Frequently Asked Questions
- FAQ
- Energy Effectiveness Benefits
- Operational Tips
01. What is Renewable Energy?
02. What Role Does Renewable Energy Play in the United States?
03. What are the environmental benefits of renewable energy?
04. What will I learn during our initial meeting?
05. Why can’t I just leave my building alone?
06. What if your building doesn’t have the right infrastructure?
07. How much energy savings can I achieve by improving my efficiency?
08. Are there other incentives to upgrading my energy efficiency besides cost savings?
09. How can The First Energy Group specify what needs to be upgraded?
10. How does The First Energy Group determine savings?
11. How accurate are the projected energy savings?
12. How does The First Energy Group determine total Savings?
13. How much does it cost to be energy effective?
02. What Role Does Renewable Energy Play in the United States?
03. What are the environmental benefits of renewable energy?
04. What will I learn during our initial meeting?
05. Why can’t I just leave my building alone?
06. What if your building doesn’t have the right infrastructure?
07. How much energy savings can I achieve by improving my efficiency?
08. Are there other incentives to upgrading my energy efficiency besides cost savings?
09. How can The First Energy Group specify what needs to be upgraded?
10. How does The First Energy Group determine savings?
11. How accurate are the projected energy savings?
12. How does The First Energy Group determine total Savings?
13. How much does it cost to be energy effective?
01. What is Renewable Energy?
Renewable energy is any energy that self-replenishes in a short period of time. The sun for example, provides ongoing and powerful energy possibilities and it requires no replenishment. The energy is always there.
The five renewable sources used most often are:
The use of renewable energy is not new. More than 150 years ago, wood, which is one form of biomass, supplied up to 90% of our energy needs. As the use of coal, petroleum, and natural gas expanded, the United States became less reliant on wood as an energy source. Today, we are looking again at renewable resources to find new ways to use them to help meet our energy needs.
Overall consumption from renewable sources in the United States totaled 6.8 quads (quadrillion Btu) in 2007, or about 7% of all energy used nationally. Consumption from renewable sources was at its highest point in 1997, at about 7.2 quads.
Many renewable energy systems can be compatibly blended with the regular electricity provided by your local utility. This is called grid integration and it is increasingly popular around the world and in the USA.
Over half of renewable energy goes to producing electricity. The next largest use is the production of heat and steam for industrial purposes. Renewable fuels, such as ethanol, are also used for transportation and to provide heat for homes and businesses.
Renewable energy plays an important role in the supply of energy. When renewable energy sources are used, the demand for fossil fuels is reduced. Unlike fossil fuels, non-biomass renewable sources of energy (hydropower, geothermal, wind, and solar) do not directly emit greenhouse gases.
(Source: Energy Information Administration)
03. What are the environmental benefits of renewable energy?
Every kilowatt-hour of electricity produced by a renewable energy system eliminates the same amount of electricity produced by conventional power generation stations that are using fossil fuels. Fossil fuels directly contribute to CO2, SO2, NOx and smog.
Clean renewable energy production reduces smog, which is a significant health problem. Solar and geothermal energy avoid this altogether.
04. What will I learn during our initial meeting?
The goal of our first meeting is to explore your current needs, issues and goals. Together we’ll discuss what is reasonable and acceptable in terms of expectations.
Energy is one of the top three expenses for most enterprises. The First Energy Group can help you manage your energy expenditures, while achieving other benefits.
How you use energy affects every dimension of your company. It affects: job turnover, monthly costs, productivity, sick days, repair costs; and even the ability to attract new employees. Most importantly, it also affects the value of your facility and the quality of the air we breathe.
This is where The First Energy Group adds value. Energy management is all we do.
05. Why can’t I just leave my building alone?
You can leave your building alone. However, energy is far more than one of your largest expenses. Most people don’t understand how important energy usage is to the productivity of your entire company as well as how reliant you on it availability.
Wouldn’t it by a wise decision to have an independent expert review this enormous part of your business every few years? It’s a matter of spending pennies to review what’s costing you millions.
06. What if your building doesn’t have the right infrastructure?
Building infrastructures are built and designed to meet minimum code standards and get you into the building at the least possible cost. This is the way our system works.
