Do Electricity Rates Impact Energy Management System (EMS) Payback?

(PART 2 OF 5)

In general, electricity thermodynamically is a rather inefficient method of heating or cooling. But its supply is available everywhere, unlike natural gas. However, its rate structure is based upon variable cost constraints on its ability to supply. So the more you use it, the more per kWh it costs.

Worse yet, the U.S. continues to catch up on infrastructure upgrades, and that will continue to drive electricity rates up over the long term.

And unlike natural gas, electricity rates are highest where the population density is high, regardless of the temperature across the country.

So in terms of payback for our industry, reducing electricity consumption will definitely shorten EMS payback. And since heating and cooling operating costs are higher compared to natural gas over the long term, a short EMS payback time is not only guaranteed, but will also ensure the best electrical operating savings over the long term!

So, electricity rates do have a deep impact on affecting EMS payback time and operating costs, given its’ cost will continue to rise.  This is especially true for properties using occupancy-based thermostats controlling PTACs and PTHPs, where project paybacks of far less than 2 years have been found whether in the cold, hot, or even moderate temperature ranges of the country. Additional long-term operating costs can be obtained by using integrations with guest room door locks, and property and building management systems to capture additional room vacancy opportunities that result in less HVAC use.

Bottom Line

EMS payback times are favorable for average, or lower than average, natural gas or electricity rates, even in moderate temperatures. Any time you reduce energy consumption you save money, even with the low natural gas rates found in the moderate temperature range. And because electricity is inefficient compared to natural gas, payback time is always shorter regardless of the temperature range.

There are other factors that should be taken into consideration when calculating your EMS payback time. Next time we’ll cover unitary controls and central controls – and the optimum integration of the two.

Meanwhile, get in touch with a Telkonet representative to learn more about how quickly YOUR new EMS will pay for itself:  sales@ or 888-703-9398.