Energy Usage in Manufacturing: Immediate Actions to Take a Modern Approach to Energy

In part three of this three-part series, we partnered with Michael Lewis, Senior Client Advisor for APPI Energy, to highlight how the usage of energy in manufacturing is shifting. Michael entered the renewable energy industry in 2006 when he transitioned from the housing construction industry to installing solar systems for big box retailers in California. During that time, Michael oversaw the growth of a turn-key solar and racking innovator from 4 to 50 employees who built projects across California and the U.S. By 2013, he founded his own solar EPC, engaging directly with solar module and racking manufacturers, property management companies, and public works entities, building solar projects across the western United States. After successfully growing his own company, Michael transitioned to the management and development of utility scale solar farms. Michael consulted on over 1GW of utility scale solar farms from land acquisition and feasibility studies, off-taker negotiations, design, permitting, planning, construction, grid synchronization, and the long-term O&M of these assets. Michael focuses on renewable energy, EV infrastructure, and sustainability, is a licensed electrical contractor, and enjoys reading about everything sustainability, technology, and energy related. In his free time, Michael practices hot yoga, runs regularly, makes time to surf, and enjoys getting out into nature. Michael graduated from the College of Charleston in 2003 and resides in his hometown of Richmond, Virginia.

In part three, we are focusing on immediate actions your small manufacturing business can use to take a modern approach to energy.

Are there any additional things you feel a company can and should do to better understand and manage their energy usage? 

If it has not been done already, switching all lighting to LEDs and installing occupancy sensors should be explored first. Many utilities offer programs to pay for LEDs, and the cost benefit is phenomenal. 

As utilities attempt to increase charges through crafty time-of-use charges, it will be a must for facilities to implement some form of sub-metering equipment to view electricity demand in real time to understand peak demand times, the equipment causing demand spikes, and ultimately using this metering equipment to scale back peak demand where possible. 

Are there additional benefits for a manufacturing company to invest in energy management and reduction in use? 

It seems like the buzz words of the moment are ESG (environmental social governance) and sustainability. While some of it feels political, the reality is that a growing number of large entities now put pressure on all levels of their supply chains for some level of sustainability reporting. Regardless of any opinions around renewable energy and sustainability goals, existing rebates and federal incentives often create a great investment opportunity in these technologies. The added bonus is to meet required ESG and sustainability requirements while also hedging future energy costs and, in some cases, saving millions of dollars over the warranty period of the renewable system equipment. 

Additionally, many utilities offer participation in demand response programs. For entities able to participate in demand reduction during peak summer or winter hours, this can be a lucrative program. Participants receive a yearly check of up to $100,000 for participation. In most cases, these entities have back-up energy generation that cuts on during the peak demand hours of day, up to five times a year. In some cases, this is simply switching off or powering down large equipment during peak demand hours, typically 2 to 4 hours. The value of the demand response incentive is dictated by the total amount of power reduced during days of peak demand alerts. As said, this can be up to five times a year, typically a couple of the warmest summer days and coldest winter days. In some cases, we have seen businesses invest in back-up generators for their operations that are financed through these demand response payments. This can be a cost-effective method to ensuring resiliency as utility reliability becomes more of an issue for businesses. 

Where can a manufacturing company start to learn more about the options, solutions, and issues with tackling energy consumption and management? 

In most cases, the local utility company is the first place to look for available incentives. APPI Energy does an in-depth analysis of the energy bills of our customers, then applies our market knowledge to make suggestions for reducing energy costs. In deregulated markets, we provide our customers with a proprietary RFP to all vetted electricity suppliers available to that market, then provide our customers with feedback around which supplier and terms make the most sense for that customer’s operations. More favorable supply agreements are available for electricity and natural gas. For manufacturers contending with sustainability goals, we can run the same RFP process to identify green energy products available in most markets of North America. In this manner, it is possible for manufacturers to “go green” without ever installing a renewable energy system.