After determining which site is ideal for onsite energy, companies must figure out what energy technology meets the needs and goals of the facility. There are many affordable, reliable and sustainable solutions widely available:
- Gas-powered turbines (including renewable natural gas-powered and wind-powered)
- Roof-top solar, ground-mount solar and carport solar
- Fuel cells
- Geothermal
- Combined Heat and Power
- Bioenergy
- Biomass
- Gas generators
- Battery storage
- Microgrids
Let’s delve into some key considerations and questions that business leaders should ask when deploying onsite energy technologies. You can also hear more advice about choosing the right onsite energy system in the second episode of our Pain Point Series on our podcast here.
Understanding Site-Level Energy Objectives
Before diving into specific technologies, clarifying the primary goals of incorporating onsite energy systems is essential. Different organizations have varying motivations, and these priorities will greatly influence the choice of technology.
Reducing Energy Costs
The most common objective (or deciding factor) is energy cost reduction. This leads companies to choose the option with the shortest payback period or highest IRR. Solar paired with battery storage offers some of the best economics for onsite energy systems with battery prices dropping 19% with every doubling of deployment. However, evaluating the actual cost-benefit requires a detailed analysis of initial setup costs, potential savings, and the payback period for each technology.
Enhancing Resilience Against Outages
Another critical reason for considering on-site energy is to enhance resilience against power outages. Recent hurricanes and extreme weather have highlighted the vulnerability of relying solely on utility power. Technologies like backup batteries and generators can play a crucial role in maintaining operations during outages. However, the choice between these solutions will depend on factors such as the site’s power needs, budget, and the frequency and duration of outages.
Emissions Reduction and Public Image
For many companies, reducing emissions is more than just a regulatory requirement—it’s a component of their brand identity. Installing solar panels or wind turbines can significantly reduce an organization’s carbon footprint. Furthermore, the public relations benefits of visible green energy solutions can be substantial. These installations not only meet environmental goals but also enhance the company’s image, attracting environmentally conscious customers and employees.
Existing Energy Infrastructure and Future Needs
When considering new energy technologies, it’s crucial to take stock of existing infrastructure and future operational needs. Many businesses already have some form of onsite energy generation, which must be factored into the planning process.
Assessing Current Systems
Some companies may already have diesel generators or early iterations of solar arrays. While these systems provide a starting point, it’s important to note that energy technologies have advanced significantly in recent years. Existing setups might not be as efficient or cost-effective as newer alternatives. Thus, a thorough audit of current systems is necessary to identify potential upgrades and integrations.
Planning for Future Growth
Energy needs are not static—business growth, expanding operations, and technological advancements can all impact energy consumption. Therefore, when selecting onsite energy technologies, it’s vital to consider long-term needs. Projections over the next 5, 10, or even 20 years should be factored into the decision-making process. This foresight will ensure that the chosen solutions are scalable and adaptable to future changes.
Key Questions to Ask
The complexity of energy technology selection means business leaders must ask the right questions to guide their decisions.
What Are My Priorities?
Identifying whether the primary goal is cost reduction, resilience, emission reduction, or public image will significantly narrow down the choices. A clear understanding of these priorities will enable businesses to focus on technologies that align with their overarching objectives.
What Resources Do I Have?
Assessing both the physical and financial resources available is crucial. Space for installations, budget constraints, and existing infrastructure all play a role in shaping the feasible options. For example, solar panels require a significant surface area, whereas diesel generators just need space for fuel storage and safe operation.
What Is the Energy Demand?
Understanding the specific energy demands of the site—both in terms of current consumption and future needs—is essential. This includes peak demand times, overall consumption patterns, and potential growth. Detailed energy assessments provide the data needed to make informed decisions about technology capacities and investments.
Evaluating Site-Specific Constraints and Opportunities
The decision-making process doesn’t stop at identifying your energy priorities—it’s crucial to drill down into the specifics of each site to determine the most suitable energy technologies. This involves assessing a variety of constraints and opportunities unique to your location.
Space Availability and Configuration
Space is often a significant constraint when considering onsite energy solutions such as solar panels or battery storage. The type of available space—roof, open land, or parking lots—will dictate the most feasible technologies.
- Roof Space: Does your facility have ample roof space that can support solar panels? The orientation and shading of the roof are also critical factors. If the roof is primarily shaded or poorly oriented, the efficiency of solar panels might be compromised.
- Open Land: For facilities with extensive grounds, ground-mounted solar systems become an option. These systems can take up more space but offer flexible configuration possibilities.
- Parking Lots: Installing solar carports in parking areas is another avenue, despite potentially higher installation costs. This setup not only generates energy but also provides shaded parking for employees or customers, adding an extra layer of benefit.
Battery Storage and Additional Infrastructure
Storage solutions such as battery systems require suitable spaces that often come in the form of shipping containers or specialized rooms. Ensuring you have a location to house these systems is vital.
- Space for Batteries: Can the site accommodate 20 or 40-foot shipping containers required for battery storage systems? Checking local zoning laws and safety regulations is also essential.
- Natural Gas Connections: If considering combined heat and power (CHP) systems or fuel cells, the availability of natural gas connections can be a determining factor in the feasibility of these technologies.
Energy Consumption Analysis
A detailed understanding of energy consumption patterns is fundamental in selecting and sizing your energy technologies. Utilizing interval data is particularly effective.
- Interval Data Monitoring: Analyze your site’s energy consumption in 15, 30, or 60-minute intervals over a year. This data provides insights into peak demand times and seasonal variations, helping to optimize the system design.
- Thermal Loads: For manufacturing or processing facilities, consider thermal energy needs. Opportunities to leverage waste heat can improve overall efficiency and may justify the use of combined heat and power systems.
