Founder, CEO and CIO of HGM Fundmanaging investments in the financial technology, health technology and communications sectors.
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Because record inflation keeps costs high and interest rates escalate, we all feel enormous financial pressure. On top of that, the prices in the first half of 2022 rose far above expectationswhich puts pressure on budgets. At the beginning of 2023, no one is quite sure where the market is going.
Typically, people look to the government for guidance during economic uncertainty. However, companies can play a more prominent role in driving deflation of the economy.
We know that less demand leads to deflation. For instance, gas prices plummeted during the pandemic because everyone was forced to stay at home, which drastically reduced the demand for gas. So we can apply the same logic to things like energy costs, giving companies the opportunity to make positive changes in the economy.
Here are four energy-saving strategies that companies can apply to their operations.
1. Choose a “work anywhere” model.
Many employers have brought people back to the office now that the pandemic has eased. However, if we were to move to a hybrid model or even go completely remote again, it is safe to expect a fall in energy prices. If there are few or no people in the office, less energy is used for computers and lamps, for example. In addition, the costs of heating or cooling a large building can add up, especially depending on the outside temperatures. So if employees mainly worked from home, the need for temperature control in office spaces would drastically decrease.
2. Optimize HVAC systems.
For businesses that can’t go the distance, a greener heating and cooling choice is one way to support energy cost deflation. One option is to add variable refrigerant flow to an office building’s HVAC. This is possible reduce energy costs by making the HVAC meet the individual needs of each part of the office economically. Other ways to reduce HVAC energy costs include keeping track of routine maintenance, regularly replacing air filters and using wireless climate control technology.
3. Consider solar energy.
Put your roof to work. If you have a detached office building and the ability to make large-scale changes to it, consider adding solar panels. While the cost of switching to this type of energy can be high initially, the amount you can save on energy will put that money right back in your pocket.
While there aren’t many easy-to-find percentages around business savings, we do know that homeowners save more than $25,000 on average over the life of their solar energy system. Considering business use more energy than homes, it only makes sense that their energy savings dwarf those of the average homeowner.
Energy costs vary by location, but there can be even more profit to be made if a company can sell the excess solar energy back to utilities via net metering. In addition, some states have tax breaks and incentives for solar panel installation.
4. Use smart electronics.
Much of America used smart meters to record the power consumption. Since 2006, this technology has been helping customers pay for the energy they actually use, rather than an estimate. As we have advanced, technology like smart thermostats was created to help us adjust our energy consumption to save money and power. With these devices, companies can wirelessly control the climate in their company anywhere and anytime with their computer or smartphone.
Companies can also fight vampire energy—electricity consumed by electronics even when they are turned off. In addition to unplugging things like lights or computer screens when they’re not in use, companies could invest in smart plugs, devices that monitor and control the energy usage of all connected electronics.
We all have to do our part.
The government is trying to reduce inflation, but the process can be difficult and lengthy. Historically, too fast or too high interest rates have led to recession and widespread unemployment. Nobody wants unemployment to rise, so business leaders must do our part to reduce our spending and energy consumption. If we can commit to these savings, we can lend a hand in curbing inflation.
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