A lot has been promised in terms of return on investment (ROI) for a smart building, mostly in presentation or in intangibles such as improved user experience. We believe in proving it in both cost saving & carbon reductions.
With the concept of smart buildings becoming increasingly popular. Buildings, equipped with advanced sensors, automated systems and interconnected devices, promise a future where energy efficiency and sustainability are not just buzzwords but achievable goals.
One of the key aspects of this technological evolution is the ability to work out energy usage data on a per-device basis and implement automated changes. But what does this mean for the return on investment for businesses and property owners? Let's delve into the transformative impact of these innovations.
Understanding Smart Buildings
A smart building integrates various technologies to enhance the efficiency, security and comfort of the environment. This includes the use of the Internet of Things (IoT), Operational Technologies, artificial intelligence (AI) and data analytics to optimise operations. Central to this ecosystem is the ability to monitor and control individual devices, from lighting and HVAC systems to office equipment and appliances.
The Power of Individual Device Energy Data
Traditionally, energy management in buildings has been a holistic process, where overall energy consumption is tracked. However, this approach often overlooks inefficiencies at the micro-level. By having energy usage data per device, facilities management can gain granular insights into where and how energy is being consumed. This allows for:
· Identification of Energy Hogs: Certain devices or systems may be consuming more energy than necessary. Identifying these energy hogs can lead to targeted interventions, such as upgrading to more efficient models or altering usage patterns.
· Preventive Maintenance: By tracking energy usage, it’s possible to detect anomalies that may indicate a device is not operating correctly. This enables proactive maintenance, reducing downtime and extending the lifespan of equipment.
· Informed Decision-Making: Detailed energy data empowers managers to make informed decisions about energy conservation measures and investments. For example, knowing which devices consume the most energy can justify the cost of replacements with more energy-efficient models.
The Role of Automation
Automation takes energy management a step further by implementing changes based on real-time data. Smart building systems can automatically adjust settings to optimise energy use without human intervention. Here’s how automation enhances ROI:
· Dynamic Energy Management: Automated systems can adjust lighting, heating, cooling and other systems based on occupancy, time of day, and environmental conditions. For instance, lights can be dimmed or turned off in unoccupied rooms and HVAC systems can be regulated to maintain optimal temperatures only in areas where people are present.
· Peak Load Management: Automated systems can reduce energy consumption during peak hours when electricity rates are highest. This can be achieved by temporarily reducing the usage of non-essential devices or shifting certain operations to off-peak times.
· Enhanced Comfort and Productivity: Automation ensures a comfortable environment by maintaining optimal conditions for occupants. A comfortable workplace can lead to increased productivity and satisfaction, which indirectly contributes to ROI by improving employee performance and retention.
Calculating the ROI
The ROI of a smart building can be substantial, but it varies depending on several factors, including the size of the building, the complexity of the systems installed and the current inefficiencies in energy usage. Here’s a simplified approach to calculating ROI:
1. Initial Investment: This includes the cost of installing sensors, control systems, and other smart building technologies.
2. Energy Savings: Calculate the reduction in energy consumption from the baseline (pre-smart building implementation) to the post-implementation period. This can be measured in kilowatt-hours saved and translated into cost savings.
3. Operational Efficiency: Factor in the savings from reduced maintenance costs and extended equipment lifespan due to preventive maintenance.
4. Increased Productivity: While harder to quantify, consider the potential productivity gains from a more comfortable working environment.
5. Environmental Impact: Although not directly part of the financial ROI, the reduction in carbon footprint can lead to benefits such as improved corporate image and compliance with environmental regulations, which can have long-term financial advantages.
Generally, ROI period can be calculated at the early stages and our experience with this suggests in existing buildings an ROI of around 18 months, dependant on the existing infrastructure.
We’ve found in new build properties the ROI generally sits around four to five years, with initial energy savings of circa 20% in year 1 and 10% in the following years using our building tuning process.
Conclusion
Investing in a smart building with capabilities for individual device energy monitoring and automation is not just a trend; it's a strategic move towards sustainability and efficiency. The ability to gain detailed insights into energy consumption and automate adjustments leads to significant cost savings, improved operational efficiency, and enhanced occupant comfort. While the initial investment may be substantial, the long-term benefits and ROI make it a worthwhile endeavour for businesses aiming to thrive in an increasingly energy-conscious world. Showing the ROI to clients and how it will be achieved is essential. We as an industry need to prove our worth.
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