There are three main factors that combine to impact how much money building owners and operators spend on energy. Think of these factors as three legs of the same stool — letting any one factor get out of balance will result in an unstable situation. Big or small, in your home or a bigger organization, the concepts are universal. Learning what they are, how they impact the bottom line and how to influence them can reduce your utility bills.

The three legs are:

• How much and when you use energy,
• How efficiently you use it, and
• The price you pay for it.

Let’s analyze each leg one at a time.

Leg 1 – How much you use energy

The amount of energy a building uses has a big impact on utility costs. If you use more energy, you will pay more in utilities. However, it’s important to not simply consider energy use in a vacuum, but instead consider the building's primary business mission and what that energy use represents.

For instance, in the case of a pizza restaurant, it takes a certain amount of energy to power the pizza ovens, the building lights, the heating and cooling systems, and the signs outside. Week to week, month to month, the utility use and the resulting bill might vary — it might vary a lot. That could indicate that there is energy waste happening in the form of equipment being left on after hours. Or heating and cooling settings being out of sync with work hours. Or the lights not being switched off when the business is closed.

But it also could indicate more energy consumption due to growth over time in the business, resulting in more employees, more use of the pizza ovens, and more heating and cooling.

In the first scenario, the increased energy consumption is bad because it represents waste. In the second scenario, it represents business growth and potential increased profitability — and that’s a good use of energy because of what the business is getting in return for the increased spend.

It is reasonable to expect that a pizzeria near a college campus will do more business, bake more pies and use more energy during finals week than over a break when campus is deserted. Specific energy use information can also provide the type of business intelligence needed to make decisions about growing the business. In many cases, more is better … in context.

This is all to say that understanding the factors that impact energy consumption is critical to making good business decisions about its energy use.

Leg 2 – How efficiently you use the energy

Efficiency is the next piece that can make a major impact on energy consumption. In the pizza restaurant example, there are a number of factors impacting efficiency that could be explored to reduce energy consumption.

Are the lighting fixtures as efficient as they could be? The efficiency gains in changing from incandescent lighting to compact fluorescent or even to LED are easy to “see” — it’s a matter of math. There are ways to provide the same light to the same spaces for the same hours that simply use less energy to get the desired result, like a pleasantly lit restaurant.

The same applies to the chillers of today, which use far less energy to provide the same cooling than those of 20 years ago. Even the ovens and ventilation might present opportunities to do the same job, meet the same needs and use less energy.

Once the energy use is understood from the first leg of the stool, the second leg helps explore the opportunities to improve upon that use to get the most out of every energy dollar.

Leg 3 – How much you pay for energy

Finally, in the third leg of the stool, we can impact our utility bill by reducing how much we pay for the energy we use.

Whether you live in a regulated or de-regulated electric utility state, there are still opportunities available to ensure you get the best price for your energy spend. An energy services partner like Trane can help you source energy in a way that reduces your overall costs.

Understanding all three legs of the stool unlocks opportunities to make significant savings on utility costs. And reducing your energy costs can have a significant impact on your business.

It’s not only about the direct dollars saved through lower utility bills. It’s also about how the dollars saved are reinvested into the core business mission of your organization, and how they can have significant impacts on your business’s bottom line for years to come.

If you had more budget available to hire that next employee, or research that next innovation, or launch that next product — where would that take your business? Reducing bottom-line expenses by understanding the three legs of the energy stool is the first step toward unlocking that potential for your business.

How’s your building’s three-legged stool?

The key to transforming your building’s energy use lies in understanding how to manage each leg of the three-legged stool. Click here for more information on how Trane Building Advantage works with building owners and managers to manage energy consumption, efficiency and pricing.