Environmental sustainability is having a moment. It’s hard to find an aisle at Home Depot or Target that isn’t packed with products that claim to have environmentally sound ingredients, energy-saving technology or more responsible sourcing. And every day, the ranks of green products grow: light bulbs promising a lower environmental impact, low-emission paints, recycled insulation that claims to help the environment, and more.
On the surface, the green product business seems to be a great idea, at least in terms of branding. Granted, compact fluorescent (CFL) or LED light bulbs cost more than incandescents and green paint costs more than the standard formula, but there’s a lot to be said for being able to claim a sustainable office or an organically sourced, fair-trade product line.
But beyond the branding opportunities, what's the benefit to business owners of going green? To put it another way, can a company improve its bottom line while helping to save the environment?
Dollars and Sense
The simple answer is yes. In the push for going green, a critical element that often gets lost is that remodeling and retrofitting isn’t just good for branding; in many circumstances, it can also be great for your bottom line. Better insulation, after all, translates into lower heating and cooling bills, and energy-efficient lighting can slash utility expenditures. A more energy-efficient air conditioning system can keep your office cooler, help employees be more productive and push electric bills down.
A key question, of course, is how long it takes to pay off a green retrofit. In other words, how long is it between installation and profitability? This is a huge consideration: After all, an energy-saving fixture or appliance that takes 10 years to pay itself off but only has 15 years before it needs to be replaced is a far-from-ideal option. On the bright side, many utilities and government agencies offer grants and other incentives that can slash the upfront cost of a green retrofit—and speed up the payback on your green push.
With your bottom line in mind, let’s look at the green options that are on the table and the ways your company can start cutting its bills and improving its public profile all at the same time.
Shining a Light on the Matter
When it comes to cutting your monthly electric bill, lighting is the logical place to start. According to the U.S. Energy Information Administration, lighting counts for 21 percent of all commercial energy usage. What’s more, it’s also one of the easiest, and least expensive, ways to improve an office environment.
When you're considering a change in lighting, it’s natural to reach for a new lighting fixture or a more efficient light bulb, but Chris Garvin, senior associate at architectural firm COOKFOX Architects, notes that there's an even simpler and less expensive way to cut down on lighting expenses.
“People often overlook the fact that sometimes, there are just too many light fixtures in a space,” Garvin explains. “If there are 20 fixtures in a room and you really only need 12, if you just take the bulbs out of eight of them, you can cut your lighting expenditures by 40 percent.” Taking the bulbs out may not be your most attractive option—fixtures with missing bulbs certainly don't add style to the office decor—but depending on your office design, it might be possible to simply cover them with ceiling tiles.
For the remaining lights, changing bulbs or fixtures can have a huge effect. Over the past few years, the massive push to replace incandescent lights with CFLs has highlighted the fact that the twisty little bulbs last more than eight times longer than traditional light bulbs and use less than a quarter of the electricity. This can have a big impact on your savings: Eartheasy estimates that, over the course of 50,000 hours of use, incandescents cost about four times as much as CFLs.
The next generation in lighting is compact LED lights, which use about 40 percent less electricity than CFLs and last five times as long. Unfortunately, LEDs are still the most expensive option on the market, but their prices are dropping as their popularity goes up. Currently, replacement LED bulbs designed for a 60-watt incandescent socket cost $10 at Home Depot, roughly a quarter of what they cost just a few years ago.
Put into context, over the course of 10 years of use, an incandescent light will use $300 worth of electricity and will need to be replaced 42 times. By comparison, a CFL will use $70 worth of electricity and will need to be replaced just five times. And an LED bulb will use $50 worth of electricity and won't need to be replaced at all during that 10-year span.
Lighting the Way
For many companies, however, changing their lighting is a bit more complicated than simply switching out the light bulbs. Most offices are equipped with old-fashioned fluorescent lights, which are more energy-efficient than incandescents but less energy-efficient than LEDs. Old fluorescents also tend to flicker, and often produce a cold, unpleasant light. In addition, their bulbs can be expensive and difficult to replace.