Contractors, engineers and architects have learned over time that most building developers are very price conscious. They’ve learned to be competitive by leaving the extra bells and whistles and giving their clients what they ask for, not necessarily what’s best.
If you’ve changed building uses over the years or moved into someone else’s facility it’s extremely likely that your energy needs aren’t tailored to your business needs. You probably have a lot of mismatched usages. Example of this would include large air handling capabilities for small areas or small air handling capabilities for large areas.
Sometimes your office may be lit like an engineering area or your engineering areas may be designed for office work. In any case if your energy demand and supply aren’t aligned, it’s as inefficient as having your CFO do your invoice entry.
07. How much energy savings can I achieve by improving my efficiency?
This question depends upon many things. The general rule of thumb is that the less efficient your technologies are the greater the savings will be. Older building technologies are less efficient than modern buildings.
It’s almost a certainty that if your building is over 20 years old and you have not already made improvements to your lighting, HVAC, motors or other technologies, then you can expect to see major improvements. Sometimes as much as an 80%.
In addition, and probably more importantly, your business environment will improve. Using energy technology properly will make people more comfortable and safer. Research has also shown increases in productivity, less employee turnover, and higher customer satisfaction.
Two other factors that play a significant role in the amount of savings you can expect are your operating hours and your cost of energy. The reason for this is simple. Both of these are leveraging factors. Even a small amount of reduction at play for many hours will contribute to a large dollar savings. The same logic applies if your electric rates are high.
08. Are there other incentives to upgrading my energy efficiency besides cost savings?
The U.S. government wants us to be more energy efficient and pollute less. Today there are a number of state and federal incentive programs for businesses that encourage this.
Many states and utilities offer large financial rebates to encourage your business to make this transition. Each rebating authority has its own rules and regulations. However, they all share certain goals; they want you to reduce your energy needs and transition to modern energy efficient technologies. And they are willing to pay you to do so.
They do this for two reasons. Politically, each state wants to be seen as actively working to decrease pollution. Improving energy efficiency is one of the easiest and proven techniques to decrease pollution. Additionally, if each state doesn’t reduce their energy consumption they will soon be faced with even worse choices, such as investing millions of dollars in additional power plants or adding more capacity to their already overloaded distribution systems.
The Internal Revenue Service offers numerous tax credits and incentives for making this transition and many states and municipalities offer assistance (often by the Economic Develoment Authority in that area) in the form of low cost financing or additional tax credits.
The First Energy Group will help you navigate your way through the government maze to ensure that your business leverages every last penny of these resources.
09. How can The First Energy Group specify what needs to be upgraded?
Our auditors will spend a fair amount of time at your facility reviewing your building technologies and how you use them. Later, we take this information and enter it into proprietary energy conservation software. Using a combination of this custom developed software, proprietary product databases and energy modeling rules, along with some good old fashioned human review-- we then make our recommendations.
Unless a client dictates otherwise, our goal is to always provide better conditions. Besides saving money, we design for higher quality lighting; better controlled heating and cooling; longer lasting equipment that requires less maintenance; and maximizing your expected returns on improvements.
Our philosophy is to use state-of-the-art technologies and energy conservation techniques. Unfortunately, many buyers shop for lower up-front costs. They often aren’t trained to ask the proper questions regarding initial costs vs. operating costs. And, even if they are, they may not have the available time or proper resources to completely research the long-term implications.
It has been our experience that many energy decisions are made based upon the recommendations of a local contractor. While this contractor may be great at what he does, it's rare that contractors are proficient in energy management techniques – it’s just not their core competency.
10. How does The First Energy Group determine savings?
Whenever we prepare a proposal we calculate the savings that are expect to occur. Once we determine your correct path (not always so easy) we model the savings from our recommendations. For a very basic example, when you change a 100W light bulb to a 60W light bulb the energy savings are calculated to be 40W (100-60= 40).
Your dollar savings are calculated more indirectly. First we determine your average cost of energy (we take your bills and divide your invoice amount by your usage). Then, we determine how many hours you are operating. We learn this number by visual inspection and by interviewing your personnel.
