How Your HVAC Can Lower Energy Prices

A more efficient HVAC will inevitably save money, but if your energy management system has the tools to respond to the changing price of energy, you can dramatically lower your energy bill.

    Obviously saving energy will result in saving money from the utility bill, but what’s often overlooked, is the price of energy as dictated by the utility company. Everybody wants to save money, so its important to know the price of the product you’re paying for. Imagine how much you could save if your energy management system could actually factor in fluctuating energy prices, giving you the option to orient the system around reducing your energy bill.

The Basics of Energy Pricing

    Energy prices are not constant. They can be raised or lowered due to several factors. For the energy company, it’s more expensive to operate a heavily strained power grid, so to compensate, they raise prices during peak hours of energy usage. These prices are dictated by the total behavior of the power grid. Prices are high when demand is high, and low when demand is low. For a single organization, a large energy load during peak hours will cost more than the same amount distributed throughout the day. Knowing this information is important when trying to save money. For a complete energy management system solution, having an awareness of peak hours and the energy prices associated offers greater potential for saving

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     Peak demand refers to the short period where your building uses the highest amount of energy for the day. In addition to your organization’s total consumption, the utility also charges based on your organization’s individual energy demand. This is because a higher demand puts more strain on the electricity grid. The energy provider treats this strain as an operation expense. Spikes in usage incur higher costs. Not just for the energy consumed, but for the stress that the extra demand placed on the grid. An automatized energy management system aware that high demands are more costly provides further opportunity to bring down your energy bill.
     The most simple, primary way one can reduce their energy bill is to lower their total average consumption. This is just the overall energy consumed in a given time period that comes from regular use. By increasing energy efficiency, that is using less energy to provide the same level of service, total consumption is reduced. Through incorporating comfort and occupancy sensing in a system along with accurate prediction modeling, reduction is an inevitability. These are the type of cost savings generally referenced when mentioning how energy efficiency cuts costs.

Savings of Every Kind

Sensing and prediction, technologies previously explored in our blog, are crucial components of creating a more efficient and effective HVAC system. Together, these will undoubtedly generate savings just by being more efficient, but if you do not include the price of energy in the operation of your system, you are abandoning the full potential of cost savings that can be had with a system. A technology that takes into account the full range of ways utility companies set their prices will offer the best solution to reduce your energy bill. There’s nothing wrong with saving money, so why not save money and be sustainable at the same time?

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