AN INDUSTRIAL MANUFACTURER’S GUIDE TO UNDERSTANDING EFFICIENCY-AS-A-SERVICE AND HOW FACILITIES CAN UTILIZE THE SOLUTION TO ACHIEVE ENERGY SAVINGS
Utility bills and operational costs can become a mountain to many industrial manufacturers needing help to remain competitive and profitable. While there are no quick fixes, reducing energy consumption is one of the most impactful obstacles manufacturers can overcome.
Working with an energy efficiency provider can guide manufacturers on the optimization path with practical energy reduction solutions, including working with utilities, finding incentive programs, and maintaining improvements.
Energy efficiency suppliers come in a wide range from do-it-all companies to as-a-service model companies, offering financing, installation, and maintenance.
Efficiency-as-a-service (EaaS), also known as energy efficiency-as-a-service (EEaaS), fills a need, encouraging industrial manufacturers to invest in energy cost reductions. While the flashy terminology is a relatively new solution, EaaS is a proven funding model used in other industries for decades. Fortune 500 companies across the United States have used the solution for multi-million dollar retrofit projects.
What is Efficiency-as-a-Service (EaaS)?
EaaS is a pay-for-performance energy reduction solution that enables participants to access energy efficiency projects with zero upfront costs through the assistance of a provider.
The program, paid by providers, allows for project development, construction, and maintenance. After a project, manufacturers make service payments based on energy savings or performance metrics.
The most common type of EaaS is an energy services agreement (ESA). When providers enter into an ESA with clients, they are typically contracted for five to 15 years. The length and terms of the contracts are highly dependent on the capital required and the cost of capital. The process begins with an energy consumption assessment in which providers must obtain an energy usage baseline and calculate potential savings.
A good ESA contract will come with guaranteed performance metrics and reporting to give the customer assurance the intent of the contract is met. From that point, providers facilitate the installation of high-efficiency equipment and maintain the equipment for the contracted period.
After a project’s completion, measurement and verification (M&V) analysis occurs to compare current energy consumption to the original baseline to ensure the client receives lower utility bills. Throughout the contract, providers typically retain equipment ownership and are responsible for upkeeping the equipment for reliability and performance. Also, new efficiency measures can be implemented during the contracted period if necessary.
At the end of the contract, clients can buy the equipment at fair market value, renew the contract, or return the equipment.
Selecting an ESA Provider
Industrial manufacturers looking for an ESA provider must thoroughly research and not just accept the lowest bid. Working with a provider with a proven track record, solid references, and the necessary experience and services is critical to make sure contacts are appropriately fulfilled.
Before agreeing to a contract, manufacturers should consider all the pros and cons of sharing savings versus purchasing the equipment and paying consulting fees to verify energy impact. Manufacturers that determine the ESA route is the best avenue need to negotiate a fair contract and ensure a comprehensive approach takes place to avoid sacrificing quality. Other factors in negotiating are product warranties and personnel training.
Finding Customizable Solutions with the Right Energy Efficiency Provider
Energy efficiency is growing, with providers offering various industry solutions catering to industrial manufacturers. The level of offerings allows manufacturers to receive unique solutions that fit their needs and requirements.
Different types of buildings will have distinct requirements. For instance, energy-assessing software designed for a smaller site may not be suitable for a large manufacturing facility. Manufacturers must select an energy efficiency provider that can tailor solutions that address their specific challenges.
Compliance standards and regulations differ from one industry to the next. Manufacturers need an energy efficiency provider that can modify its offerings to ensure they comply with all standards and regulations.
For manufacturers to maximize the efficiency and effectiveness of energy reduction solutions, providers have to be able to adapt solutions to specific operational processes and workflows. This level of optimization on the provider’s part improves performance and cost savings.
Many facilities require scalable solutions that can grow with their needs. Customizable offerings allow for energy reduction solutions that can adapt to changes in the size or scope of a manufacturer’s operations.
Some providers differentiate themselves by serving a particular industry. By developing a niche in the market, they are regarded as experts with a selection of solutions applicable only to specific facilities. While the expert level of knowledge is beneficial initially, manufacturers with plans to branch out might become bound by limitations.
Working with APenergy, an Energy Efficiency Provider
APenergy’s consultants collaborate with industrial manufacturers’ on-site teams to identify energy-saving opportunities. By involving a facility’s personnel, APenergy ensures that the energy-saving strategies implemented are practical and tailored to the facility’s unique operational intricacies.
The process of identifying energy-saving opportunities is both data-driven and practical. APenergy combines sophisticated energy analytics with on-site assessments to comprehensively understand where energy consumption can be optimized. During assessments, consultants go beyond simple equipment checks to observe often-overlooked changes and factors that can greatly impact energy efficiency.
Securing project financing can be a significant barrier to energy efficiency projects, particularly for industrial manufacturing facilities with constrained budgets. APenergy works closely with facility owners to identify suitable funding sources through grants, rebates, and incentives.
After implementing energy-saving solutions, APenergy’s consultants continue working with on-site teams to monitor energy consumption, fine-tune systems, and realize the expected savings.
While APenergy can and does provide ESAs, our team has been providing performance contracts for over 15 years. The APenergy approach is unique in that we put a high degree of focus on the utility funding sources first, reducing the capital exposure of our customers with the various sources available to them.
We can often get our engineering time covered by the local utility, so any financial arrangement created is over the equipment. This strategy enables industrial manufacturing facilities that work with us to keep their projects in-house, and they are not obligated to stay in the contract when the scope of the project changes.
Contact APenergy Today
With over 35 years of experience working with industrial manufacturers, the APenegry team identifies areas of inefficiency and makes data-driven decisions to reduce energy usage and costs.
APenergy helps manufacturers set energy-saving goals, track progress, and achieve favorable returns on investment. Companies interested in reducing energy consumption and decreasing monthly energy costs through energy-efficient solutions should contact the APenergy team, the leading sustainable energy consulting company. Our APenergy consultants provide many services to obtain practical energy solutions.