Knowledge is power, especially when the topic is energy.
During the next decade, the importance of energy at every level of the HVAC game will grow in importance. If you’re a walking, talking source of energy expertise, you’re holding a card that your competitors don’t have.
HVAC company owners and managers are generally expected to be familiar with the energy impact of the comfort systems their firms install. But ask yourself this: What’s your comfort level today if the topic of discussion is short- and long-term energy pricing, procurement, and use?
When planning new construction or renovation projects, building owners and facility managers will inevitably take an interest in the proposed HVAC systems and their impact on a facility’s energy efficiency and bottom line. So it makes sense that most HVAC professionals are adept at knowing the energy efficiency of equipment they recommend. But that’s only half the cost-cutting equation.
There are other factors that need to be considered, and all are valuable to you as a source of expertise when you have the client’s attention.
For example, what type of fuel is being used, and what’s the long-term outlook for the future of that market? How is the energy being purchased? Is the facility getting the right rate from the utility?
Sometimes winning a bid or retaining a service contract is held in the balance by small factors. These peripheral or secondary concerns can, at times, tip the scale in your favor sufficiently to win the bid. Why not add value to your service by knowing how to save your clients money on the price of energy itself, not just the amount consumed? Being knowledgeable in these areas can move you into a position of greater respect: the trusted, valued business ally.
Fuel for the Fire
In commercial and industrial settings, there’s usually little consideration when it comes to the type of equipment installed. It’ll burn natural gas if it’s available. Residential installations typically follow the same track, if possible.
Today, and for the foreseeable future, natural gas prices are low, making it a pretty safe bet. Record production of shale gas, coupled with the fourth mildest winter on record, are helping to keep energy prices down nationally, and the long-term market looks nearly as promising.
Unlike oil, natural gas doesn’t trade as a global commodity, and isn’t likely to in the near future. The technology and processes used to convert natural gas from the ground into liquefied natural gas (LNG) are very costly, limiting the ability to export the energy. Additionally, the regulatory hurdles to develop LNG facilities are massive. This means we won’t be bidding against the whole world for U.S. natural gas reserves.
None of this may be news to you, but what comes next is usually overlooked: How is the energy being purchased?
Some owners and facility managers make an attempt to purchase their energy by choosing suppliers based on published, short-term prices. Short-term savings, if any at all, will be what that buyer gets. Picking the correct energy supplier can be a daunting task in itself. Suppliers should be chosen not only based on price, but contract language, reliability, and financial stability.
For example, local incentives often exist for one type of energy or another, and issues such as meter placement can make a big difference. When adding new load to an existing building, it may be beneficial to hook up to an existing account, as opposed to setting up a new account and new meter. This can have a big impact on which energy rate the owner is eligible for.
There can be a huge benefit to you in bringing energy expertise into the design process as soon as possible. Energy efficient equipment is only part of the whole money-saving equation, so add dimension and value to your relationship with the client with the explanation that energy itself needs to be purchased efficiently to maximize the bottom line.
The Utility Rate
Surprisingly few businesses are even aware of the most important question to ask of the utilities – “What’s the best rate for me to be on?”
If the project is new construction, the transition of the facility from the contractor to the owner is usually hectic, if not chaotic. Many business managers, not knowing any better, simply permit utilities to hook them up to the grid or pipeline, all the while paying for their utilities at temporary construction rates.
Changing the business name on the meter, and the rate at which the new account (gas or electric) is billed, may take a few months in most places. It’s not uncommon, with everything else going on, for the meter to get overlooked. Any extra time on the temporary rate would be a waste of money because construction meters are generally billed at retail/homeowner rates.
We’ve seen extreme examples of this, where companies are still being served on the construction rate many years after occupation. Most company managers aren’t aware that they’re eligible for better rates, and utilities are unlikely to bring it to their attention. This kind of situation would nullify your best efforts to save your clients money on energy expenses.
Knowledge is Power
Knowing more about energy, and the many facets of its procurement and use, places you in an entirely new position when dealing with clients.
In short order, you can move from your already comfortable ground — equipment selection, installation and service — into a role where you may help clients navigate the process of energy purchasing. Ultimately, this lowers costs; your customers will reduce expenses that may have once been considered non-negotiable. Taking it a step further, you may assist them in choosing the best utility plan to be on. And you’ll have learned a few things that may help you improve your own energy-buying. In the process, you’ll gain insight into the energy realm.
Energy efficient equipment is only part of the whole money-saving equation, so add dimension and value to your relationship with the client by taking the cost-cutting process to the next step.
Mark J. Sahd is chief operating officer of Tybec Energy Management Specialists Inc., Litiz, PA. He has more than 20 years of energy industry experience, having served as industrial and commercial sales manager for UGI Energy Services, Inc. in the retail energy market. Tybec Energy (www.tybecenergycom) is an independent energy solutions company. Sahd can be reached at 717/875-6377 or by email at [email protected].
Consultants Can be Valuable AlliesOnly you can judge your own interest and ability when it comes to becoming an energy expert for your customers. If your plate is full enough but you still would like to add value for your customers, consider suggesting the use of an energy consultant. Consultants, or energy procurement specialists, can help your customers through their energy selection and purchasing procedures.
Experienced energy consultants offer the know-how to watch the market and buy energy at the right time. In addition, they wield powerful insights in avoiding costs. A consultant can ward off many headaches and expenses. As allied professionals, their role is similar to other professionals you benefit from working with, such as your banker, accountant, and manufacturer’s rep. The right partnership can be mutually beneficial.
In addition, consider the advantage of bringing their expertise into your own firm. You can save money by using a professional to purchase energy for your shop and offices, just like any other client company. As a bonus, after enough referrals to clients, it’s likely they’ll be willing to do some pro bono work for you. — Mark J. Sahd