Utility bills are complicated, especially commercial utility bills, so we’ve pulled together a few tips on how to read your energy bill and answer an all-too-common question after energy efficiency retrofits:
Why Is My Utility Bill Higher Than I Expected?
Let’s start with the basics:
- First, the total amount you pay changes every month based on the amount of energy (measured in kWh) you use. That’s simple, right?
- But you pay different rates based on WHEN you use energy (Time of Use)
- You also pay different rates for how QUICKLY you use energy. (Energy Demand, measured in kW)
- And you pay more when a lot of customers are using energy at the same time, like when everyone’s air conditioning is maxed-out in the middle of a hot summer day. (Peak Demand)
On top of that, a number of other factors can lead to greater energy use and higher energy rates that will eventually show up in the form of higher utility bills.
- Changes in weather patterns, like a mild winter, or a record-breaking hot summer
- Changes in building usage, like a new tenant who operates 24/7, or when a hotel sees major occupancy swings
- Operational changes, like how the lighting and HVAC equipment
So Where The Heck Are My Energy Savings?
Common factors like these will not only cause your utility bill to vary from year to year, they will most often drive up your energy costs, rather than reduce energy spend as you expected.
So even if you’ve worked with an energy service company (ESCO) with experience retrofitting buildings for energy efficiency, your commercial energy bill can end up looking about the same.
What happened? Where are the savings you expected from that energy efficiency investment? Did the energy efficiency ROI you planned for actually disappear?
Here’s The Secret to Reading Your Commercial Utility Bill
If you’re only concentrating on energy cost alone, you’re not getting the complete energy picture.
Comparing dollar amounts of your monthly bills, you might not see any savings — and you may even see higher energy costs — because they’re hidden by the variables we discussed above, triggering higher energy costs.
Here’s how to read your commercial utility bill to verify your energy savings: When you look at energy consumption instead of dollars — assuming there haven’t been any major changes in weather or general operations — you will start to see the savings we guaranteed.
To see your savings, don’t look at the dollars, look at the energy use — that’s where you’ll find invisible savings become obvious savings.
Energy Efficiency’s Missing Step: Ongoing Energy Performance Management
Now, what if your savings are still not quite what you expected? While spikes in energy use may come from something obvious like a hot summer, they often come from far less obvious sources.
That’s why energy management for commercial real estate — and energy efficiency projects in hotels — can be tricky.
Typical energy retrofit firms get in and get out with a one-time efficiency project, but it’s what happens after that makes all the difference from an investment standpoint.
Independent studies reveal that energy savings erode by 20% per year, so in just five years, you’ll have nothing to show for your efficiency investment.
When ESCOs, building owners and facility managers just “set it and forget it,” many thousands of dollars in energy savings — and potential NOI — evaporate within just a couple of years.
This is where Carbon Lighthouse’s ongoing Energy Performance Management service comes in:
- The sensors we place throughout buildings continuously stream massive amounts of energy and occupancy pattern data
- Our patented CLUES® technology platform crunches and monitors that data with machine learning and AI to ensure your projected savings are on track — and flag potential issues
- When energy spikes occur, it allows our Energy Performance Team to dig into the problem, alert your facility team and assist them in getting it fixed
- Only ongoing service can detect and solve new issues, so we can take action to ensure that allow us to take action that ensures our 10-year guaranteed results — and mitigate the risk of erosion for building owners