Issue link: https://nebusinessmedia.uberflip.com/i/1318165
OTHER VOICES Grocery industry offers energy-efficiency model By Christopher Recine I s efficiency important to you? For many, the answer is yes. Most companies over the past sev- eral decades have continuously pushed toward greater efficiency in operations, from automating processes to utilizing customizable software to manage cli- ents, transactions or projects. But, how important to you is energy efficiency? Concerns regarding commercial and industrial energy usage have only risen in importance in the public eye in the past two decades, and conversa- tions around the topic can distract from the actual meaning of energy efficiency. When consider- ing their energy use, some think that the focus is strictly on sustainabil- ity, with corresponding high costs and disruption to current systems. These associations, however, draw attention away from the operational and finan- cial benefits of efficiency projects. The grocery-store sector offers Connecticut businesses a model from which to understand the value of ef- ficiency. Traditionally operating with thin margins, this industry reflects the gains available from efficiency mea- sures: in terms of sustainability, op- erational improvements and financial benefits. Increased energy efficiency and its associated operational cost savings can lower most commercial/industrial util- ity bills by 15% to 30% or more. A key aspect of viable and significant cost savings is the design of the ef- ficiency project. If a company pursues the cheapest efficiency solutions avail- able, the result does not lead to long- term, highest-possible savings. In Connecticut specifically, pursuing the cheapest option frankly doesn't make sense because of how much a project cost can be covered by utility incentives. Additionally, projects yielding the highest efficiency usually involve multiple savings measures, e.g. light- ing and refrigeration. When a project encompasses several energy-efficiency measures, incentives increase signifi- cantly, as do energy and cost savings. The state of Connecticut offers great opportunities for energy-efficiency projects due to the sizable incentives provided by utility companies — some of the best across the country. These programs provide funding for energy- efficiency projects, sometimes covering up to 75% of the project cost. In Connecticut, the grocery/super- market industry has a lot of success with efficiency projects and provides a model for other businesses. Combin- ing high annual savings projects with a 25% out-of-pocket cost, energy projects consistently deliver a one-year (or bet- ter) payback – greater than 100% ROI – while improving store aesthetics and the overall shopping experience. The grocery industry provides a strong case study for discussions of energy efficiency due to its histori- cally low margins. This means that any decrease in overhead costs can have large, visible impacts on overall profit- cost analysis. In fact, the online trade publication Supermarket News reports that "every dollar saved in electricity costs yields the same profit impact as boosting sales by $18." I recently developed a project with a leading grocery chain, targeting five Connecticut locations and encompass- ing three separate energy-savings mea- sures: lighting, HVAC and refrigeration. The combined savings resulted in over 5 million kilowatt-hours and 47,000 therms saved annually. The client will see a $2 million decrease in operational costs. The $2.3 million utility incentive meant this project resulted in a 0.8 year payback, or 125% ROI. If we apply the above referenced profit formula, this means the $2 million decrease in opera- tional costs would equate to $36 million in revenue for these stores. While this example may seem "easier said than done," the path to pursuing high efficiency and multi-measure energy projects is doable if you carefully review your energy usage and tailor projects based on facilities' specific needs. Christopher Recine is a sales engineer for energy efficiency consultant Fairbanks Energy Services. Christopher Recine EDITOR'S TAKE Reflecting on an unprecedented 2020 A year unlike any other." It could be the title of a Hollywood movie. It's even a bit cliche. But that's the fitting headline of Hartford Business Journal's final print issue of the year for a series of stories highlighting the challenges five Connecticut leaders faced in 2020, shepherding their respective organizations through a once-in-a-century pandemic. As we head into the final weeks of 2020, it's a good time to reflect on a year that brought much pain to individuals and businesses. A health crisis quickly turned into an economic and social crisis, the likes of which none of us had previously experienced. As COVID-19 vaccines begin to roll out in Connecticut and across the country there is much hope for the future. We simply must be patient and cautious before we get there. 2021 should be a year of economic recovery and return to some level of normalcy. Until then, here's a look back at 2020. The good Connecticut's healthcare industry has shown remarkable resilience in dealing with the pandemic. Frontline workers have put their lives on the line to help patients severely sickened by the disease, and hospital systems bent but did not break even as their resources were stretched thin during the spring surge in COVID-19 cases. As we head into a second wave this winter, hospitals are better prepared to handle and treat the virus, though the challenges they face are no less daunt- ing. Many businesses, too, have suffered this year. However, Connecticut employers — many kept afloat by potentially forgivable loans from the federal Paycheck Protection Program — have displayed incredible ingenuity to survive and even thrive during the pandemic. Many companies this spring moved to a remote work setting practically overnight, pivoted to new products or services and found others ways to make ends meet. That Yankee ingenuity was inspiring and will be needed more than ever in a post-COVID world. Workers, too, deserve credit for juggling various responsibilities this year, including, at times, both child care and work simultaneously. The bad More than 260,000 Connecticut residents lost jobs in April; we are still down about 90,000 jobs for the year. More than 600 restaurants are estimated to have closed in the state since March. Connecticut's economy shrank a historic 31% in the second quarter. Meantime, 5,000 residents and counting have died of coronavirus in the state. These are all grim numbers that reflect just how devas- tating COVID-19 has been on Connecticut, the country and world. Looking ahead A bright spot as we head into 2021 is that vaccines will start to be distributed in the state in a matter of days, and Connecticut has been on a slow but consistent economic recovery for months. At the same time, Connecticut's short-term finances remain OK, unlike many other states, because we built up a $3-billion rainy day fund. Congress also appears to be getting closer to passing another stimulus package that will provide much-needed capital to small businesses hit hardest by the pandemic. If we force businesses to close down during a pandemic, the government has a responsibility to provide them and their workers economic relief. Finally, many top local business leaders and economists have a relatively positive outlook for next year, providing further optimism. So let's all finish the year strong, take some time off to recharge and get ready to make 2021 the year of recovery. OPINION & COMMENTARY Greg Bordonaro, Editor www.HartfordBusiness.com • December 14, 2020 • Hartford Business Journal 29 "