1 kW = $1,000: Putting a price on energy efficiency

Price of energy efficiency

February 28, 2017

By Marco Bieri, Energy Management Specialist

Many people take their cell phone bill very seriously. They analyze and review the small addons – a few extra dollars for more minutes and a few more for visual voicemail – and stick to what they absolutely need. Small additions add up over the course of a phone plan, so they are phone-feature efficient.

The same approach needs to be applied to energy consumption.

It is my job to assist organizations in improving the energy efficiency of their facilities. To help explain the monetary benefit of energy efficiency, I like to use this math:

1 kW running all year (8,760 hours) is 8,760 kWh

Blended rate for electricity is around $0.10 in BC

8,760 kWh x $0.10 = $876 per year

To factor in peak hour rates, assume an extra ~$25 per month

12 x $25 = $300 per year

$876 + ~$300 = ~$1,000 per year

1 kW running always costs ~$1,000 per year.

This approximate price on energy efficiency illustrates the value of optimizing your facilities. The next step is to understand where electricity is being used. Create an inventory and focus on optimizing devices or systems that are always turned on. Energy consumption is not just about how much energy something draws, but how much it is turned on.

The potential for energy savings becomes visible when you know how much you are using and where it is being used. Removing an object that requires 1 kW of electricity can very well save you $1,000 per year.

Use this simple math to improve energy awareness in facilities staff and building occupants. It shows that small changes do add up.

Save energy. Save money.

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