings running as expected? Are you due for an energy audit? Engage your engineering and property teams to see if there are any “low-hanging fruit” adjustments or savings opportunities that can be applied at one or more buildings. All systems eventually experience operational drift, so as you review the performance of individual buildings, you will likely find opportunities to save energy – all of which add up over time.

Pro tip: Without proper monitoring, operational sequences can slowly drift over time, impacting consumption and demand. Aquicore applies analytics to your data to flag consumption anomalies and other performance issues, maximizing efficiency across your portfolio and helping you stay on track to hit your targets. 

3. Perform Routine Maintenance of Heating Systems

As the temperatures drop, be sure your engineering teams are scheduling cleaning and/or replacement of HVAC filters so that heating systems aren’t working harder than they need to be. Some filters can be cleaned and reused, but others must be replaced entirely, so your teams will need to verify each model’s maintenance requirements. Adding layers of insulation around your HVAC, heating and cooling pipes, and electrical outlets can also help maintain efficient energy levels and reduce energy waste. You can also consider cleaning the hot water coils of older units to increase efficiency. 

4. Review Holiday Occupancy and Scheduling Updates 

With the holidays approaching, make sure your property teams are reviewing projected occupancy with office closures in mind, and updating HVAC schedules accordingly to save energy. If there have been any tenant overtime HVAC requests, check to ensure that schedules have been returned to normal so you aren’t running up consumption on the weekends or after hours. Proactively check with tenants about the notoriously quiet week between Christmas and New Year’s Eve – if it turns out everyone will be on vacation and/or working from home, configure HVAC setbacks for added energy savings. 

5. Make a Plan to Get Your (Data) House in Order 

If energy, carbon, and/or costs are top of mind for your team, don’t fly blind in 2023. Access to high-quality energy data is the foundation of any real estate ESG program, and whether your goal is to manage spend, make progress towards net zero, stay abreast of regulatory changes and reporting requirements, or all of the above, you will need accurate, reliable energy data as a starting point. 

If you recently conducted an ESG gap analysis: review the data points and KPIs that might be missing. If you’re struggling with industrial, multi-family, or other triple-net assets: evaluate your options. If leases are renewing soon, can you add a green lease provision to get access to the utility data? If not, will your tenants be receptive to signing LOAs? Understand the available data capture approaches and find an experienced partner (like Aquicore) who can help you navigate the different scenarios across your portfolio. Starting the year off with a solid foundation of data (or a plan to acquire it) will set you up for success in 2023. 

Want more tips? Download, print and share our universal building efficiency checklist here!