Home ExpertSpeak Balancing Green, with financial results

Balancing Green, with financial results

Reducing energy costs can have a significant impact on the bottom line of a business and make commercial buildings more attractive to current and prospective tenants’, says Rajesh Sikka, Trane India for an understanding of cost-saving measures in HVAC

Building owners and tenants are reminded of the high cost of energy every time they open their monthly utility bills.  Energy costs are the largest operating expense for most commercial properties, accounting for 25-30 per cent of a typical building’s annual operating budget. Reducing energy costs can have a significant impact on the bottom line of a business and make commercial buildings more attractive to current and prospective tenants.  A study of more than 1300 buildings by the Costar Group found that building with the Energy Star label or LEED certification not only performed better, they also commanded premium rent, enjoyed higher occupancy rates and sold for higher prices in the open market.


Building owners consistently see the quickest return on investment from installing window tinting to reduce sun exposure, upgrading lighting fixtures, bulbs and controls, and installing high efficiency HVAC and automated control systems that optimise HVAC central plant performance. However, every building and operating environment is different. An ECM that might be perfect for one building and set of circumstances may be very wrong for another. Building owners to be vary of the one-size-fit-all approach.  A systematic, sensible energy conservation strategy requires that owners do their homework. With the right information, they can choose ECMs that meet their building’s particular needs and provide a return on investment that justifies the upfront capital outlay.

Following are few steps that needs to be taken before investing in any major improvements:

  • Collaborate with an energy services company to identify ECM opportunities, set priorities and drive implementation. Choose a ESCO with a long-standing industry presence, solid reputation, experience with similar buildings and proven track record.
  • Compare building performance with industry benchmarks using aggregate data available from Energy Star: ASHRAE, the Environmental Protection Agency, the Energy and Resources Institute-India, Bureau of Energy Efficiency – Government of India, Indian Green Building Council or other industry sources. This step is usually both valuable and educational.
  • Remember that a building is a system; the ECMs are often interrelated. For example, adding window tinting may mean increasing interior lighting, which may in-turn require adjustments to the HVAC system. A cable ESCO can make sure that the net effect of all changes is considered.
  • Understand utility rate structures and choose ECMs the take advantage of favourable rates, such as the flexible rates some utilities offer that can change with as little as 15minutes notice. New HVAC and control technology enables managers to respond quickly to vary the load with the rate thus optimising costs.
  • Consider the total impact of retrofit costs and savings on the building’s financial model. For example, understand how leases are structured and determine whether and how the costs and benefits of energy-saving retrofits are allocated to tenants.
  • Remember that it takes training, service and regular maintenance to keep HVAC and other mechanical systems running at peak efficiency so they can deliver the return on investment numbers that justified their acquisition in the first place.


With today’s highly efficient HVAC technologies and other ECMs, owners and operators can reduce energy consumption, push savings to the bottom line, shrink their carbon footprints and create a comfortable affordable environment that will attract and retain the best tenants.


No wonder many developers are making green design a centrepiece of new developments. Owners of existing building also can reduce costs and improve bottom-line performance by taking a green approach. By selecting and implementing the right energy conservation measure, building owners and operators can reduce energy costs as much as 30 per cent according to the ASHRAE.

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