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Securing Energy Incentives Isn’t a DIY Endeavor for Supermarkets

By Published On: February 10, 2016
Securing Energy Incentives Isn’t a DIY Endeavor for Supermarkets

By Leigha Joyal
Energy Analyst, Hillphoenix

Food retail is among the most electricity intensive commercial enterprises, and store owners want to reduce their consumption and their bills. Utilities want to see that happen, too. Containing consumption is more cost effective for utilities than expanding the electric grid. That’s why they have incentive programs that defray some of the costs of adopting energy-efficient technologies. This, at least in theory, is a win for everyone. But in practice, it’s not always a win for food retailers.

The energy incentives landscape

Navigating the incentives terrain takes an investment of time, manpower, and even technical experience retailers don’t always have. Programs differ across utilities, with no uniformity in application processes, approval procedures, or incentive types and amounts.

There’s also a growing trend among utilities to require pre-approval on applications. While some pre-approvals come through in just a few days, others can take as long as a month depending on the scope of the project and the particular utility. This means retailers can’t move ahead on projects or even order equipment without jeopardizing some or all of the incentives they’re eligible for.

Refrigeration efficiency – the extra hurdle of custom incentives

It’s especially complicated when it comes to refrigeration, the area that offers stores some of the greatest potential for electricity savings. Most energy-efficiency refrigeration technologies are considered custom incentives, which increases the procedural burdens for stores. The dollar amount of a custom incentive is based on projected energy savings.  So, a store needs to calculate expected savings for all equipment and technologies and prepare supporting documentation. Utilities review the documentation and often require measurement and verification of “before and after” energy consumption to assess the accuracy of projected savings.

Money left on the table

For any single store – let alone a chain served by multiple utility companies – the work involved in hunting down available incentives, complying with procedural requirements, managing paperwork, and so on is overwhelming. As a result, many stores don’t capture all the funds they’re entitled to or end up not going after any at all. Some might even forgo making energy improvements that reduce their operating expenses.

Any way you cut it, this is money stores are leaving on the table. Add to that the fact that utility customers, food retailers included, are helping to fund incentive programs by paying a surcharge included in their utility bills.

Bridging the gap between stores and utilities

The best way for stores to maximize incentives capture is to partner with an industry expert who can both manage projects and work directly with utilities. This approach not only relieves stores of the burden of going after incentives, it also makes for better coordination of projects that involve multiple utility companies.

There are several companies across the country that specialize in capturing incentives. When we do it for Hillphoenix customers, we provide an ROI analysis based on electricity savings alone as well as with potential incentives, which helps stores understand the cost effectiveness of projects and make informed decisions. We then present the entire project to the utility, explain all engineering calculations, manage all paper work, coordinate site visits, and follow through until stores receive their checks.

Having a utility liaison also helps projects spanning multiple stores move forward efficiently with their respective utility companies. For instance, work begins at sites where approvals have come through quickly, minimizing the impact of the wide variability in utility processing times. And while most equipment and technologies reduce electricity consumption, we make sure to capture all applicable incentives. For example, retrofitting refrigerated cases with doors can reduce consumption of natural gas for heating as well as electricity for refrigeration, and that gets factored in too.

Spurring change

Helping stores reap the benefits of incentives is great. But we are also affecting change within incentive programs by bringing projects customers want in front of the utilities. As the manufacturer of refrigeration and other equipment, we can explain the impact – for stores and utilities – of incentivizing the technology. This enables utilities to do in-depth reviews and engineered savings calculations ahead of new products hitting the market, increasing opportunities for stores while reducing delays and hurdles.

We’re doing that now with CO2 and other natural refrigerants and have gained traction with larger utility companies. Five years ago, adding doors to medium-temperature cases was a newer technology. The case for incentivizing it had to be made again and again. Today, door retrofits are widely adopted by retailers and significantly reduce the load on the electric grid – a win for utilities and ultimately for food retailers.