Facility and Energy Improvements Save Hospitals Money and Enhance Patient Care Experience

March 23, 2015 by

hospital lightingHospitals have a lot on their plates these days. From the soaring costs of healthcare delivery to the Affordable Care Act and stringent regulatory environment, the healthcare industry is experiencing enormous change. To compound matters, Medicare and Medicaid continue to increase pay-for-performance measures that impact hospital reimbursement rates and revenue.

As a result, hospitals are consistently challenged to do more with less. Most available revenue is reinvested into medical equipment and technology that allows them to offer enhanced patient care. Because of these circumstances, facility needs are traditionally a very low priority for hospitals. Most “operate to fail,” only fixing or upgrading when something breaks or negatively affects patient or employee satisfaction.

However, more innovative hospitals are starting to change their approach to facility enhancements. They are realizing that upgrading their HVAC, lighting, and other facility maintenance can dramatically improve energy efficiency, which leads not only to reduced energy costs and budget relief, but also helps create a more comfortable, safe, and healthy physical environment that can enable better patient outcomes and help survey results.

According to an article in MCD (Medical Construction & Design) Magazine, hospitals rank among the most energy-intensive types of buildings. In fact, the U.S. Department of Energy (DOE) says acute-care hospitals use more than 2.5 times the energy per square foot of a typical U.S. commercial building. Also according to the DOE, hospitals collectively spend more than $5B annually on energy, so a 30% improvement in energy efficiency would yield about $1.5B a year in value for the U.S. healthcare system.

While energy consumption can vary based on a number of factors, the U.S. Energy Information Administration (EIA) estimates that as much as 70% of a typical hospital’s energy use goes to lighting and HVAC. The good news for hospitals is that there are many energy efficiency measures for these areas that can be implemented with little to no upfront capital costs and can provide excellent return on investment, often paying for themselves many times over the life of a typical hospital. There are also creative financing solutions available that guarantee energy and operating savings that can then be used to fund the energy improvement project without impacting the existing budget.

Lighting and HVAC upgrades and integration

Indoor and outdoor lighting upgrades using LED technologies use significantly less energy, require less maintenance, and offer better lighting and increased safety. On average, lighting replacemehospital energy improvementsnt can reduce lighting costs by an average of 38% in a typical hospital.

More importantly, lighting upgrades have been shown to improve the care environment for hospital patients. Various studies show that patients with greater exposure to daylight perceive less pain, require fewer medications, and check out sooner than patients whose exposure to natural light is limited. Lighting automation and controls, such as daylight harvesting, can reduce energy costs as well as maximize the amount of daylight in patient rooms and common areas, and supplement outdoor lighting with artificial lighting to maintain consistent and ideal lighting levels.

HVAC also places large demands on a hospital system’s energy budget and can also play a critical role in creating an improved healing environment. Modern HVAC technologies can help hospitals maintain optimum indoor temperature, air circulation, and humidity levels and address such issues as indoor air quality (IAQ). The Center for Health Design found 120 independent studies linking IAQ and other physical factors to the incidence of hospital-acquired infections, which contribute to about 75,000 deaths per year in the U.S. according to the Centers for Disease Control. Integrating lighting, HVAC, and automation controls allow these critical systems to work together to maximize energy efficiency and create an optimal indoor environment.

Energy Assessments

The MCD article suggests that hospitals looking to develop an energy-efficiency strategy should start with a comprehensive energy audit from a qualified energy services company. This will provide the hospital with vital information about building performance, uncover all energy-efficiency opportunities, and ensure the building systems are operating effectively and efficiently.

Saving energy by improving lighting and HVAC technologies and integrating controls provides an excellent opportunity to reduce costs; improve environmental performance; and create a better place for patients, medical staff, administrators and visitors.

Read the complete MCD article to get more details on how hospitals can raise the bar on energy efficiency and patient care through lighting and HVAC enhancements and integration.