This was the case with Manhattan Fruitier, a purveyor of gourmet food baskets. When the company moved from a 3,000-square-foot production facility in Manhattan to a 15,000-square-foot facility in nearby Long Island City, the owners were faced with outdated lighting … and an electricity bill that, they expected, would rise sharply.
“The fixtures were old fluorescent lights that wasted energy and tended to flicker,” recalls Manhattan Fruitier owner Jehv Gold, who owns the company with his wife, Lauren Westbrook. “We wanted something warmer, which wouldn’t flicker, and which would be more energy-efficient.” After some research, Gold decided to install new T-8 fluorescent fixtures with Energy Smart ballasts. More efficient than the facility's old lighting, the new bulbs were also better ballasted, which meant they would provide more consistent, attractive light.
Unfortunately, switching out all the company's lighting was a daunting task. To replace everything, Manhattan Fruitier would need 150 fixtures, which cost $126.58 apiece, for a grand total of $18,987. Because the company was switching to more energy-efficient lighting, however, it qualified for a rebate from the New York State Energy Research and Development Authority (NYSERDA). The rebate, which shaved $30 off the cost of each fixture, netted Manhattan Fruitier a total of $4,500 and made it possible for the company to purchase the new fixtures.
In addition to NYSERDA, numerous other electrical utilities provide rebates or other incentives to help businesses switch out their lighting. Con Edison, for example, provides incentives for each LED light, strip light and low-energy exit light that a company installs. The federal government has incentives of its own, as do state and local governments. DSIRE, the Database of State Incentives for Renewables & Efficiency, is a regularly updated listing of loans, grants and rebates that are available nationwide.
Good Morning, Sunshine
Another way to cut electrical bills is by taking advantage of a free, limitless lighting resource that’s available to most businesses: the sun. Garvin notes that, in addition to lowering lighting costs, sunlight also improves the feel of an office and, he argues, the morale of workers. “Daylight gives employees a connection to the changing weather and the patterns of the day and reinforces their circadian rhythms,” he explains. “It’s also healthier for their eyes: There’s less eyestrain when there’s daylight in a room, compared to when it’s 100 percent artificial light.”
Josephine Zurica is a principal at Dagher Engineering, a New York City-based firm. When her company decided to renovate, it made natural light a major part of the design. In addition to cutting lighting costs, Zurica notes that it's had a major effect on employee morale. “Natural light provides a better feeling,” she says. “It gives our employees the feeling that they’re not just stuck in a cubicle somewhere.”
On the other hand, daylight is difficult to control; it can create glare, overwhelm a space and distract workers. In the winter, glass tends to be a poor insulator, which can drive up heating costs; during the summer, solar gain—the heat that comes from sunlight—can make it hard to keep an office cool, even with an air conditioner.
Luckily, there are effective, and inexpensive, ways to tame the sun. Garvin notes that window film and window treatments, especially on south-facing rooms, can mitigate the effects of sharp sunlight, making it easier to use daylight in an office room—and easier to turn off the electric lights. Incentives for these options are limited, however: “You’re not going to get an incentive for putting a blind on your window,” Garvin explains. That said, many utilities do offer grants and rebates to help pay for window films.
Automating the Changes
The biggest problem with using natural light to illuminate your business is that sunlight is inconsistent, waxing and waning depending on the weather and the time of day. And while window blinds and films can help tame harsh sunlight, they can't do much to balance and control the natural and artificial light in a work space. That's where daylight sensors come in—they can help you maintain a balanced, consistent light in whatever room you need.
“Daylight sensors can dim down or turn off your electric lights when there's sunlight in the space,” Garvin explains. “They have an initial cost, but many states have energy efficiency programs that can help you cut those costs.”
Another type of sensor that can help you slash energy costs is the basic occupancy sensor, which has been in use for decades. These lighting controls, which turn on lights when someone enters a room and turn them off when he or she leaves, can reduce lighting costs by between 22 and 55 percent, depending on how often a room is used. Depending on the features they include, occupancy sensors range in price from less than $20 each to just around $140 apiece.
