INSIGHTS | July 06, 2021
Profitability of Supermarket Energy Efficiency Projects
Director of Project Management for Mantis Innovation, Tom Cashman has offered a strong background in energy efficiency during his 5+ years with the team. Specifically, Tom worked in the grocery facilities industry prior to joining Mantis, and this experience has uniquely positioned him to understand how this type of building can benefit from energy solutions. We asked Tom a series of questions to learn more about energy efficiency in the grocery store industry.
What is your experience working in grocery store energy efficiency?
My experience with grocery store energy efficiency is extensive. In years prior, I worked within the energy and engineering group for a leading Grocery Chain based here in the Northeast. For years we focused on energy saving measures as well as controlling systems throughout the facilities. This included monitoring and managing various HVAC and refrigeration systems through a Building Management System.
How have efficiency projects changed for grocery stores over time (or if they have not, why)?
I would say energy projects have not changed much over time for the grocery industry. Grocery stores in general have many systems that account for high energy usage like refrigeration, HVAC and lighting. This has not changed. What has changed is new technologies that help stores in their sustainability efforts. Grocery stores will still undergo retrofits and projects to help decrease supermarket energy consumption.
What should grocery stores know about energy efficiency, if planning ahead for a project?
In my experience, most grocery store chains understand the cost of their utility bills and the large, associated expense of that. I’d say over the past few decades this has come into particular focus in New England due to high electricity costs. For grocery chains located in other, lower-cost areas of the country, they should focus on a plan for improving their bottom line by rolling out energy efficient projects which can lower operating costs. They need to understand that initial spend will be high for new equipment, but utilities are offering incentives which can offset the initial costs. On top of that, the grocery stores could finance through programs that allow for them to be cash positive throughout the course of the project.
Which energy services are best suited for grocery stores?
The best energy services typically entail lighting upgrades, the addition of controls, recommissioning of existing management systems, VFDs, case fan replacement or new HVAC controls, to name a few. Important to a project’s success, energy service contractors or companies (ESCOs) can assist with project roll-outs to ensure effectiveness and proven ROI.
Grocery stores have many systems continuously running, and because of this, energy service contractors like Fairbanks Energy Services can take a comprehensive approach and offer multiple measures to help lower costs and secure a competitive payback period for the efficiency project.
What makes efficiency project management unique when working in the grocery store industry?
I think what makes the efficiency of project management unique within the Grocery industry is the number of systems you might deal with.
As mentioned above, solutions could tackle everything from refrigeration systems to lighting, which can require different solutions and skill sets to engineer efficiency projects across multiple, very different systems. In measuring the effectiveness of taking on multiple systems or projects at once, I recommend always starting with a well-defined scope.
Additionally to the grocery industry (as well as industries like healthcare or hospitality), you have to realize that depending on the installation or measure, you are dealing with customers or support staff potentially at all times.
Which industries, similar to grocery stores, could experience similar challenges and benefits to installing energy efficiency upgrades?
Other industries that could be similar, to a degree, are other retail companies that have lower margins and larger portfolios. The challenge for everybody is usually allocating money for energy efficiency. Often, a capital request might be needed, and depending on location, the cost of electricity may be low enough where they focus on other projects – for example, new ground-up stores to increase revenue or R&D.
The benefits, though, of energy efficiency roll-outs include lowering their costs outright which would improve operating costs. I’d say a primary challenge is getting companies to realize this and for leadership to establish the business case for energy efficiency.
Can you give us 2-3 example stories from projects you worked on that delivered savings for grocery stores?
One example of prior projects that were completed through the energy and engineering group in my previous role with the grocery store chain (before joining Mantis) was the re-commissioning of the building management system. We were able to look back across the portfolio of grocery facilities and adjust set-points and schedules to better automate various system function in multiple stores. On top of this, we ran a case lighting reduction roll-out. Early designs over lit cases that did not need that much light and often in stores that were open 24 hours. This high-use and over-usage example resulted in thousands of saved kWh (and corresponding financial savings) for the store once we implemented energy savings measures.
When I worked as a Project Manager for Mantis Innovation, we also installed a complete lighting retrofit for a local supermarket. We considered all lighting rather than typical troffers or pendants. This differed from other projects because we tackled older technology, not just outdated fixtures. The project resulted in replacing over 1,000 fixtures, a 1.6 year payback on the project and almost $75,000 obtained in a utility incentive to help cover the cost.
Grocery stores and supermarkets have a large opportunity for energy savings due to their long run hours and systems that typically demand high energy use, like refrigeration. Efficiency solutions for the grocery store industry should be designed with attention to both end-use and financial impact.