Energy Efficiency Solutions for Retail Chains

By Yaniv Vardi

Twenty billion dollars.

That is a lot of money. $20 billion is roughly the Gross Domestic Product of Nepal. It's also rumored to be the annual budget of the NSA. $20 billion also happens to be the value of energy used each year by the retail industry in the U.S. According to Adam Siegel of the Retail Industry Leaders Association, this creates a savings potential in the industry of roughly $3 billion (more than the GDP of Aruba).

At the macro level, a $3 billion industry-wide opportunity for savings (not to mention the potential environmental improvements) is a big deal. Even at the micro level, when we examine individual retail chains, we discover that excess energy consumption in retail can exceed 30 percent of total profits. With solutions that promote energy and operational efficiencies, we can do away with the waste and inject the savings directly to the bottom line.

Forward-thinking retail chains are accepting energy as a strategic asset. And, as such, they are finding ways to manage their energy consumption intelligently to minimize off-hour consumption and wrong building automation system (BAS) scheduling, antiquated technology solutions, poor maintenance and inefficient equipment, and eliminate undetected and resource-intensive failures.

Solutions must be based on visibility, analytics and processes

To combat the energy-wasters within operations, retailers must attain visibility into their energy consumption. Often, we find retail chains that rely only on data provided by the utility company about total energy spend. To optimize performance, we must first uncover information about how each of our systems and devices utilize energy. Only with this level of visibility can we start to understand the core of the problem and work toward a solution.

Retailers must also have access to an advanced analytics system that can aggregate all of the granular device-level energy data. Based on this information, analytics can reveal usage patterns and trends, benchmark sites and identify maintenance issues before failures occur.

Powered by data and insights, retailers can then create processes that leverage this intelligence to reduce consumption across the retail chain (and increase corporate profits).

Device-level data enables ecosystem solutions

For energy efficiency solutions to have a long-term, positive effect on a retailer’s bottom line, they must solve challenges of scale for the entire energy ecosystem. However, to gain the visibility necessary to understand the problems of the entire ecosystem, we must track, monitor and analyze each of its components.

By using wireless sensor technology, we can observe the power consumption per device, per location, per unit of time. With this level of granularity, we can, for example, detect lighting systems or LCD screens which operate after hours, when the store is closed. Retailers that operate a building automation system can be alerted to overrides or poor scheduling of the system.

We can improve operational efficiency of our companies by shifting to predictive maintenance of our systems. That is, instead of investing resources in randomly scheduled maintenance, we can monitor energy usage at the device level and base our maintenance on data that points to an anomaly such as overconsumption, idling or under-consumption. When we optimize our maintenance schedules based on this information, we increase equipment life, decrease maintenance costs and eliminate equipment failures.

Our device-level data can also alert us to equipment that is functioning inefficiently. By benchmarking and comparing similar systems and locations, we can easily identify those which are underperforming, as well as track the effects of any maintenance or retrofitting projects.

Socially responsible retailers

Retail chains of all sizes are realizing the benefits of energy efficiency on their power and light (P&L) systems: By reducing energy consumption, energy efficiency upgrades simply increase profits. But for today’s retailers, energy efficiency is not just a financial goal.  Programs and incentives like ISO 50001 also incentivize responsible retailers. And corporate social responsibility programs that include sustainability, energy efficiency and operational efficiency improvements foster brand loyalty and goodwill -- and prepare our facilities for the future.

Energy efficient retail chains

The $3 billion savings potential for the retail sector is incentive enough for retail chains to start seriously thinking about -- and enacting -- energy efficiency solutions.

But the payoffs go even further than the $3 billion. With solutions that are based on visibility, analytics and processes, retailers are now tracking their energy consumption at the device level, analyzing it and using the insights to understand ecosystem-level solutions -- eliminating waste and benefiting financially, environmentally and socially.

Image credit: Flickr/Random Retail

Yaniv Vardi, Chief Executive Officer at Panoramic Power. Yaniv is a seasoned executive with close to two decades of executive leadership experience in the Enterprise Solution Industry. As CEO of Panoramic Power, he oversees the day-to-day operations of the company as well as provides vision, strategic direction and focused execution for the company.