Compare and Contrast

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

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 3: Energy and CO2 Reduction Initiatives
Figure 4: U.S. Energy Cost Per Employee
Figure 4: U.S. Energy Cost Per Employee
Source: 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.

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