Expense management is one of the main concerns for owners attempting a return to the office post COVID-19. Utilities are among the largest controllable expenses for business owners and the forced shut down has pushed the Canadian CRE industry to reexamine energy efficiency. Commercial operators have begun to analyze energy usage before, during, and after the lockdown to compare spending trends and develop conscious energy strategies.
Achieving greater savings
Yardi estimates that roughly $2M is spent on utilities annually for every 1M square feet of a portfolio. That number represents approximately between 20-25% of all controllable expenses. Even an incremental improvement in consumption can lead to drastic savings across an entire portfolio.
What do the top energy managers do to achieve greater savings? First, they identify energy users that aren’t necessary when buildings are unoccupied and turn these off. Regardless of the pandemic, commercial buildings are typically closed 50% of the time or more, due to nights, weekends, and holidays. Emergency lights, data systems, refrigeration, and HVAC all run even when the building is unoccupied or minimally occupied. Though these loads cannot be completely shut off, they can be controlled. In addition, as another simple measure, staff may be directed to shut off or unplug equipment that will not be used over a weekend such as copiers, vending machines, coffee pots, personal items in cubicles, and stairway lights.
As the industry experiences sustained shutdowns and are reconfiguring staff in the work space, implementing energy audits to find these “vampire loads” is important. Conducting these “treasure hunts” is also a recommendation of ENERGY STAR.
Energy managers look to the automating of utility invoice processing as another way to realize savings. Processing utility bills is not as simple as writing a cheque for every invoice. You might have to track down missing bills, contact utility providers to resolve billing errors or manually enter data. Through automation and services, you can save time and money and gain accuracy with an online approval workflow, timely payments, and validation of charges, consumption, and rates for accuracy.
Leveraging real-time energy data
The timing of your data is just as important as the amount of data collected. Monitoring your building’s consumption in real-time allows you to address issues as they occur (or before they occur) and will help you save money, optimize your system performance, and improve tenant comfort. Real-time data allows you to measure the specific impact of improvements and use those metrics to create long-term energy goals and projections.
Energy information systems (EIS) are affordable web-based tools, data acquisition hardware, and communication systems used to store, analyze, and display building energy data. A team of facility managers, engineers, and even accountants can use this data to make energy strategy decisions. An EIS makes baseline comparisons using advanced modeling to predict how much energy any load should consume, based on numerous interior and exterior factors. Comparing your consumption data to these baselines will allow for notable cost control measures.
Tech advances allow you to now proactively detect HVAC faults and determine severity to prevent potential problems before they arise. You can compare real-time building demand and performance against baselines based on weather and other factors. Data is now detailed and thorough enough to allow for in-depth cost and consumption trends analysis.
The increased use and integration of artificial intelligence and the IoT is driving smart data. Utility meters, thermostats, automated lighting, occupancy sensors, and many other interconnected devices have greatly improved the timing and accuracy of energy data. As we move forward with a return to the workplace, the use of AI will transform space for social distancing, maximize comfort in conference rooms with automated cooling or heating, and adapt energy expenses to new office hours.
Garnering greater benefits
Like every other aspect of your business, establishing a clear strategic direction and associated goals will result in greater cost savings and increased efficiencies. Conducting energy audits, identifying vampire loads, seeking real-time data and benchmarking, fault detection, and the increased use of artificial intelligence and IoT are tangible ways in which you can advance your company’s energy management goals. Leveraging and integrating all these tools and resources can save time and garner significant impact on multiple fronts:
* Lower operating costs – Gain visibility into real-time demand and consumption across a portfolio to increase savings on utilities and maintenance.
* Raise property value – Efficient buildings have higher rental rates and market value.
* Greater financial efficiency – Automating utility invoicing can reduce or eliminate late fees, human error on missed or duplicated payments, and risk of shutoff.
* Improved tenant experience – Efficient buildings lead to increased tenant comfort and fewer complaints, which is particularly relevant at a time when your tenants are transitioning into a new work environment.
* Higher investor expectations – An energy efficient portfolio can help investors meet Environmental, Social, and Governance (ESG) requirements and yield higher returns.
Though energy strategies focus on expense reduction, the advantages of leveraging technology and services reap benefits that address both the bottom line and stakeholder satisfaction. At a time where we are navigating through the uncertainty of the pandemic and the evolving work environment, systems will continue to learn and predict with more efficiency and we can leverage these insights and adjust to data for a more sustainable and efficient future.
Yardi Pulse is a connected platform that helps manage energy intelligence and automate energy equipment to lower costs, reduce consumption, and improve efficiency. Yardi® develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. For more information on how Yardi is Energized for Tomorrow, visit yardi.com.