WAUKESHA, WIS.—The installation of an energy management system (EMS) is an investment that pays for itself over time (typically two to five years), by reducing energy consumption and streamlining workflows.
Engineers at Telkonet, Inc. analyzed the primary factors that affect EMS payback. They did this by looking at over 10 years’ worth of granular data about customer energy usage.
Telkonet identified five primary drivers of EMS project payback. The company set out to learn which are the most powerful drivers affecting project payback. Telkonet gathered 10+ years of real-time savings data, and analyzed the following elements that affect each of its properties:
- Electrical Rates
- Natural Gas Rates
- HVAC Types
- Temperature Ranges
- Humidity Ranges
Telkonet analysis was limited to networked systems, often using a PMS (property management system) interface to the EMS (energy management system).
Electricity supply is widely available across the United States, and certainly more so than natural gas supply. Prices vary by locality because of the availability of power plants and fuels, local fuel costs, pricing regulations, and demands of stockholders. The higher the electricity rates, the faster the payback. If you’ve been paying exorbitant electricity rates (such as in Hawaii), and you reduce your usage, your payback time is shortened. In terms of payback, in general, reducing electricity consumption will shorten EMS project payback.
Natural Gas Rates
Natural gas for heating has become increasingly more efficient over the years. Its rate structure is based upon a fixed-price cost for supply: the more you use it, the less per-therm it costs. Additionally, years ago the United States became a major exporter of natural gas, which will continue to drive rates down over the long term.
There’s more: since distribution is spread out rather well across the geography of the cold and moderate U.S. temperature ranges, the result is lower-than-average rates in those parts of the country. What does that mean for EMS payback? Natural gas rates do not shorten EMS payback time significantly. The good news is, since natural gas is more efficient, offering reduced heating operating costs when compared to electricity, natural gas offers far better operational savings over the long term. Natural gas rates by themselves have a shallower impact on EMS payback time. But their low rates along with high heating efficiency most do reduce HVAC heating operating costs long-term.
Generally speaking, PTACs are less efficient than fan coils. Their basis is electrical power use as opposed to central boiler and chiller use. Surprisingly however, Telkonet analysis of the data collected over the last decade shows there is only a two-month difference between project paybacks for PTAC/PTHPs and those for fan coil units when using occupancy-based thermostats. (Occupancy-based thermostats are crucial for fast payback. Setback thermostats presume occupancy status, often incorrectly. Occupancy sensors operate on true occupancy status of the occupant’s room.)
PTAC/PTHPs have a slight advantage when it comes to shorter payback. This is because PTAC/PTHPs are electricity-based, and not boiler/chiller based. And since electricity is comparatively more expensive than natural gas, project payback is thus somewhat faster. So, there is little difference in payback between PTAC/PTHPs and fan coil units, when using an occupancy-based thermostat designed for unitary HVAC environments.
Integrating unitary room controls with central control systems has a measurable impact on your overall return on investment from both unitary and central systems. To obtain the best possible savings, purchase the unitary room control system and the central control systems from one vendor experienced in both.
Telkonet studies revealed several things about regions. One is that an attractive EMS payback (two to five years) is achievable across the entire United States. Electricity rates are of such an impact that any location can benefit from EMS deployment.
Not surprisingly, regions with the combination of cold temperatures and high electricity rates have the edge on offering the shortest EMS payback time. This is because in cold climates, there’s both a high number of heating degree days AND cooling degree days, unlike areas with hot temperatures only, where there are only cooling degree days.
To emphasize, this does not suggest that other regions offer poor payback potential; rather, these regions simply have the edge in offering the best payback potential in general. Factor in the impact of utility rebates, and any of these regions can offer payback far less than three years.
Initially, excessive humidity does not contribute to payback. During this time, excessive moisture is aggressively being sucked out of the air. But it certainly pays for itself in other ways, preventing a property from the expensive proposition of replacing damaged furniture, drapes, tile, carpeting, and more on a frequent basis.
• Electricity prices have a broad and deep impact on payback.
- Natural gas prices have narrow and shallow impact on payback.
- Temperature versus total heating and cooling degree days drives payback.
- Actual guestroom occupancy aggressively drives savings and payback.
- Effective passive dehumidification solutions lengthen payback but save furniture, walls, carpeting and guest/occupant health.
• Less than three-year payback IS feasible across the United States.
Telkonet has assessed that aggressively-performed passive-dehumidification does lengthen payback, but it helps prevent furniture and carpet damage due to mold and mildew.
Electricity rates have a deep impact on EMS payback time and operating costs, especially given that its cost consistently rises. This is especially true for properties using occupancy-based thermostats controlling PTACs and PTHPs, where project paybacks of less than two years have been found in the cold, hot, or even moderate temperature ranges of the country. Additional long-term operating costs can be obtained via integrations with guestroom door locks, and PMS (property management systems) and BMS (building management systems) to capture additional room vacancy opportunities resulting in less HVAC use.
EMS payback times are favorable any time you reduce energy consumption, even with the low natural gas rates found in the moderate temperature range. And because electricity is inefficient compared to natural gas, payback time is always shorter than natural gas regardless of the temperature range. The integration of a property management system and a building management system increases payback.