Once these are all determined your savings are calculated as follows:
Energy Savings = Energy Saved x Cost of Energy x Hours saved
This is the basis for everything we do to determine your savings. Once we determine your cost of energy it typically can be used with various algorithms for all of your energy reduction calculations.
We do a similar calculation on every component identified during the audit. Sometimes this information is easy and obvious to obtain. At other times it requires more research or application of industry standards. Our operating goal is always to reduce energy, reduce costs, and find more reliable alternatives for your business.
11. How accurate are the projected energy savings?
It depends. Most of the time it is extremely accurate.
Sometimes we need to make assumptions. When we do so we always try to err on the conservative side. Our projections are designed to be intentionally less than anticipated. Most of the time our clients save more energy than we originally projected.
We calculate the cost of your energy. However, your cost of energy may change. Energy costs are strongly influenced by politics as well as supply and demand. As a general rule, your cost of energy is increasing – sometimes very quickly. The savings we forecast are always conservatively based upon your historical cost of energy. In reality we expect your energy costs to increase above what we forecast.
During a lighting assessment phase, we assume you are using energy efficient ballasts. If you’re actually using non-energy efficient fixtures, as many facilities are, then your actual savings will be much better. Once again, we conservatively estimate your fixture wattages.
No one ever gets upset when their savings are greater than predicated. And most energy savings are so great to begin with there is no need to make less conservative assumptions to improve a project from a 60% ROI to one with 66%.
When we examine existing equipment such as HVAC, Chillers, Boilers, motors, etc. we use the manufacturer’s specifications to determine energy use. We know these numbers are conservatively in error. Manufacturers specify their equipment in new condition. Used equipment never works as well as when it was new.
The reality is that equipment gets dirty, filters are not immaculate, buildup occurs all over the place, and mechanical systems erode. The reality is that equipment almost never gets more efficient over time.
We also interview you to determine your operating hours. In reality this is where the largest source of errors is likely to occur. If you cut your shifts back or do not operate as you represent this may have a significant effect on your projected savings. In our experience, most clients tend to understate how much time their systems are really on. Many tend to ignore the night circuits that are always on, or forget that their maintenance crews keep the lights and/or HVAC systems on longer than usual. All of this missed time causes your actual savings to be greater than projected.
Finally, there are certain factors that are just not easily knowable. Things like the effects of various control devices or how many hours your AC compressors are actually operating; they don’t operate full time even when your AC unit is on. For these types of systems we reference published standards that groups such as ASHRAE (American Society of Heating, Refrigerating and Air-Conditioning Engineers) and manufacturers make available.
12. How does The First Energy Group determine total Savings?
Total savings are determined by adding your energy and anticipated maintenance savings. After we determine your energy savings we add your maintenance savings. There is a caveat here, no one knows what their maintenance savings are and no two companies calculate their maintenance savings the same way.
We do not include the non-measurable benefits on such items as productivity, “green” image, or others. However, most research has determined that the non-measurable benefits of energy conservation projects are a multiple of times better than the actual measurable results.
Some companies tell us they will have little savings since they pay someone to maintain their equipment all the time, and if that person had less to do the benefit would decrease. With that said, let’s take a look at how The First Energy Group looks at maintenance savings.
New equipment costs less to maintain than aging equipment. Today’s modern components are designed to last longer and perform better than ever before. The maintenance costs that we attempt to estimate include:
13. How much does it cost to be energy effective?
One of the biggest surprises for most companies is how large the energy conservation upgrade savings are and how quickly they appear. The First Energy Group has developed our Shared Savings Program whereby we jointly agree up-front what your savings will be. Then, we use a portion of these savings for a period of time and apply them to the purchase of your upgrade. The other portion you immediately keep.
Now instead of looking at what this will cost the real question becomes how quickly can I increase my cash flow? Your energy conservation upgrades will always pay for themselves. You don’t have to invest one cent to get these benefits. This isn’t too good to be true. Energy conservation is really that obvious a solution.
