5 min. read
Our Expert Insights series brings you real-world perspectives from our Commercial Markets experts on navigating energy upgrade and transition decisions.
In this video, Clark Longhurst, President of Commercial Markets, details why forward-thinking organizations are incorporating energy upgrade and modernization projects in their annual plans to help reduce costs and meet sustainability goals.
Watch the full video or read the transcript below.
Q: What energy projects are modern businesses pursuing?
CL: My name is Clark Longhurst. I’m the President of the Commercial Markets division for SitelogIQ.
An energy upgrade project could be a variety of different things. With SitelogIQ, a lot of the things that we’re seeing our clients focus on would be [projects] like LED lighting, solar, renewables, battery storage, and EV charging for either their customers or their tenants. There’s also controls and HVAC, and there’s a really wide assortment of things that a client can do to increase efficiency, decrease costs, and make their building more resilient.
Q: Why are leading organizations prioritizing energy projects?
CL: Over the last several years, there’s been a lot of movement from ESG and sustainability and its level of importance. But I think that the underlying merits of energy efficiency and sustainability are still exactly the same [as] they were over the last several decades, which is it’s makes really good business sense.
It also helps the planet. It helps those in in our communities. Certainly, the more energy that you use to begin with gives you probably more opportunities for savings and more opportunities for sustainability.
It’s just a matter of how much are you using, what asset class or asset type are you managing or owning, and what is the appropriate measures that will reduce that and make it the most efficient possible.
Q: What types of businesses should consider energy upgrades?
CL: Really all markets, asset types, building types are all great candidates for energy efficiency and sustainability projects. It’s just a matter of what the goals are for that organization or entity, the time horizon and the measures that make sense.
The cost of power, unfortunately, will continue to rise. There’s a lot of demand being put on our energy grid and our available resources to generate energy are somewhat constrained. So the costs will increase and our ability to decrease those costs will come down to efficiency.
Q: What is an optimal strategy for leaders considering energy efficiency projects?
CL: The big decision for any organization to make is how they’re going to approach their energy efficiency projects, whether they’re going to do that programmatically, whether they’re going to do that as a business function or they’re going to do that in an ad hoc as needed basis.
I will say that we work with a lot of organizations, big and small and have for many years. The ones that tend to have the most success are ones that have a plan, ones that tend to drive programs and not projects, ones that are thinking medium term or longer term as opposed to very short term. The reasons for that is that the cost of those projects actually go down when we increase the volume in the scale and the efficiency of that work goes up. There’s a lot of economies of scale that could be gained by doing things in advance proactively as opposed to when something breaks or when you have a real issue.
In my experience, the smartest business owners and asset owners tend to think proactively in these sorts of situations as opposed to reactively. They tend to have a plan, they tend to get better results. They’re tracking, they’re using economies of scale, and they’re finding efficiencies in the way that they roll these programs out.
Q: What funding options are available for businesses interested in energy upgrades?
CL: Capital is constrained more now than probably it has been since maybe the financial crisis. The good news is there are more opportunities for businesses to still move forward with these great projects even without deploying their own capital.
I’d say that I’ve seen more over the last few years than have maybe over the last decade or so as far as other entities willing to deploy capital into these type of projects. And I encourage really anyone in this space to look into those items.
Q: Can energy upgrade and modernization projects reduce organizational risks?
CL: Energy efficiency and these modernization projects that we at SitelogIQ perform really are not just about kind of an immediate return.
There are a lot of times also just mitigating risk. That could be risk of future utility increases, which are very real. It could be risk of safety and security items when you have a facility with deferred maintenance, getting in front of those items is a way to manage risk. And I think managing risk is always going to be good business regardless of the climate that the business is in at that given time.
Q: What’s a mindset shift organizations should adopt as they plan next year’s capital strategy?
CL: One mindset shift that I would hope that our customers would have as we think about moving into next year and deploying capital of the projects would be to think of these as more important and more core to their business strategy as opposed to nice to have items off to the side.
These are projects that tend to pay for themselves, they tend to improve performance, and the benefits are only captured when the projects are complete. I think the waiting and hoping that strategy tends to not be as successful as acting and implementing.
SitelogIQ is your one-stop partner for energy efficiency, renewable, and electrification solutions. We handle all project steps, from design and installation, through incentive management. Let’s see what opportunities you have to reduce your energy costs and usage.