Another way to help reduce electric bills is by cutting “vampire load,” the constant drain on electricity that's caused by computers, printers and other office machines that remain plugged in, drawing electricity even when they’re not in use. Some machines, like computers, can be put on sleep mode, which reduces their power drain, but this isn’t the best solution. For that, Garvin suggests “plug load management,” a process by which a business uses timers to control its electrical usage. One such timer, ThinkEco’s Modlet, not only puts office machines on a timer, but it can be controlled and monitored through a computer.
“It can end up [creating] a 40 percent reduction in an appliance’s energy consumption, because it’s turned off 40 percent of the time,” Garvin notes. The startup costs for a Modlet system are fairly low, roughly $50 per outlet, and many utilities offer incentives to help business owners cut the initial expense.
Pulling Out the Big Guns
For companies looking to improve their energy efficiency and cut their utility bills, updating and improving existing electrical and lighting systems is a no-brainer. Relatively inexpensive, the changes offer a major payoff with a minimum of difficulty. Beyond that, however, the green retrofit equation becomes a little murkier.
One big problem is that companies that rent their spaces are stuck with what Garvin calls “the split incentive.” “A business owner renting a space typically doesn’t own the air conditioning unit but has to pay the electrical bill,” he explains. “The landlord, on the other hand, owns the air conditioning unit but doesn’t have to pay the bills.” This imbalance between the building owner and the person stuck paying the bills means that, in many circumstances, it really isn’t in the best interests of either the tenant or the building owner to improve a building’s systems.
Some organizations, like the Natural Resources Defense Council, are encouraging the development of “green leases,” which can help fight the split incentive by benefiting both the building owner and the tenant. For now, however, many companies will likely find that more extensive green retrofits are less cost effective, at least in the short term.
One exception, however, is when a business is moving into a new space. Garvin and Gold’s companies both underwent green retrofits prior to opening their new offices, a decision that enabled them to take advantage of the downtime that was already built into their move. In Garvin’s case, his firm used NYSERDA incentives to help fund expensive upgrades to the company's heating, ventilation and air conditioning (HVAC) systems.
Gold did a similar thing when Manhattan Fruitier moved to Long Island City. “Following New York state criteria, we purchased four energy saver units,” he recalls. The units, each of which qualified for a $250 NYSERDA rebate, saved the company a total of $1,000, making the decision to upgrade a lot easier.
The Real Bottom Line
For Manhattan Fruitier, the decision to undergo a green retrofit had a major effect on its utility costs. Moving into a facility that was five times the size of their former location, both Gold and Westbrook expected their electricity bill would go up sharply. However, Gold notes, between their energy-efficient lighting and upgraded HVAC system, their bill actually stayed almost exactly the same.
However, while green retrofits can have a major impact on electrical bills, Garvin points out that energy costs pale in comparison to employee costs. “If you look at the cost of doing business, 1 percent of business cost is energy," Garvin says. "Nine to 10 percent is real estate, and the other 85 to 90 percent is the cost of the people in the room.”
But this is yet another area in which green retrofits can have a major impact, Garvin believes. “If you can address absenteeism and presenteeism, you can vastly increase the productivity of your employees,” he argues. “You can also get a much bigger return on your investment. It isn’t just about reducing plug load over the weekend.”
Zurica agrees. “As mechanical engineers, we’ve renovated many offices. You go into a lot of these places, and they feel pretty stuffy.” By comparison, the Dagher offices, which have high-efficiency air conditioning and air filtration systems, are much more pleasant. “Anybody who comes here says, ‘Hey, your office is really great,’” she says. “Part of that is the look of the office, but it’s also the feel of the place.”
Last year, Zurica's firm analyzed its retrofit and discovered that, 10 years after the remodel, the company is still saving 22 percent over what a conventionally equipped space would cost. And while it’s hard to measure the direct impact of a pleasant work environment on morale and productivity, Zurica argues that, in her company at least, it's had a significant impact on employee retention.
“If you give employees a happier environment to work in, they’re not as likely to run away for a $5,000 increase in salary,” she says. “And the environment of the office plays a big part in keeping people happy.”
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