The First Energy Group Shared Savings Program allows you to get the full benefits of an energy efficiency upgrade with only positive cash flow on your part. The length and percentage of savings are based upon what types of recommendations we offer and are specific to each facility.
On the other hand, some people just want to purchase their upgrades and be done with it. Well, that’s ok also. The First Energy Group will offers both options and you choose what works best.
Some considerations:
Shared Savings
Renewable energy is any energy that self-replenishes in a short period of time. The sun for example, provides ongoing and powerful energy possibilities and it requires no replenishment. The energy is always there.
The five renewable sources used most often are:
- Biomass - including wood and wood waste, municipal solid waste, landfill and biogas, ethanol, and biodiesel
- Water (hydropower)
- Geothermal
- Wind
- Solar
The use of renewable energy is not new. More than 150 years ago, wood, which is one form of biomass, supplied up to 90% of our energy needs. As the use of coal, petroleum, and natural gas expanded, the United States became less reliant on wood as an energy source. Today, we are looking again at renewable resources to find new ways to use them to help meet our energy needs.
Overall consumption from renewable sources in the United States totaled 6.8 quads (quadrillion Btu) in 2007, or about 7% of all energy used nationally. Consumption from renewable sources was at its highest point in 1997, at about 7.2 quads.
Many renewable energy systems can be compatibly blended with the regular electricity provided by your local utility. This is called grid integration and it is increasingly popular around the world and in the USA.
Renewable energy plays an important role in the supply of energy. When renewable energy sources are used, the demand for fossil fuels is reduced. Unlike fossil fuels, non-biomass renewable sources of energy (hydropower, geothermal, wind, and solar) do not directly emit greenhouse gases.
(Source: Energy Information Administration)
03. What are the environmental benefits of renewable energy?
Every kilowatt-hour of electricity produced by a renewable energy system eliminates the same amount of electricity produced by conventional power generation stations that are using fossil fuels. Fossil fuels directly contribute to CO2, SO2, NOx and smog.
Clean renewable energy production reduces smog, which is a significant health problem. Solar and geothermal energy avoid this altogether.
04. What will I learn during our initial meeting?
The goal of our first meeting is to explore your current needs, issues and goals. Together we’ll discuss what is reasonable and acceptable in terms of expectations.
Energy is one of the top three expenses for most enterprises. The First Energy Group can help you manage your energy expenditures, while achieving other benefits.
How you use energy affects every dimension of your company. It affects: job turnover, monthly costs, productivity, sick days, repair costs; and even the ability to attract new employees. Most importantly, it also affects the value of your facility and the quality of the air we breathe.
This is where The First Energy Group adds value. Energy management is all we do.
05. Why can’t I just leave my building alone?
You can leave your building alone. However, energy is far more than one of your largest expenses. Most people don’t understand how important energy usage is to the productivity of your entire company as well as how reliant you on it availability.
Wouldn’t it by a wise decision to have an independent expert review this enormous part of your business every few years? It’s a matter of spending pennies to review what’s costing you millions.
06. What if your building doesn’t have the right infrastructure?
Building infrastructures are built and designed to meet minimum code standards and get you into the building at the least possible cost. This is the way our system works.
Contractors, engineers and architects have learned over time that most building developers are very price conscious. They’ve learned to be competitive by leaving the extra bells and whistles and giving their clients what they ask for, not necessarily what’s best.
If you’ve changed building uses over the years or moved into someone else’s facility it’s extremely likely that your energy needs aren’t tailored to your business needs. You probably have a lot of mismatched usages. Example of this would include large air handling capabilities for small areas or small air handling capabilities for large areas.
Sometimes your office may be lit like an engineering area or your engineering areas may be designed for office work. In any case if your energy demand and supply aren’t aligned, it’s as inefficient as having your CFO do your invoice entry.
07. How much energy savings can I achieve by improving my efficiency?
This question depends upon many things. The general rule of thumb is that the less efficient your technologies are the greater the savings will be. Older building technologies are less efficient than modern buildings.
It’s almost a certainty that if your building is over 20 years old and you have not already made improvements to your lighting, HVAC, motors or other technologies, then you can expect to see major improvements. Sometimes as much as an 80%.
