Compare and Contrast

Figure 2: US Building Energy Expenditures
Source: U.S. Dept. of Energy

All energy reduction tactics are not created equal, especially when it comes payback times. Like any investment, some have higher returns and quicker payback than others. The U.S. Mid-Range Abatement Curve (Fig. 3) is a powerful indicator for private sector managers to make smart investments in powerful cost savings.

Initiatives to the left are most cost-effective in savings, reducing energy waste, and, in turn, reducing CO2 emissions.

G-ROI® Ranked by Type of Investment

1. Commercial Buildings: LED Lighting
2. Commercial Buildings: New Shell Improvements
3. Commercial Buildings: Combined Heat and Power
4. Onshore Wind: Medium Penetration
5. Distributed Solar PV
6. Coal Power Plants: CCS New Builds with EOR
7. Onshore Wind: High Penetration
8. Commercial Buildings: HVAC Equipment Efficiency
9. Solar CSP
10. Car Hybridization

Figure 3: Energy and CO2 Reduction Initiatives
Source: 2009 Report on Global Warming by McKinsey & Co.

Figure 4: U.S. Energy Cost Per Employee
Source: GREENandSAVE.com and U.S. Dept. of Energy

Performance metrics are key to smart management. When analyzing costs managers find cost as a percentage of total energy higher with traditional lighting. Very few facilities run sub-meters on lighting, and do not go through the electricity bill line-by-line. The real cost of lighting is often hidden. Fig. 4 highlights both the average percentage of lighting relative to total energy for a typical U.S. office, and average cost per employee.

Managers may use this back-of-the-napkin tool to estimate opportunities for savings with LED lights. LEDs reduce operating costs by 50%, and savings are approximately $60 per employee per year.