Mt. Lebanon, PA Exceeds Projected Energy and Cost Savings

March 16, 2015 by

For many local governments today, sustainability is top of mind. Not only does energy efficiency have a positive environmental impact, it also prompts major facility improvements and helps offset the rising costs of utilities and operations.

Municipality of Mt. Lebanon Energy EfficiencyMt. Lebanon, PA is no exception. Conserving energy is a priority for this Allegheny County municipality located just south of Pittsburgh.

According to a recent article in mtl magazine, the community magazine of Mt. Lebanon Municipality, officials commissioned a comprehensive energy audit of all their publically owned buildings in 2012. They received a number of recommendations that guaranteed they would save energy and cut operational costs or they would get their money back from the energy vendor. With an offer like that, Mt. Lebanon couldn’t refuse!

The plan was to make energy upgrades to seven buildings including the municipal building, public library, public safety building, and recreation center. Total cost was projected at $2,473,325 and the guaranteed energy and operational savings of $2,719,161 over 15 years was more than enough for the project to pay for itself. There was no upfront capital required and no increase in taxpayer burden.

The first changes were implemented in the summer of 2013 and included:

  • HVAC upgrades and retro-commissioning
  • Installation of building automation controls
  • Use of high-efficiency LED lighting
  • Air/water balancing

It’s been a year since the upgrades were made and Mt. Lebanon has reported some amazing results. First year savings were estimated at $199,747 but actually topped out at $325,891 — more than 60% over the original savings projections! To date Mt. Lebanon has also been able to reduce electricity consumption across the board by 17% and natural gas consumption by 19.8%.

The improvements were made possible for Mt. Lebanon through Pennsylvania’s Guaranteed Energy Savings Act, a performance contracting program that was passed in 2010 to promote energy efficiency in state and local government buildings as well as create jobs and stimulate economies.

Mt. Lebanon has more improvements scheduled for 2015. Read the original article here.

More than PR, Corporate Sustainability Drives Profit

March 7, 2015 by

Sustainable ProfitsMost corporations today proudly state they have sustainability initiatives. However, while most executives know being environmentally responsible is good for community and public relations, they don’t realize just how directly sustainability can affect revenue.

In a recent Greentechmedia.com article, they identify nine ways sustainability drives profits and why company executives just might want to redefine their approach to being green in Corporate America:

  1. Lower Costs — Reducing energy use, upgrading to LED lighting, micromanaging peak power, and using uninterruptible power supplies (UPS) help dramatically reduce utility costs. Intercontinental Hotels says it is saving $30,000 a month at two San Francisco hotels by micromanaging peak power.
  2. Increased Revenue — Green buildings command higher rents and higher occupancy rates for building owners and managers. A CBRE survey in San Diego found they commanded 18% higher rents and 88.3% occupancy rates vs. 84.3%.
  3. Higher Capital Value and ROI — Higher rents and lower turnover rates mean higher capital values that can average 10.9% for new buildings and 6.9% for older ones.
  4. Leveraging Broadband Investments — Smart grids can reduce the impact of power outages and downtime, improve response time for increased productivity, and allow customers to better manage growing demand and peak loads.
  5. Brand — Sustainability strengthens retailer brand reputation by as much as 120% and 75% of retailers say it helps them outperform peers.
  6. Customer Engagement — Initial perceptions set the tone for the entire customer experience and an energy-efficient, well-lit facility can help attract customers and determine how long they stay and spend. Energy efficient lighting can also cut light power consumption by 70% to 90%.
  7. Recruiting — Being sustainable helps attract top talent and is critical to employee satisfaction and retention.
  8. Health & Wellness — An energy efficient, well-lit building is more comfortable, increasing building occupant productivity and reducing health issues such as migraines and respiratory problems.
  9. Data Center Performance — Applying energy efficiency measures in data centers can reduce electricity consumption and cost, free up floor space, reduce real estate costs, extend equipment lifetime, and reduce downtime due to failures. Google says it has saved more than $1B through energy efficiency measures in its data centers.