In addition, and probably more importantly, your business environment will improve. Using energy technology properly will make people more comfortable and safer. Research has also shown increases in productivity, less employee turnover, and higher customer satisfaction.
Two other factors that play a significant role in the amount of savings you can expect are your operating hours and your cost of energy. The reason for this is simple. Both of these are leveraging factors. Even a small amount of reduction at play for many hours will contribute to a large dollar savings. The same logic applies if your electric rates are high.
08. Are there other incentives to upgrading my energy efficiency besides cost savings?
The U.S. government wants us to be more energy efficient and pollute less. Today there are a number of state and federal incentive programs for businesses that encourage this.
Many states and utilities offer large financial rebates to encourage your business to make this transition. Each rebating authority has its own rules and regulations. However, they all share certain goals; they want you to reduce your energy needs and transition to modern energy efficient technologies. And they are willing to pay you to do so.
They do this for two reasons. Politically, each state wants to be seen as actively working to decrease pollution. Improving energy efficiency is one of the easiest and proven techniques to decrease pollution. Additionally, if each state doesn’t reduce their energy consumption they will soon be faced with even worse choices, such as investing millions of dollars in additional power plants or adding more capacity to their already overloaded distribution systems.
The Internal Revenue Service offers numerous tax credits and incentives for making this transition and many states and municipalities offer assistance (often by the Economic Develoment Authority in that area) in the form of low cost financing or additional tax credits.
The First Energy Group will help you navigate your way through the government maze to ensure that your business leverages every last penny of these resources.
09. How can The First Energy Group specify what needs to be upgraded?
Our auditors will spend a fair amount of time at your facility reviewing your building technologies and how you use them. Later, we take this information and enter it into proprietary energy conservation software. Using a combination of this custom developed software, proprietary product databases and energy modeling rules, along with some good old fashioned human review-- we then make our recommendations.
Unless a client dictates otherwise, our goal is to always provide better conditions. Besides saving money, we design for higher quality lighting; better controlled heating and cooling; longer lasting equipment that requires less maintenance; and maximizing your expected returns on improvements.
Our philosophy is to use state-of-the-art technologies and energy conservation techniques. Unfortunately, many buyers shop for lower up-front costs. They often aren’t trained to ask the proper questions regarding initial costs vs. operating costs. And, even if they are, they may not have the available time or proper resources to completely research the long-term implications.
It has been our experience that many energy decisions are made based upon the recommendations of a local contractor. While this contractor may be great at what he does, it's rare that contractors are proficient in energy management techniques – it’s just not their core competency.
10. How does The First Energy Group determine savings?
Whenever we prepare a proposal we calculate the savings that are expect to occur. Once we determine your correct path (not always so easy) we model the savings from our recommendations. For a very basic example, when you change a 100W light bulb to a 60W light bulb the energy savings are calculated to be 40W (100-60= 40).
Your dollar savings are calculated more indirectly. First we determine your average cost of energy (we take your bills and divide your invoice amount by your usage). Then, we determine how many hours you are operating. We learn this number by visual inspection and by interviewing your personnel.
Once these are all determined your savings are calculated as follows:
Energy Savings = Energy Saved x Cost of Energy x Hours saved
This is the basis for everything we do to determine your savings. Once we determine your cost of energy it typically can be used with various algorithms for all of your energy reduction calculations.
We do a similar calculation on every component identified during the audit. Sometimes this information is easy and obvious to obtain. At other times it requires more research or application of industry standards. Our operating goal is always to reduce energy, reduce costs, and find more reliable alternatives for your business.
11. How accurate are the projected energy savings?
It depends. Most of the time it is extremely accurate.
Sometimes we need to make assumptions. When we do so we always try to err on the conservative side. Our projections are designed to be intentionally less than anticipated. Most of the time our clients save more energy than we originally projected.
We calculate the cost of your energy. However, your cost of energy may change. Energy costs are strongly influenced by politics as well as supply and demand. As a general rule, your cost of energy is increasing – sometimes very quickly. The savings we forecast are always conservatively based upon your historical cost of energy. In reality we expect your energy costs to increase above what we forecast.
