Located in Washington, DC
8,750-sq.ft. office space
Annual Cash Savings: $1,900.00
Annual Energy savings: 20,406 kWh
Payback period: 2.6 years
Prevented 82,907 pounds of pollution
The National Small Business United (NSBU) headquarters staff in Washington, D.C., work hard to make sure that members’ dues are invested wisely. NSBU wants to use its funding to maximize support services and to help guide government policy, not to pay for high rent and utility bills. NSBU is not alone in wanting to pay less for rent and energy, for that matter. What small business wants to spend more than necessary for basic utilities like lighting and air conditioning?
Unfortunately, energy costs are often perceived as uncontrollable overhead, when in fact these costs can be managed just like any other expenses or investments. The best time to invest in cost-cutting energy hardware is when space is being renovated — and NSBU could not agree more.
In May 1996, NSBU moved to a new 8,750-sq.ft. office across the street from its old building. Prior to the move, it needed to renovate the new space. During renovation, NSBU’s architect had the option of either reusing and repositioning the existing lighting fixtures or installing new fixtures. Many businesses face the same decision when they renovate. NSBU staff, the architect, and the building management company decided to select and install new energy-efficient fixtures.
Was it the right business decision? NSBU thinks so. Because the fixtures were being removed and installed during the renovation, the only extra cost for choosing high efficiency was the actual fixture price. Normally, upgrades incur labor costs. But in a renovation, there are no extra labor costs for installing high-efficiency lights instead of standard lights.
Second, the new fixtures with silver reflective coatings looked much more contemporary than the old plastic lens ones. Third, the new fixtures actually provided a softer, more pleasant light in the office. These latter two reasons are tremendously important for businesses such as NSBU, where image is important. The new fixtures also produced light that was easy on the eyes for computer-oriented activities.
Finally, NSBU saved money. The new fixture layout was composed of 64, 3-lamp, 4-foot, T-8 fluorescent fixtures; 20, 2-lamp, 11-W compact fluorescent canisters; 13 incandescent exit signs; and a few desk lamps.
The new fluorescent and compact fluorescent fixtures cost about $5,000 but used only 45 percent as much energy as the old ones and have lowered NSBU’s utility bills by about $1,900 per year.
Since the building management company passes all operating costs directly to tenants, such as NSBU, the tenants profit directly from the upgrades. Thus far, about 75 percent of the tenants have upgraded their fixtures, so it’s been a team effort to bring the operating costs down. The payback period on the investment is only 2.6 years, and the internal rate of return is 35 percent, not including any markup that the management company passes on to tenants. That is a great business investment by any measure.