How to Cut Utility Costs in Your Commercial Kitchen
In the wake of the pandemic, times are tough, and every penny counts. While you’re thinking about your food costs, menu strategy, and labor cost and deployment, don’t forget about the money you’re spending on energy and water.
While utility bill figures may vary, if your budget is generally on target, your energy costs will typically be about 3%-5% of sales—which are three to five points that are not profit. For example, a statistically “average” commercial restaurant will be spending about $0.11/kWh for electricity and $1.05/therm for natural gas.
If your restaurant is an average 4,000 square feet, with average volume, in an average climate in the U.S., that will work out in the ballpark of $3.75/sq. ft. annually, or about $15,000/year in electricity and gas.1
For a large full-service restaurant, or a high-volume quick-service restaurant, that total jumps to more than $25,000/year.
What if you could reduce your energy consumption by 20% and drop those dollars to the bottom line? It’s not a crazy goal. In fact, Arby’s (now part of Inspire Brands) initiated its Energy Matters program in 2011 and cut energy consumption at all of its corporate stores by 20%—and earned a 2015 Department of Energy Better Buildings Program Award in the process. To learn more about how Arby’s worked with ENERGY STAR to achieve their goal, read the ENERGY STAR and Arby’s Case Study.
While it is a big project, you can easily cut utility costs with little to no capital.
See how two of the food service industry’s leading experts—David Zabrowski, V.P. at Frontier Energy’s Food Service Technology Center in San Ramon, CA. and Jeffrey Clark, Expert Exchange Director at the National Restaurant Association in Washington, D.C. suggest doing just that:
Steps to Cut Utility Costs in Your Commercial Kitchen
1. MAKE A PLAN
Most operators have a rough idea of what they need to do, yet they don’t take the time to “plan the work and work the plan.” There’s more knowledge and resources available that make saving energy and water easier. Get started on an energy savings project, with tips from the ENERGY STAR Guide for Cafés, Restaurants, and Commercial Kitchens and the U.S. Department of Energy (DOE) standard for new spray valves as of January 2019 is 1.28 gpm or lower. Spray patterns have all been optimized so you’re not spraying longer, just better. You’ll cut your water consumption by about two-thirds compared to traditional valves. For an average operation, that will work out to about $65/year in water and more than $40/year in natural gas or more than $130/year in electricity. For a relatively small investment, you can’t afford not to do it. More information about prerinse spray valves is available from U.S. EPA’s WaterSense program.
5. UPGRADE TO LED LIGHTING
Lighting replacement is a scalable project that doesn’t require a big outlay up front. LED (light emitting diode) bulbs have been around for a while and over the years, the technology has been steadily refined and adapted so that now you can find an LED bulb for just about everything. For example, your ENERGY STAR certified refrigerator or freezer may have LED lighting inside the case.
While LEDs still cost a little more than incandescent, CFL, or halogen bulbs, pricing has substantially dropped as the technology has advanced into more applications.
LEDs today use roughly 70-90% less energy than an incandescent equivalent, or about 40% less than a CFL of similar lumens. Replacing fluorescent tubes in a work area with LED tube equivalents can cut your energy usage there by about 60%. For example, think of every bulb and lamp in your operation—if you’re paying $0.11/kWh, you can figure out how much these LEDs will save you. LED bulbs last years longer than conventional ones and their payback time is short. For information about bulb types and some fixtures used in commercial applications, see ENERGY STAR certified lighting.
6. MAINTAIN YOUR DISHWASHERS
Maintaining your dish machine properly and checking water supply pressure against factory specifications is important to its overall efficiency. Weak water pressure will impact cleaning quality and lead to rewashing, which leads to excessive water and energy consumption. Keep an eye open for overspray, too. Any time you see water/vapor/steam exiting the machine, that’s money flying out in the form of water and energy, as well as extra load on your ventilation. Consider the average conventional (non-energy-efficient) dish machine uses about $3,750/year in water and energy, compared to the average ENERGY STAR certified machine, which uses about $2,250/year. If you’re behind on maintenance, you could be losing about 5% - 10% efficiency, so it’s worth keeping the machine up to factory specifications.
7. CHECK FOR WATER LEAKS
Water leaks can drain your budget, and not only the obvious ones you see in your kitchen. Check your water bills over the past couple years. If you notice a trend of increased water consumption with no obvious reason, call the water company for an inspection. Check for leaks within equipment, or in water lines leading to the equipment. Also, check for underground leaks in the water lines. If you have an outside sprinkler system, check it. One of our experts said a recent project revealed one site was leaking 80,000 gals/year. At an average cost of $1.50 per thousand gallons, that’s $120/year, not counting any structural damage the water might be causing. For comparison, consider an average sized swimming pool (40’ l x 20’ w x 5.5’ d) holds 33,000 gals.
8. SERVICE YOUR HIGH EFFICIENCY FRYERS
Fryers are heavily used daily and their performance impacts both your energy and cooking oil consumption. A typical conventional electric deep-fat fryer uses more than 18,000 kWh annually, so at $0.11/kWh, figure around $2,000/year in energy just for that one appliance. Keep it in good operating shape by having your service agent periodically check it out, along with all the big equipment you have.
When you need to replace the fryer, choose a high-efficiency, ENERGY STAR certified unit. The ENERGY STAR equivalent will save you roughly $260/year in energy costs. There’s an added benefit to the more efficient heat transfer—it’s more even, meaning fewer hot spots and less scorching. The big payback is in oil use. A study by SoCal Gas found oil savings often can be three times the energy savings, adding roughly $780 to your $260 for a total of $1,040/year in savings. ENERGY STAR technology has trickled down in recent years, so you can now find lower-cost ENERGY STAR certified models, meaning you can get the benefits, spend less and accelerate the payback even more.
For additional energy savings information on ENERGY STAR commercial fryers, check out the Product Sell Sheet.
9. LOOK FOR REBATES
When you buy energy-efficient equipment, be sure to get whatever is rebate-eligible to help accelerate your payback. More rebates are becoming available with utilities instituting new programs and new equipment categories becoming eligible in various markets.
The utility company may offer rebates that you apply for, or it may work directly with local dealer/distributors to offer a discount at time of sale. The once popular “downstream” rebates—the ones for which you pay for your equipment, apply for the rebate, and await your check from the utility—aren’t the only game in town. A growing number of utilities around the country are getting into “midstream” programs, where the rebate comes right off the invoice. No filling out forms for the operator and waiting for the reimbursement. With midstream programs, the dealer and utility complete the back-office transaction and the operator doesn’t have to think about it. Check with your utility and encourage other foodservice operators in your area to team up to ask utilities to get onboard. To find available rebates, check out ENERGY STAR’s Rebate Finder and the DIME website.
Additional ENERGY STAR commercial food service (CFS) tools can help you get started on your energy savings project now:
Product Finder: Find and compare ENERGY STAR certified products and see how they stack up.
Dealer/Distributor Finder: Locate and connect with vendors selling ENERGY STAR certified commercial kitchen equipment.
ENERGY STAR CFS landing page: For all information, tools, and resources related to ENERGY STAR CFS.
Email CFS@energystar.gov to be added to the CFS distribution list or for any ENERGY STAR CFS inquiries.