During a lighting assessment phase, we assume you are using energy efficient ballasts. If you’re actually using non-energy efficient fixtures, as many facilities are, then your actual savings will be much better. Once again, we conservatively estimate your fixture wattages.
No one ever gets upset when their savings are greater than predicated. And most energy savings are so great to begin with there is no need to make less conservative assumptions to improve a project from a 60% ROI to one with 66%.
When we examine existing equipment such as HVAC, Chillers, Boilers, motors, etc. we use the manufacturer’s specifications to determine energy use. We know these numbers are conservatively in error. Manufacturers specify their equipment in new condition. Used equipment never works as well as when it was new.
The reality is that equipment gets dirty, filters are not immaculate, buildup occurs all over the place, and mechanical systems erode. The reality is that equipment almost never gets more efficient over time.
We also interview you to determine your operating hours. In reality this is where the largest source of errors is likely to occur. If you cut your shifts back or do not operate as you represent this may have a significant effect on your projected savings. In our experience, most clients tend to understate how much time their systems are really on. Many tend to ignore the night circuits that are always on, or forget that their maintenance crews keep the lights and/or HVAC systems on longer than usual. All of this missed time causes your actual savings to be greater than projected.
Finally, there are certain factors that are just not easily knowable. Things like the effects of various control devices or how many hours your AC compressors are actually operating; they don’t operate full time even when your AC unit is on. For these types of systems we reference published standards that groups such as ASHRAE (American Society of Heating, Refrigerating and Air-Conditioning Engineers) and manufacturers make available.
12. How does The First Energy Group determine total Savings?
Total savings are determined by adding your energy and anticipated maintenance savings. After we determine your energy savings we add your maintenance savings. There is a caveat here, no one knows what their maintenance savings are and no two companies calculate their maintenance savings the same way.
We do not include the non-measurable benefits on such items as productivity, “green” image, or others. However, most research has determined that the non-measurable benefits of energy conservation projects are a multiple of times better than the actual measurable results.
Some companies tell us they will have little savings since they pay someone to maintain their equipment all the time, and if that person had less to do the benefit would decrease. With that said, let’s take a look at how The First Energy Group looks at maintenance savings.
New equipment costs less to maintain than aging equipment. Today’s modern components are designed to last longer and perform better than ever before. The maintenance costs that we attempt to estimate include:
- Time, effort, and cost to report a problem, schedule and do the repair or replacement
- Cost to order, receive, store and retrieve products
- Cost to process and pay bills
13. How much does it cost to be energy effective?
One of the biggest surprises for most companies is how large the energy conservation upgrade savings are and how quickly they appear. The First Energy Group has developed our Shared Savings Program whereby we jointly agree up-front what your savings will be. Then, we use a portion of these savings for a period of time and apply them to the purchase of your upgrade. The other portion you immediately keep.
Now instead of looking at what this will cost the real question becomes how quickly can I increase my cash flow? Your energy conservation upgrades will always pay for themselves. You don’t have to invest one cent to get these benefits. This isn’t too good to be true. Energy conservation is really that obvious a solution.
The First Energy Group Shared Savings Program allows you to get the full benefits of an energy efficiency upgrade with only positive cash flow on your part. The length and percentage of savings are based upon what types of recommendations we offer and are specific to each facility.
On the other hand, some people just want to purchase their upgrades and be done with it. Well, that’s ok also. The First Energy Group will offers both options and you choose what works best.
Some considerations:
Shared Savings
- You have more control over an operating budget than a capital budget
- You want to see constant positive cash flow
- You want to leverage The First Energy Group’s money to grow your business.
- You have exceeded internal depreciation levels and would like to defer expenses
- You can get quicker authorization on a smaller monthly amount
- Your approval process is simpler
- You don’t want the hassle of cutting monthly checks
- It’s easier to get capital approvals than to touch your operating budget
- You don’t have strong enough financials to support the credit requirements of Shared Savings
- You have a lot of cash and are looking for a place to invest it that will yield a strong financial return (often 40% plus) In any case don’t let these choices hold you up from doing the right thing. Call us with any questions you might have.