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Reduce your Energy Project Payback Period by Combining Energy Conservation with On-Site Solar PV

Posted by Vital Group of Companies on Sep 25, 2018 8:32:00 AM
  • There are some very common mistakes organizations make when seeking to save money through energy initiatives. These can lead to lengthy or unrealizable payback periods for their investments
  • Maximised energy efficiency depends on two factors: the minimization of both electrical loads and natural gas needs
  • Implementing a strong energy and emission reduction plan means combining two approaches into one holistic strategy that tackles your major energy challenges together

The Energy Efficiency and Conservation Pitfalls Plaguing the Payback Calculation

What’s holding you back from an energy transformation? New energy technologies always sound promising, but the details can trip you up. For example, solar panels may allow companies to offset some of their electricity costs — but at today’s low electricity prices the payback on solar panels can usually stretch into the realm of 20 to 25 years (even with incentives). Getting a project with that kind of ROI delay approved can be a major hurdle.

It’s also not the whole story. Yes, you use electricity, and greening your source of electricity through solar is a good thing, but it’s only a part of your total energy usage. There’s also natural gas to consider — used for space heating and hot water. In Alberta, natural gas typically accounts for two thirds of total energy use. When it comes to natural gas use, the reality is, most building operations and business processes involve significant heat waste. Too much heat is being produced; or heat is escaping outside.

This results in money and energy being thrown away, or a wasted opportunity to recover and use excess heat. In particular, large buildings and certain commercial processes are sources of high energy use and heat waste — an issue that only gets costlier as the carbon tax increases.

Organizations often find themselves working on only one of these strategies (saving energy or producing renewable energy onsite) while ignoring the other. Even when they are tackling both, there’s the risk of inefficiency when implementing energy projects. If you don’t create your energy strategy carefully, you could get stuck with overbuilt, mismatched systems that don’t work efficiently together, nor allow for further economical reduction.

Visualize Your Energy Approach through the Energy Pyramid

The energy pyramid shows how energy conservation, energy efficiency, and renewable energy work together

This is a useful tool when grappling with your energy problems. Start with energy conservation: low and no cost measures that are easy to implement. Changing current behaviours can go a long way in reducing your energy usage.

When you’ve done what you can at this level, you move into energy efficiency — implementing energy reduction technologies to help minimize energy usage overall

Once you know exactly how efficient you can be, you can move towards producing renewable energy onsite. You won’t need as much from a renewable energy system as you would had you not worked on the lower tiers. 

Maximise Financial Return While Reducing Emissions with a Holistic Approach

VGOCEnergyEfficiency-2The key to getting your energy savings right is working up the pyramid.

There’s enormous savings potential with things such as LED lighting upgrades and approaches to heat recovery. They can have a relatively fast payback period.

There’s no point designing a solar PV system to handle your current electrical load if you intend to lower it. Look into an LED lighting retrofit, for instance, to reduce consumption by replacing wasteful and inefficient lighting methods. A heat recovery system can capture excess heat and reuse it to heat your buildings more effectively. Taking these steps before — or accounting for a lowered electrical load and less consumption of natural gas in parallel to — your renewable energy strategy, means you’re able to create a smarter renewable energy plan.

How to Reduce the Payback Period for Your Renewable Energy Project

The brilliance of combining solar along with your energy conservation and efficiency efforts is this: you’re able to get the benefits of renewable energy, such as solar, with a lower payback period because you can combine your projects. You could get your total payback period to something a lot more manageable — such as ten years.

Why not just do your energy conservation projects without the solar? Solar — and other renewable energy sources — have very little input and maintenance costs. With the installation costs behind you, as you move forward, you’ll be able to avoid fluctuating electricity costs. And of course, you’re further reducing greenhouse gas emissions; an important goal for many organizations.

How Do You Achieve This Harmonious Energy Approach?

A typical solar PV company installs solar panels but won’t be able to help with heat recovery or an LED upgrades. An energy efficiency company can get today’s energy usage under control, but there’s an upper limit on energy savings and emission reductions. Maximising your cost savings by engaging with multiple energy service vendors is an impossibility.

But with Vital Group of Companies, you’ve got experts capable of handling all steps of this integrated energy strategy. Through 3D Energy, we’ll identify opportunities to reduce your energy consumption that are integrated with a solar installation from Generate Energy. Vital Engineering can provide experience in sustainable design, engineering, and project management support for implementing efficiencies to your mechanical and electrical building systems.

We’re able to produce one cohesive, holistic plan and take you from conception to execution. We understand just how important a complete approach to energy is. Use less energy. Produce more sustainability. Realize your benefits that much faster. Reach out today to get started.

Energy Efficiency Alberta has several funding opportunities to assist in reducing your energy consumption.

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