For Small Businesses: Spend $1,000, Get It Back (and More) Through Energy Efficiency Savings

By Vernon Trollinger, June 30, 2013, Energy Efficiency, Save Money, Small Biz

Spend $1,000 to Save Money on Your Small Business Energy Bills with Bounce EnergyAre your small business energy bills just too high right now? Like many entrepreneurs in your situation, your energy costs don’t come from one big leak, but many small holes. Becoming more energy efficient can help plug those high-priced leaks and put more cash into your bottom line.

I can hear the replies now: “Isn’t too expensive to be energy efficient?” True, if your building is more than 50 years old, it certainly can be. But if it’s newer than that, you can save money by improving the energy efficiency of your small business. For about $1,000 dollars, you can cut your energy costs and save money on your energy bills.

Sounds too fantastic? Let’s take a quick look at how to achieve these savings.

According to the US Department of Energy’s Energy Information Administration (EIA), the average monthly commercial electric usage in 2011 was 6,275 kWh at ¢10.23/kWh and added up to $642.20.

It is true that heating and cooling costs contribute energy costs. What surprised most people is that lighting consumes the most energy for a business as a percentage of the budget and overhead. According to the EIA , businesses spend one-third of their electric bill on lighting. “Lighting consumes 38 percent of total site electricity”— nearly three times more than for cooling, ventilation, and refrigeration, and nearly six times what is used for space heating, computers, and water heating.

One-third of our 6,275 kWh usage average =  2091.66 kWh, so you’re spending $214.06 for lighting every month. In a year, that’s $2568.80.

For our purposes, let’s say our small business is more modestly sized.

  • The monthly consumption is 1000 kWh, so the monthly bill is $102.30.
  • This makes the lighting portion of the bill run between 300 to 340 kWh.
  • We will then leave our lights on for 16 hours each day (7 am to 11pm) in order to accommodate occasional over-time work and janitorial services.

Let’s start to work there on our energy efficiency efforts.

Save Money with Newer Fluorescent Lights

Spend $1,000 to Save Money on Your Small Business Energy Bills with Bounce EnergyWhile fluorescent lights are more energy efficient than incandescent bulbs, newer fluorescent tubes work even better. If your business uses old T12 fluorescent light fixtures, you can install energy efficient lighting and cut your lighting costs by up to 45% by converting to new T5 type systems. T5 systems are smaller (1/8 inch diameter), contain less mercury, and consume less electricity because they produce more light per watt. Upgrading to a T5 doesn’t require installing an entire fixture since T5 Retrofit adapters can be installed in existing T12 fixtures in just a few minutes.

New T5 systems don’t flicker or hum and the lighting tubes have lower replacement costs. In some case, you can replace two T12 tubes with only 1 T5 tube, cutting your energy consumption by 50%.

A T5 retrofit kit costs $45.

So how much does upgrading to energy efficient lighting cost? Let’s figure there are eight twin T12 light fixtures (two 40 watt tubes), each fixtures burns 80 watts (640) watts total for 16 hours each day. That brings the consumption up to 10.240 kWh/day; 307 kWh/month ($31.41); 3684 kWh/year ($376.92).

  • To replace each one with a single 28 watt T5, it will cost $447.76.
  • To pay an electrician for installation will run $100.00.
  • We’ve now spent $547.76 of our $1,000.

But how much will we be saving?

  • Our eight single T5 lamps are burning 28 watts each for a total of 224 watts.
  • Over 16 hours, that’s 3.584 kWh/day; 107.52 kWh/month ($11); 1290.24 kWh/year ($132).
  • Upgrading to energy efficient lighting will save us $244.92 a year.

Many utility companies offer rebates for installing energy efficient lights, but terms and conditions vary so these and are not included here.

Save Money with LED Light Bulbs

We can also change out conventional incandescent bulbs for compact fluorescent bulbs or LED bulbs that use between 75 and 80% less energy. Consider the cost of lighting a 60 watt incandescent bulb:

  • 60 watts x 16 hours (one work day)= .95 kWh/day or ¢9
  • .95 kWh x 30 days = 28.5 kWh./ month or $2.91.
  • 28.5 kWh/month x 12 months = 342 kWh/year or $34.95

Also remember that incandescent bulbs has only has an average life of 1,000 hours and would probably need to be replaced every two to three months. It would take 4 to last through the year. It would add $3.39 in replacement costs and bring up the yearly cost to $38.34.

