Founder, CEO and CIO of HGM Fundmanaging investments in fintech, healthtech and communications.
If record inflation keeps costs high and interest rates rise, we’ll all feel the financial strain. On top of that, price increases in the first half of 2022 were much larger than expected, putting pressure on budgets. If we start in 2023, no one is quite sure where the market will go.
Often, people turn to governments for guidance during times of economic uncertainty. However, businesses can play a more prominent role in encouraging deflation in the economy.
We know that reduced demand leads to deflation. For example, during the pandemic, natural gas prices plummeted as everyone was forced to stay home, causing demand for natural gas to plummet. So we can apply the same logic to issues like energy costs, which give businesses the opportunity to affect positive change in the economy.
Here are four energy-saving strategies businesses can apply to their operations.
1. Adopt a “work anywhere” model.
As the pandemic subsides, many employers have brought employees back to the office. However, if we were to transition to a hybrid model or even fully remote again, it is safe to expect energy-related prices to come down. For example, fewer or no people in the office means less energy is used to power computers and lights. Additionally, heating or cooling costs can increase in large buildings, especially depending on the outside temperature. As a result, if employees are primarily working from home, the need for temperature conditioning in the office space is greatly reduced.
2. Optimize the HVAC system.
For businesses that cannot telecommute, choosing greener heating and cooling options is one way to support falling energy costs. One option is to add variable refrigerant flow to the office building’s HVAC. This allows HVAC to economically adapt to the individual needs of each area of the office, reducing energy costs. Other ways to reduce your HVAC energy costs include keeping up with routine maintenance, changing air filters on a regular basis and adopting wireless climate control technology.
3. Consider solar power.
Put your roof to work. If you have a free-standing office building — and are in a position to retrofit it extensively — consider adding solar panels. While the initial cost of switching to this energy source may be high, the amount you save on energy will put that money back in your pocket.
While the percentage savings for businesses isn’t huge, we know that on average, homeowners save over $25,000 over the lifetime of their solar system. Considering that businesses use more energy than homes, their energy savings may be dwarfed by those of the average homeowner.
Energy costs vary by location, but businesses can earn more if they can sell excess solar back to the utility through net metering. Additionally, some states have tax breaks and incentives for solar panel installation.
4. Adopt intelligent electronics.
Much of the United States uses smart meters to record electricity intake. Since 2006, this technology has helped customers pay for the energy they actually use, rather than an estimate. As we progress, technologies such as smart thermostats have emerged that can help us adjust our energy use and save money and electricity. These devices allow businesses to wirelessly control the climate of their facilities from anywhere using a computer or smartphone.
Enterprises can also combat vampiric energy – electronic devices consume power even when they are turned off. In addition to unplugging things like lights or computer monitors when not in use, companies can also invest in smart plugs, devices that monitor and control the energy usage of any electronic device plugged in.
We all have to do our part.
The government is trying to bring inflation down, but the process can be difficult and lengthy. Historically, raising rates too fast or too high has led to recessions and widespread unemployment. No one wants unemployment to rise, which is why business leaders must do their part to reduce our spending and energy use. If we can commit to these savings, we can bring inflation down again.
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