Read the complete article for more detailed information.

From IPhones to EVs? Apple Wants to Produce Electric Cars

March 3, 2015 by

According to a recent Bloomberg.com article, Apple has secretly been working on an electric vehicle (EV) and is pushing to begin production as early as 2020.

With such a quick timeframe and aggressive goal (automakers usually spend five to seven years developing a new car), Apple is potentially setting the stage for direct competition with Tesla Motors and General Motors, both of which are targeting a 2017 release of an EV that can go more than 200 miles on a single charge and cost less than $40,000.

“That’s the inflection point — the proving ground — that brings on the electric age,” Steve LeVine, author of “The Powerhouse,” a book about the automotive battery industry, said on Bloomberg TV. “Now you have Apple coming in and this is critical mass. Was GM really going to be able to match Tesla? Apple can.”

Apple EVApple, which posted record profit of $18B during the past quarter, has $178B in cash with few avenues to spend it. The Cupertino, California-based company’s R&D costs were $6.04B in the past year, and CEO Tim Cook is facing increased pressure to return cash to shareholders. The CEO has been pushing the iPhone maker to enter new categories to further envelop users’ digital lives with Apple’s products and services.

Also according to the article, Apple has been assembling an automotive team for the project by aggressively poaching employees from A123 Systems, a Waltham, Massachusetts-based battery maker. Apple has also hired battery experts from LG Chem, Samsung Electronics, Panasonic, Toshiba, and Johnson Controls. And, Tesla CEO Elon Musk told Bloomberg Businessweek that Apple was seeking to hire away his workers, offering $250,000 signing bonuses and 60 percent salary increases.

Apple is following the same path with EVs that it has taken with other products when breaking into a new industry. For example, the company wasn’t the first to make a digital-music player or smart phone; it only entered those markets once it had a product that redefined those categories.

Some parts of the automotive industry seem unfazed by Silicon Valley’s increasing interest in the market and even view it as a positive thing.

“We’re not afraid of these new competitors,” said Volkswagen AG Chief Executive Officer Martin Winterkorn. “The opposite is true: they encourage us to look more intensively into the chances of the digital world.”

To read the complete story, check out the full Bloomberg.com article.

Keeping Pace with PACE

February 12, 2015 by

Property-assessed clean energy (PACE) loan programs for residential and commercial sectors exploded in 2014. According to a recent greentechmedia.com article, there was nearly $1B available for PACE projects in 2014, with more to come in 2015 as states create new legislation and expand programs.PACE loans

PACE programs allow investments in energy-efficiency retrofits and distributed renewable generation to be paid back through property taxes, which lowers the risk for lenders and owners and creates significant growth for the energy efficiency market. Most of the residential and commercial projects focus on energy efficiency upgrades but a quarter of the commercial projects include renewable energy.

California leads the pack when it comes to PACE. The article, based on PACENow research, states that California completed $500M in residential PACE projects for around 25,000 homes in 2014. The commercial market closed about $100M in completed projects, with another $400M in the pipeline. This was up from about $60M in 2013.

California also has some of the most interesting PACE developments coming in 2015, including legislation that will mitigate the risk to mortgage lenders for losses related to PACE liens in foreclosure situations.

Other states such as Texas, Utah, Illinois, Colorado, and Florida are expected to significantly expand commercial programs in 2015. There are also legislative efforts underway for program expansion in Arizona, Pennsylvania, Kentucky, Arkansas, and Georgia.

Big players in securitizing PACE loans include CaliforniaFirst, who plans to offer upgrades not only for energy but also for water Brandsmart PACEefficiency, and the Ygrene Energy Fund, who operates in California, Florida, and now Georgia. Read how BrandsMart USA in South Dade County, Florida saved 35% on its annual utility costs with no upfront costs through a PACE project with the Ygrene Energy Fund and ABM Building Solutions.

Check out the full greentechmedia.com article to get more detailed information and see a list of states with PACE legislation.