Smart Hotels: Tips to Generate Energy Savings

Over the past decade, Octus Energy and our energy efficiency development arm, Quantum Energy, have developed energy-savings projects for more than 100 hotel properties. Why are hotels prime candidates for energy conservation? Energy Efficiency Guide for Colorado Businesses paints the picture:

Guests affect heating and cooling loads in their rooms, consume hot water, and increase energy use in dining facilities. Hotels and motels tend to have quite high hot water heating loads - about 33% of the total - because of showers, laundries, and food service. HVAC loads constitute another 30%, lighting 20%, and plug loads 17%.

Here's a recap of a recently-completed Quantum project, this one for a 361-room national chain hotel for whom we secured generous utility company rebates and designed and implemented two energy-savings solutions:

• An energy-efficient laundry system that reduced water heating costs by 70% and water costs by 30%, generating annual savings of $28,000 with a nine-month payback.
• Retrofit of inefficient incandescent lighting with LED lighting systems that reduced energy use by 85% and extended individual lamp life by 40,000 hours, generating annual savings of $49,000, a one-year payback, and significant reduction in lighting maintenance.

Total payback: Less than one year, with savings cash-flowing thereafter.

Of course, there are myriad moving parts in a hotel, and thus multiple opportunities to generate savings. Colorado's energy efficiency guide amplifies more than two-dozen ways hotels can cut energy use. Read on and reap the savings.

New Math: The 80% Energy Efficiency Opportunity

Our mission at Octus Energy is straightforward: to significantly reduce energy expenses and increase cash flow for building owners, managers and occupants. When we do this, we generate a triple bottom-line return for our clients (aka, the Octus 3 Ps):

Profit: Energy costs are reduced immediately and perpetually; NOI, building values, occupancy, and lease rates are bolstered.
People: As building environments improve, employee, occupant and customer morale, satisfaction and productivity increase.
Planet: Significant reductions in the carbon impact of facilities.

And, we holster a few metrics to our mission: Commercial buildings in the U.S. spend an estimated $100 billion annually for electricity, solely for lighting and cooling. With in-the-market solutions, energy costs can be cut in half: $50 billion per year. And, we are not seeking to create a new market, but rather serve an existing market.

A recent study, portrayed by our comrades at The Building Advisor, blows our metrics through the roof. “Up to 80 percent of commercial building energy is going up in smoke,” said F. Noel Perry, founder of Next 10.

Next 10 has issued a new study, “Untapped Potential of Commercial Buildings: Energy Use and Emissions,” which suggests that energy use by commercial buildings could be reduced by up to 80 percent through energy efficiency measures, based on national averages. The full report is available here.

The San Francisco Chronicle’s blog, The Thin Green Line, chimes in:

“Indeed, an average building’s energy use can be cut by half just with low-cost, low-tech improvements to lighting and insulation.”

Next10's study points out that behavioral changes, or tenant use (adjusting lighting schedule, etc.) in commercial buildings can provide energy savings at very low costs. The Building Advisor: "It’s real, folks: there are cash saving things you can do for your building that don’t cost anything."

Piling on, GreenerBuildings: While there is an emphasis on energy efficiency in new construction, it is actually existing building stock that represents the biggest potential for energy reduction, yet remains largely unaddressed by state legislation.

Energy Efficiency Investments Remain Strong

We chime often about the outstanding virtues of investing in energy efficiency: The ability to slash energy costs, increase property values, bolster occupancy and lease rates, improve workspace environments, and reduce carbon impacts. Add to this the return-on-investment generated by investing in energy efficiency improvements -- typically in the 30-to-50% range, oftentimes higher -- and it's no surprise that such investments are mushrooming.

A global survey of 2,882 companies (the Energy Efficiency Indicator) released by Johnson Controls last week validates and amplifies the emerging opportunity. "These survey results indicate the growing importance on having energy efficient buildings that are cost effective and sustainable," said Dave Myers, president, Building Efficiency, Johnson Controls. A few snippets:

• Energy price increases: More than two-thirds of companies surveyed expect energy prices to rise, and many have made or are considering efforts to cut operational costs with energy efficiency retrofits.
• Illuminating savings: Among companies that have conducted energy efficiency retrofits, 73% modified their lighting, 64% trained building superintendents to be more energy efficient, and about one-third made larger investments, including replacement of HVAC units and installing efficient glass.
• Money, money: The biggest factor in energy efficiency investment for these companies is that the investment pay for itself -- quickly -- within three years.
• Making it happen: Sixty-three percent of companies surveyed plan to make capital investments in energy efficiency and 70% plan operating budget expenditures in efficiency programs over the next 12 months. And, 85% plan to make efficiency a priority in their new construction and retrofit projects.

"Despite the recession, decision-makers have put efficiency high on their agendas for 2010, especially those in India and China," said Clay Nesler, vice president, Global Energy and Sustainability, Johnson Controls. "It's encouraging to see that the financial returns and environmental benefits of energy efficiency investments are recognized in all regions around the world."