Green Energy Isn’t Always What It Seems

Buyer Beware – Using Power Factor Correction and Transient Voltage Surge Suppression to Reduce Energy Costs.

Today’s energy conscious climate has motivated many to do what they can to become more efficient and conserve energy and money. Unfortunately this same climate has prompted others to take advantage of unsuspecting consumers’ wishes to save energy and reduce expenses.

Companies that tout power factor improvement (kVAR correction) and transient voltage suppression are a good example of this bad trend. Lately we are seeing more and more of these companies cropping up and feel it is time to set the record straight.

First, transient voltage surge suppression (TVSS) plays a valuable role in improving power quality to protect sensitive equipment inside a facility. However, TVSS does not save energy. TVSS’s are only active a tiny fraction of a second to protect against voltage surges which only last for less than a millisecond. To actually reduce energy consumption the TVSS would need to actually cut power consumption for an extended period of time which is not what they are designed to do. Again, TVSS is important to protect sensitive electrical equipment but buyers should avoid vendors promising, or even guaranteeing, that they will reduce energy consumption.

Now what about vendors who claim that improving power factor will save 15% or 20% or 30% of energy consumption and corresponding cost? This one is a little trickier.

For residential applications, power factor does nothing to save energy because the typical home already has an average power factor of about 0.97 which is almost the perfect power factor of 1 or unity. In addition, the device (called a capacitor) is placed at the main circuit breaker. According to IEEE 5.5.3.3 capacitors must be situated at or near the respective inductive loads to reduce power system losses by reducing heat and distribution losses known as I2R losses.

So what about commercial and industrial facilities using power factor correction to reduce energy costs? It is perfectly appropriate for a company that is incurring penalties or a kVA billing structure from the utility company to improve the facility’s overall power factor by employing a capacitor bank at the main service entrance or individual capacitors at or near the respective motor loads. Doing so will eliminate the power factor penalties and/or reduce the kVA demand charges on the utility bill which can save significant money and provide a significant ROI on the investment.

But what about power factor correction reducing kWh consumption? IEEE also tells us that I2R losses only account for 2 to 5% of the total load in a facility. Simple math tells us that it would be against the laws of physics to get the 15% to 30% energy reduction claimed by some vendors. Think about it. Even if your facility had 5% distribution losses and you could correct 100% of the problem via power factor correction at every load (which can’t be done) you would still only save 5% at the most. No where near the claims of some capacitor vendors and manufacturers.

All that said, power factor correction when done properly will eliminate utility penalties and kVA demand charges, improve facility power quality, increase electrical system capacity, and save a little energy when applied to the appropriate motor loads.

So make an investment in transient voltage surge suppression and power factor correction when appropriate and necessary. But caveat emptor!

Save Money On Your Company’s Energy Bill, visit Energy Edge Technologies site for strategies on saving a tremendous amount of capital on your Corporate Energy Bill or call 888-729-5722 Ext. 100.

EPAct 2005 Tax Deductions – Time Is Running Out

Many businesses have implemented energy efficiency measures in their facilities over the past several years to help decrease operating expenses and aid the local and global environment. What a lot of these companies do not know is that sizeable federal tax deductions are available to them and also that time may be running out.

The Energy Policy Act of 2005 (EPAct 2005) provides generous, immediate tax deductions to businesses for making energy efficiency improvements to their buildings. The federal tax incentives center mainly on efficiency improvements to lighting, HVAC and building envelopes and can be as large as $1.80 per square foot.

The Emergency Economic Stabilization Act of 2008 extended Section 179D and EPAct 2005 so the act will not expire until December 31, 2013. However, that does not mean that time may not be running out for some companies.

For businesses that implemented energy efficiency projects in 2006 it is probable they filed their tax returns before April 15, 2007. If they were unaware of the deductions at that time, they are now at risk of losing those tax deductions forever since the IRS only allows a three year period to amend tax returns.

That means if you have not yet amended your 2006 tax return you have only a few months left to do so!

As an electrical contractor working with commercial and industrial customers you certainly have been thinking about ways to increase your sales and likely how to better utilize your current book of business to that end. You have also most likely been approached by your current customers asking what they can do to reduce their energy costs.

Have you thought about a strategic partnership with an experienced engineering firm that specializes solely in turnkey, energy cost reduction projects on a national level? One that can bring whole facility energy solutions to the table for you and your customers? A company that can provide a fast payback and increase cash flow for your customer?

Bringing in such a company will grow your business as you will be the one who is sub-contracted by the engineering firm to provide the installation services under their management and direction. You can use this approach over and over again with all of your customers and doing so will not only increase your revenues exponentially, it will also transform your customers’ impression of you from simply another vendor to that of a valued consultant.

Save Money On Your Company’s Energy Bill, visit Energy Edge Technologies site for strategies on saving a tremendous amount of capital on your Corporate Energy Bill or call 888-729-5722 Ext. 100.

Go Green” To Increase Revenues and Profits

Reducing utility costs is good for the bottom line but there are many other financial benefits to reducing energy consumption.

The US Green Building Council tells us on average a “green building” benefits from:
- 30-50% reduced energy use
- 35% reduced carbon emissions
- 40% reduced water use
- 70% reduced solid waste
So what does that really mean in real value to a business or property owner in terms of value beyond lower utility costs? The following include brief facts illustrating some other, demonstrable benefits of “going green”.
PR Opportunities:
Improving how energy efficient your facility is:
- Protects global resources
- Decreases pollution and emissions generated during the energy production process
- Protects the environment
- Reduces solid waste
Improving the efficiency of your facility:
- Provides you the ideal opportunity to gain constructive, no cost publicity
- Allows you to represent your business in a positive light
- Gives your local community and your marketplace a depiction of your company as a responsible steward of the environment.

Considerable Economic Benefits:

In addition to reducing your energy costs, “going green”:

- Reduces maintenance, replacement and production downtime costs via longer life expectancy of the different loads ranging from lighting systems to HVAC systems to production equipment

- Increases the asset value of the property and enhances profitability

- Improves tenant attraction and retention for building owners and leads to higher
premium tenants and higher-end leases

- Demonstrates the strength and intelligence of your executive team and attracts
clients and investors

- Improves worker productivity and safety and reduces absenteeism and turnover via
improved lighting and indoor air quality and comfort. According to the US Green
Building Council, “green buildings” save $58 billion of sick time and add $180
billion in increased worker productivity annually.

In the end, the decision by a company or organization regarding improving energy efficiency will be based for the most part on cost effectiveness measures such as rate of return on the investment or project cost. Nevertheless, it would be prudent to acknowledge and consider the other aforementioned considerable benefits of “going green” as a part of the decision making process.

Save Money On Your Company’s Energy Bill, visit Energy Edge Technologies site for strategies on saving a tremendous amount of capital on your Corporate Energy Bill or call 888-729-5722 Ext. 100.