Commercial, Demand Management, Energy Procurement, Industrial, Power Prices, Utilities  -  September 1, 2016

Study finds 14% of companies using wind, solar to avoid peak summer demand charges

A survey of more than 150 energy executives from U.S. businesses has found that 14% of companies use alternative energy — such as solar and wind — to supply their buildings during peak hours to avoid peak demand charges. 

The same survey found that 21% of companies are taking no actions at all to avoid peak use demand charges in the summer. The intent of survey, conducted online during July and August by utility data provider Urjanet, was to help better understand strategies used by U.S. companies to reduce consumption and energy cost during the summer months, when both of those metrics typically soar.

Not surprisingly, 60% of respondents indicated their average electricity rates for peak usage —and correspondingly, their energy costs — go up during summer. The study found that most, but not all, companies have strategies in place to reduce energy spend, with the focus being on managing cooling costs, which 38% of respondents said comprise between 41% and 60% of their company’s total energy use during the summer.

To be sure, Urjanet, which provides utility data to energy service companies and large enterprises, says the results also revealed the need for broader access to data that can better inform a company's strategy in this arena.  

"While many companies attempt to lessen the impact of soaring summer energy costs, a lack of visibility into and control over consumption data prevents them from saving more," the company said in a news release highlighting the results of the report.

Toward that end, Urjanet said the survey results indicated that the strategies and decisions around managing energy use are being made based on “intuition” rather than real data, limiting their effectiveness in reducing cost. For example, 10% of respondents said they don’t know how much cooling really contributes to energy use during the summer, while 43% said they don’t have smart meters to monitor daily usage, or if they have smart meters, they do not use the data.

Beyond the responses around data utilization, the survey revealed several other interesting data points, including the top three strategies for reducing cooling costs: 1. Improving the building envelope (insulation, doors, windows), at 36% of companies surveyed; 2. Altering temperature based on location within a facility, at 35% of companies surveyed; and 3. Altering temperature based on time of day, at 32% of companies surveyed. 

Other survey findings: 

• 18% of respondents said they did not know how their company’s tariffs are determined;
• 31% of respondents said that the high cost/low ROI of energy efficiency projects is their greatest challenge, as it prevents new investments from being made in monitoring and reducing energy spend in the summer;
• and 47% of respondents think they can be doing more during the summer to reduce spend and meet their sustainability goals.

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