Cheat Sheet: Financial Incentives for Greening Your Energy Load

By Jim Poad Director of Client Solutions, Advantage IQ | December 05, 2010

The hotel industry spends nearly $5 billion annually on energy costs, from lighting to heating and cooling. Adding to the challenge is the continually increasing number of energy-intensive devices in hotels, including plasma televisions and monitors, laundry appliances, and the computers and devices that belong to guests. Hotel energy loads are going strong up to 24 hours per day, making the need to "green" energy loads a priority for hotel owners. Fortunately, there are ample opportunities for hoteliers to cut energy consumption and costs without adversely affecting the comfort of guests. Better yet, greening your hotel's energy load comes with plenty of financial incentives.

A comprehensive, long-term energy strategy can cut energy consumption by up to 10 percent. Hotel executives can guide energy and money savings through a variety of ways, including investments in energy-saving devices, behavior modification, and participation in government grants and programs. In addition to all the federal incentive programs, most U.S. states have rebates and initiatives available. This article will touch upon why it is financially advantageous for hotel owners to work with their energy managers to reduce their energy consumption.

Conduct an Audit for Credit

Before you can start saving, you have to know where you're starting, so it's important to create a baseline of your energy use. An internal energy team or third-party energy consultant can be hired to observe your hotel's energy usage, water use, and waste volume. You can use this information to develop an accurate "load profile" that reflects your energy usage and can be found within your utility invoices. Once you have gathered all of the demand information, a quality profile will consider how demand might have been affected by operating hours, occupancy, temperature, and lighting. An energy consultant can also track your energy usage for you and use their in-depth knowledge of the energy industry and energy markets to identify where you may be overpaying.

What can you do to prevent overpaying for energy? Reviewing the accuracy of utility bills prior to payment and checking with utility providers to make sure you are on the best possible utility rate are quick ways to reduce energy costs. If you have a database that captures utility billing information, you can identify the facilities with the highest cost per square foot and review opportunities to purchase energy in deregulated markets. An energy consultant can also identify if you are on the appropriate rate for your load profile. Hotels qualify for a Time of Use rate that may be more favorable for your 24-hour operation. If a hotel is being billed at a rate suitable for a 9-to-5 operation, it dramatically increases monthly costs. Rate review should be revisited regularly as sites open, close, or demand characteristics change.

Energy consultants can provide site performance benchmarking to help you understand how your hotel performs. Consultants can recommend high-return capital improvements and energy-efficiency investment opportunities, such as the following:

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.