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Inexpensive Offerings Driving Deeper Penetration of Efficiency Technologies

Tom Machinchick — March 22, 2017

Technological development is evolving quickly in all areas of the energy efficient buildings market. From HVAC systems with advanced controls to building energy management systems (BEMSs) that can drive deep efficiency gains, it is possible for commercial buildings to reduce energy consumption by up to 50% or more in a well-conceived project. Software has become a ubiquitous and necessary piece of almost every building component.

Most connected, intelligent devices of all types were devised to accomplish a defined purpose while gathering volumes of data along the way. But according to IBM Research’s Global Technology Outlook 2015, 90% of the data collected in the 10 years prior to 2015 was abandoned. Additionally, 60% of sensory data collected at the edge of intelligent systems loses its value in milliseconds. Like the parable about the tree falling in a forest, if these advanced digital tools collect data but nobody uses it, does it really add value? It may … eventually.

Early Adopter Phase

A large segment of the overall building stock is still managed using older technologies, with little or no digital data to support efficient operations. Some building owners and operators have the necessary sophistication and resources to proficiently understand and utilize more advanced digital toolsets, while many others do not. It is still the early adopter stage for much of the sophisticated new technologies. This dynamic, however, is feeding other emerging trends on the energy efficient buildings landscape.

So many buildings operate inefficiently that even the most basic forays into gathering data and understanding operational efficiency can lead to significant savings. Many of the initial efficiency activities can also be done at low or no cost by simply understanding operational setpoints and other characteristics. This simple understanding can lead to energy savings from 5% to 25% or more and provide enough information to lead to more significant projects and savings over time. This trend has been identified as a valid business model in its own right, and it serves what has been recognized as a valid market need.

Innovative Business Models

EnergyAI is an example of a company that offers a no touch analysis of a building’s performance at a very low price point—approximately $25 per report. EnergyAI utilizes a company’s utility interval data and produces a comprehensive report on the buildings energy consumption patterns with a simple, itemized list of suggestions for improvement. Gridium is another company with a similar utility data approach, but with more of an ongoing presence in the building. Eco-Energy works with larger clients and annual energy spending (+$10 million) and utilizes a sophisticated software package, but it sells energy savings, not the software itself.

These business models eliminate large upfront expenditures, work within the resource and experience constraints of a typical building, and identify meaningful savings at a lower cost. They are also enabling greater penetration of efficiency initiatives in a larger portion of the global building stock. The energy efficient buildings market continues to evolve.

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