I cannot deny it, solar is sexy. Everyone is talking about it. There are government incentives and rebates to help defray some of the cost, customers and employees are asking about it, and there is no arguing with the fact that we need an alternative to coal, nuclear, and fossil fuels. But slapping solar panels on top of a building to “save the planet” is not the answer. Maximizing a business’s energy efficiency and achieving true transparency is much sexier.
Alternative energy is great, but unless a commercial property has maximized the efficiency of the building, using alternative energy from solar panels is just masking the inherent inefficiency of the energy usage.
Let’s look at a slightly exaggerated example to prove a point. There is a 250,000 square foot office building which is 60 years old with 20-year-old lighting, 20-year-old heating and cooling systems, and a huge data center stacked to the roof with servers because the IT team believes that “he who dies with the most toys wins.” For some, this is unfortunately not much of a stretch. Now say that all the lights, heating/cooling, and all the IT equipment in the entire building are left on 24 hours a day, 7 days a week, including Passover and Christmas.
At this point, you have two choices. You can either encourage the employees in the building to turn everything off on weekends and holidays, which will reduce the energy usage by about 30% right off the bat and not cost you a dime, or you can choose to put $1,500,000 worth of solar panels on your roof so that at least a percentage of the exorbitant energy being used is not coming from some coal burning power plant (note: many locations don’t even get sun on Christmas, so the solar panels would just be roof decorations.) This seems to be a fairly obvious choice, and I may be exaggerating for illustrative purposes, but what remains true in most situations is that the use of alternative energy should only be used once the internal system is as efficient as possible.
Before we get into what you should or shouldn’t do, let’s explore why you would want to install solar in the first place. Most companies install solar for one or all of the following reasons: they want to make their employees and customers happy by showing that they are committed to sustainability; they want to save as much money as possible on their energy bills; or, they want to make the most significant environmental improvements that they possibly can. Let’s simplify this even further and say that companies want to save money while doing the right thing.
Saving Green by going Green
If a company’s goal is to reduce their operating expenses and energy related expenses, installing solar panels has a fairly unattractive return on investment when compared to retrofits such as high-efficiency lighting upgrades or the installation of occupancy sensors. Solar panels require a substantial capital outlay with a payback period of around 7 to 10 years whereas upgrading your lighting or installing occupancy sensors can have as little as a 1-3 year payback period. Just looking at the financial implications, wouldn’t it make sense to implement every project that has a zero to seven year payback period prior to implementing projects with a 7- to 10-year payback period?
Recently, iReuse worked with Berg Holdings to reduce their energy bills at two of their Sausalito-based office buildings. Initially, Berg wanted to install solar panels, but contacted iReuse for a second opinion and to assess the environmental and financial impacts of solar panels versus energy efficient retrofits. iReuse found that the payback of solar was 8 years, while the payback of energy efficient retrofits was just 2 years. That’s four times the cost of energy efficient retrofits and installing occupancy and lighting sensors. After showing the overall financial implications of solar to Berg, it was easy to convince them to go with the retrofits.
Going Green to be Green
Harnessing energy from the sun is absolutely amazing. There is really only one thing in my mind that is more amazing: not needing the energy in the first place. In evaluating the environmental benefits of solar panels, we must include consideration of the full lifecycle environmental cost of producing, distributing, using, and disposing of solar panels, as well as all the myriad of energy efficiency alternatives.
In the end, solar is one answer, but it should not be the first answer. Like dropping a supercharged engine into a rundown car that barely operates, a premature solar installation will be a high-cost, high-visibility solution to the wrong problem. Once you can’t reasonably shave any more kWh off of your energy bill, then alternative energy is a great solution to get you closer to energy neutral.
About iReuse:
iReuse is a sustainability consulting and software company that serves organizations interested in reducing their operational costs and environmental impact. iReuse software and services provide organizations with a clear sustainability roadmap to achieve measured results. iReuse Sustainability Consulting helps organizations implement programs such as waste diversion, energy efficiency, water conservation, green procurement, greenhouse gas measurement and reporting, green business certification, LEED certification, and more.
For more information about iReuse, please contact Ken Kurtzig at ken@ireuse.com or call
415-332-9977 x221.
Discussion: 4 Comments
Great article Ken! I totally agree with you. The fact is that until solar becomes more efficient and affordable it is not a mass solution anyway. There is also no effective mechanism to store energy at this point either.
Starting with the source of the problem is the key to creating an effective strategy – using CFL’s, fixing leaking duct systems, having good programmable thermostats set at reasonable temperatures, and managing IT resources effectively are a great start.
Ken-
I agree and disagree all at the same time. Is this possible?!?! I agree in that making upgrades to buildings to reduce the amount of electricity, water, paper or whatever resource we are talking about is critical and really is the first step to “success” as you mention. However, making these upgrades will never get a building off the grid or create energy independence. Until the utilities are forced to embrace using alternative energy sources (wind, solar, hydro, etc…) residential, commercial and privately financed alternative energy must get implemented so there is competition in the energy supply chain.
All of these technologies are relevant in their own right. Thanks and I wish iReuse much success.
Thanks for the comments. I am always glad to see clients make progress. Whether it is Solar or Energy Efficiency, the key is that a client moves towards a more sustainable position.
With regard to the comment about agreeing and disagreeing with my article, a little confusion and thoughtful analysis is really the key. The most important thing is that you analyze all the various options and make informed decisions which maximize your success. In many cases, the full environmental impact is not known so it often comes down to a judgment call as to which option is better. Is solar better than telling employees to turn the lights off? I think it is hard to argue that just turning the lights off is better but that still requires energy to communicate out via email to everyone, monitoring the energy consumption and changes, and policing if necessary to ensure that lights are off. On the other hand, when installing solar you have the entire supply chain of the manufacturing of the solar panels and all the environmental impacts which will most likely never be 100% transparent, plus all the environmental impacts from the installation process, and every other small aspect of the choice to install solar. You can drive yourself crazy trying to get real transparency around a process that is inherently designed to be murky because the more difficult a process is to understand or replicate, the more valuable the product is as we know. This may be a good topic for a future article.
Best Wishes,
Ken
I was a manager at one of the largest solar manufacturers. You missed an important point. Green energy is ONLY green if the energy output greatly exceeds the energy input. #1 The initial step in solar involves an extremely high energy consumtion step. #2 There are many subsequent steps which consume energy and use materials which required energy to be generated. #3 Many of the materials used to manufacture the pannels end up filling landfills. #4 Pannels life are about 20 to 25 years. The materials used are not safe for disposal. Please share this…it isn’t green. Your government is not the right group to choose what is Green.