Meanwhile, using energy efficient lighting such as a 13 watt CFL would cost $7.66/year. Likewise, an 8 watt LED would cost $4.71/year. And both have significantly longer lifespans.

Let’s assume there are 20 screw-in type light fixtures at our small business that use 60 watt style incandescent bulbs.

  • To replace them all of them with LED bulbs, it will cost $200.
  • We will save $604.80/year in energy costs by changing out old incandescent bulbs to energy efficient lighting.
  • That brings our spending up to $747.76 – only $252.24 left.

Save Money with Lighting Sensors

Using sensor lighting controls can further improve energy efficiency simply by turning off the lights in a room when no one is in them for a set period of time. For example, occupancy and vacancy sensors work in two different ways. Occupancy sensor light controls turn lights on by detecting motion and infrared heat. They turn lights off when they no longer detect motion or a heat differential. Vacancy sensor light controls, meanwhile, must be turned on by a person entering the room, but when no movement has been detected for a set period of time, the sensor turns off the lights (or fans, etc).

While these kind of controls can involve expensive systems that are best installed during construction, inexpensive retrofit kits for existing lighting circuits are available. Prices wall-mounted sensors run from $15 to $38 (depending on single, 2-way, or 3-way switch wiring). Installation takes less than 15 minutes ( as much time as it takes to install a light switch).

What are these changes going to cost us? The number and type of light switches are going to depend on the layout of rooms and their frequency of use.

  • For our purposes, let’s assume that six of our T5 light fixtures is in an office and two are in a meeting room.
  • For the 20 screw-in bulb fixtures, let’s figure five of them are on one circuit at the entrance for display-lighting, another ten are used for lighting the main hallway to the offices, and the last five are used in task lighting.
  • The T5 lights use the most electricity and all are on single-pole switched circuits; total of seven. We’ll change these out for some Lutron occupancy sensors.
  • If we get these installed at the same time the T5’s go in, these sensors will cost $190 installed.

These sensors should cut back lighting the T5’s on average to 10 hours/day.

  • This equals 224 watts x 10/day = 2.24 kWh/day; 67.2 kWh/month ($46.87); 806.4 kWh/year ($82.49).
  • Energy efficiency will save an additional $49.51 a year.
  • We still have $62.24 left to spend.

Save Money with Programmable Thermostats

Spend $1,000 to Save Money on Your Small Business Energy Bills with Bounce EnergyCooling and ventilation each consume 13% ( 26% total) of the average commercial electric bill. In our case, where monthly consumption is 1000 kWh and the monthly bill is $102.30, that adds up to 260 kWh/month ($26.60); or 3120 kWh/year ($319.17).

According to, “You can save as much as 10% a year on heating and cooling by simply turning your thermostat back 7°-10° F for 8 hours a day from where you would normally set.” That’s $32 in savings just by not keeping everything quite so cold.

“While newer programmable thermostats sound very expensive with complex wireless internet interfaces, its turns out that according to a Lawrence Berkeley National Laboratory paper, “How People Actually Use Thermostats,” “Today’s modern programmable thermostats (PTs) are complicated and difficult for users to understand, leading to errors in operation and wasted energy.”

Fortunately, there are less complicated models available.

  • We can pick up the Lux TX9600TS  for $50.00.
  • It has a friendly, easy-to-use blue touchscreen and no web interface.
  • It’s also do-it-yourself friendly and is universally compatible with a variety of HVAC systems, including heat pumps.
  • The estimated utility bill savings (10%) mean it will pay for itself in a year.

OK, we’ve spent our $1,000. Of that investment, $931.23 will be repaid in energy savings within the first year. On top of that, there are other practices that save energy in your business that are FREE and add to your energy savings. Incredible? Sure, these examples have been theoretical, however, they are also just basic examples of what can be done in a modest-sized business. Remember, any energy efficiency improvements will reduce your business’s energy costs and even if they are performed over time, your energy savings will add to your bottom line.

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A native of Wyomissing Hills, PA, Vernon Trollinger studied writing and film at the University of Iowa, later earning his MA in writing there as well. Following a decade of digging in CRM archaeology, he now writes about green energy technology, home energy efficiency, DIY projects, the natural gas industry, and the electrical grid.

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