Economic and Market Conditions
Economic considerations significantly influence the feasibility and ROI of energy projects.
- Energy Pricing Structures: Evaluate your current energy prices, including the presence of demand charges, which can drastically affect the cost-effectiveness of different technologies.
- Regional Incentives: Take advantage of local, state, and federal incentives meant to promote renewable energy adoption. These can significantly reduce upfront costs and improve the ROI of your project.
- Grid Interaction: Understand the opportunities and limitations of feeding excess energy back into the grid. Programs like net metering and demand response can offer additional revenue streams or cost savings.
Identifying Key Stakeholders
To ensure the success of energy projects, it’s essential to engage stakeholders from various departments within the organization.
- Cross-Department Collaboration: Involve teams from finance, procurement, operations, and facilities management to ensure comprehensive alignment and buy-in. This collaboration helps in addressing any potential challenges and streamlining the decision-making process.
Geographic Variations
Let’s consider a company with identical manufacturing facilities in states like Montana, California, and Texas. While the footprints and energy consumption patterns may be similar, the energy solutions will differ drastically due to:
- Energy Costs: Each state has different utility rates, impacting the cost-benefit analysis of the chosen technologies.
- Outage Risks: Areas prone to frequent outages might require robust backup systems such as batteries or diesel generators.
- Renewable Potential: The availability of sunlight and wind varies significantly by geography, affecting the feasibility of solar or wind installations.
- Grid Carbon Emissions: Regional differences in grid carbon intensity will influence the environmental impact and potential incentives for decarbonization.
Facility-Specific Needs
Conversely, a company might have diverse facilities in the same town, such as a food processing plant and an office building. Despite their proximity, these facilities will have varying energy needs and constraints:
- Energy Intensiveness: A food processing plant may require substantial thermal energy, implying a different solution compared to an office building’s electricity-dominant consumption.
- Operational Hours: Facilities operating 24/7 need more reliable and robust energy systems compared to those with standard business hours.
- Specific Equipment: Some operations may have critical equipment needing uninterrupted power, necessitating resilient backup solutions.
By understanding these nuances, companies can tailor their energy strategies to optimize both cost savings and operational efficiency. The key is to remain adaptive, continuously reviewing and updating the energy plan to align with changing technologies, market conditions, and business goals.
Different Energy Tariffs and Consumption Profiles
While you might expect two facilities in the same town, such as a cold storage facility and an office building, to have similar energy prices, they could actually be on entirely different energy tariffs due to their unique consumption profiles. This can be attributed to several factors:
- Load Profiles: Different types of facilities have distinct energy consumption patterns. For instance, a cold storage facility typically has a continuous power demand to maintain refrigeration, resulting in a different load profile compared to an office building, which has peak energy usage during regular business hours.
- Tariff Structures: Both facilities might qualify for distinct energy tariffs based on their consumption behaviors. This discrepancy can significantly impact the financial feasibility and optimal choice of energy technologies.
Incentives and Regional Factors
Regulatory and economic incentives play a crucial role in determining the viability of energy investments. Factors such as the Inflation Reduction Act, which offers varied incentives for low-income and energy communities, can create significant disparities. Sometimes being on one side of a border versus the other can make a substantial difference:
- Incentives Qualification: Eligibility for different incentives can vary based on geographic and socioeconomic factors. For example, a facility situated within an energy community may qualify for more favorable terms compared to a nearby facility that does not meet the same criteria.
- Economic Benefits: Understanding these nuances is vital for maximizing economic benefits and reducing payback periods for energy projects.
Tailored Energy Solutions
Identifying the right energy solution involves a finely tuned approach. It is essential to ensure the selected technology aligns with the specific needs of the facility while considering financial returns and operational feasibility:
- Customized Systems: A tailored energy system should be technically and financially designed to match the unique needs and consumption profile of the business. This includes determining the right mix and sizes of technologies and assessing how they will function together.
- Financial Analysis: Perform a comprehensive analysis of both capex (capital expenditure) and opex (operating expenditure) to understand the total cost of ownership and potential savings. Consider not just energy cost savings but also emission reductions and productivity gains from increased resilience.
Case Study: Solar and Battery Integration
Consider a big box store that decided to deploy rooftop solar panels across its facilities. While this is a positive step towards owning energy production, adding battery storage could exponentially increase the benefits:
- Solar Only: A solar-only system might save $36 million over 25 years with a 36% reduction in emissions.
- Solar Plus Battery: By integrating battery storage, the net present value (NPV) could increase to $11.3 million. The energy cost savings might rise to $61.6 million, and emission reductions could improve to 58%.
This example showcases the significant impact of integrating additional technologies and highlights the financial and environmental benefits left untapped when only one technology is considered.
To conclude, selecting the right energy technologies for your site is a complex but crucial process that can significantly impact your organization’s bottom line, resilience, and environmental footprint. It requires a thorough understanding of your specific energy objectives, careful assessment of site-specific constraints and opportunities, and consideration of various economic and regulatory factors.
The key to success lies in taking a holistic approach that considers not just individual technologies, but how they can work together to create an optimized energy solution. By engaging key stakeholders, analyzing detailed consumption data, and staying informed about regional incentives and market conditions, you can make informed decisions that align with your long-term business goals.
Remember, energy needs and technologies are constantly evolving, so it’s important to regularly review and update your energy strategy to ensure it continues to meet your changing needs and take advantage of new opportunities. With the right approach, onsite energy solutions can provide substantial benefits in terms of cost savings, operational resilience, and sustainability, positioning your organization for success in an increasingly energy-conscious world.
