Top 10 Reasons to Operate in a Smart Building


Running a business is exciting. As an entrepreneur, I relish the opportunity to turn my dreams into realities, and creating value for my company and others to the greatest extent possible.

My success is directly correlated with how hard I work, my ability to trust the right people, and smart execution.

To that point, none of us can truly work smart today without housing our businesses in “smart” buildings. A smart building is defined by the Advanced Energy Economy Association as “a facility that leverages information technology to improve system performance for energy savings and operational improvements.”

Per the U.S. Department of Energy, there are over 5 million commercial buildings in the U.S., and over 98 percent of them are under 100,000 square feet. These buildings house the vast majority of our small businesses, yet only 10 percent of them are smart.
The rest are lit, heated and cooled with unitary heating, ventilation, and air conditioning (HVAC) systems controlled by standalone antiquated switches and thermostats.

Here’s the top ten reasons your business should operate in a smart building:

  1. Transparency. Building monitoring software continuously tracks your energy usage at the meter, giving you additional insight into this critical business expense.
  2. Constant optimization. Cloud-based analytics remotely optimize your energy efficiency 24/7. State-of-the-art software (e.g. JouleSmart’s Active Oversight) provides the benefit of having a round-the-clock energy manager without the costs.
  3. Significant savings. HVAC system upgrades can result in savings of 40 to 60 percent of your HVAC’s contribution to your energy bill. Likewise, lighting system upgrades can result in savings of 20 to 70 percent.
    These improvements, coupled with cloud-based analytics and a building management system, may reduce your overall energy bill by as much as 50 percent.
  4. Attractive new incentives. Beyond energy savings, you can earn incentives for exhibiting positive control over your building’s systems. Large incentives are available at the utility, state, and regional grid management levels.
    An example is New York State’s Real Time Energy Management Program, which was introduced in 2016. This program directly compensates buildings that pursue a retrofit based on data, control, and ongoing management.
    By becoming a smart building, you can earn money from these and other incentive programs on a recurring basis for years to come.
  5. Environmental impact. Optimizing your energy use drastically reduces your carbon footprint. This is critical given that small and medium commercial buildings lag in sustainability goals as compared to the residential, industrial, and large commercial sectors.
  6. Mitigated costs. Pioneering energy firms can complete your retrofit at no cost and no risk under a Managed Energy Services Agreement (MESA) and get repaid from the energy savings. There is no down payment, origination fee, or any upfront cost, and business owners are sheltered from performance risk.
    You pay a level billing amount based on what you paid for energy during the prior year. Once the MESA ends, you go back to paying your regular utility company and realize the full extent of your savings for years to come.
  7. Insured results. Smart buildings generally qualify for Energy Efficiency Insurance policies like those provided by Hartford Steam Boiler that secure the cash flows from energy-saving projects. This means that, barring extraordinary circumstances, your returns from retrofit investments can be locked in.
  8. Minimal work required. Engineers, contractors, and financiers will gladly do almost all of the heavy lifting as you seek to become a smart building. At no cost to you, various entities can provide ways to reduce your energy expense by as much as 60 percent.
  9. Inevitability. It is inevitable that your business will operate in a smart building, the only question is when. Municipalities, universities, large corporations, and hospitals have taken advantage of these innovations for decades. The accessibility of no-cost smart building retrofits has finally reached the small business community, and it is here to stay.
  10. Trustworthy assistance. Even if you do not know everything there is to know about cutting-edge building science, green contracting, and energy finance, you can trust people alongside you who do know about these things.

A great place to start is the Queens Chamber’s Energy Committee, co-chaired by Marshall Haimson of E-Capital Development and myself.

For these reasons and many others, it’s fair to say that smartest aspect of a smart building is not its technology, but the decision to become a smart building from the onset.

James Hendon is CEO of the Energy Economic Development Corporation, a Chamber member with offices in Flushing, Manhattan, and Brooklyn that helps small businesses and nonprofits perform smart building retrofits.

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