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Smart Energy Management Systems for Commercial Buildings & Why Your Company Needs One

August 30, 2018 Written by Andrei Klubnikin, Senior Content Manager
It’s a well-known fact that commercial buildings consume up to 20% of the energy produced in the United States annually. Yet, over 30% of all that energy gets wasted through outdated building management technology. Inefficient energy usage has a disastrous impact on property management and maintenance costs and increases the real estate industry’s carbon footprint. Fortunately, there’s a way out. Discover how commercial real estate owners and tenants can benefit from making buildings energy-efficient.

On the Way to Energy Efficiency: Aligning Business Goals with the Latest Technology Advances

As we mentioned earlier, legacy building management systems (BMSs) often let energy go down the drain. What’s more, they’re expensive to deploy and operate: according to Intel, the cost of installing and running a basic BMS can range from $2.5 to $7 per square foot. Subsequently, only large buildings can afford to install a BMS or develop a custom one – and even those cannot cover BMS installation expenses in less than four years. It’s no wonder 90% of commercial property owners and tenants cite ROI limitations as the key factor against investing in BMS solutions!
With the diminishing price of sensors and greater availability of cloud-based IoT infrastructure solutions, however, things might soon change for the better.
The Edge, an Amsterdam-based building enhanced with 28 thousand sensors and LED panels, uses 70% less energy than a typical office building of that size. The David & Lucile Packard Foundation building located in California is almost entirely made of recycled materials, collects solar energy through photovoltaic panels and has a complex rainwater harvesting system. London’s One Embankment Place building reportedly helps its tenants cut electricity and water bills by 221% and 33%, respectively.
The Edge is one of the world's greenest and smartest commercial buildings Efficient heating, air conditioning and lighting do help businesses reduce energy consumption, optimize property management and maintenance costs, lower greenhouse gas emissions and thus contribute to fighting climate change.
The question is, should your company take the smart approach to energy management?

Types of Energy-efficient Commercial Buildings & Technologies They Incorporate

Today commercial real estate is available in a variety of forms including:

  • Standard buildings, which are designed to meet basic energy efficiency requirements; standard buildings make up almost 90% of all commercial property in the United States.
  • Low energy buildings, which consume roughly 50% of the energy utilized by standard buildings; the effect is achieved through continuous optimization of HVAC systems.
  • Passive buildings, which reduce energy consumption by up to 75% compared to ordinary buildings and operate self-sufficient heating systems.
  • Nearly Zero Energy Buildings (nZEBs); these are enhanced with renewable energy technologies including solar panels and boilers.
  • Active buildings, which produce more energy than they consume.
With the growing adoption of the Internet of Things, there’s a trend towards increasing complexity of building automation systems (BASs). Powered by motion, temperature, moisture and spatial sensors, by 2020 connected buildings will produce 37.2 zettabytes of data annually (up from 14.6 ZB generated in 2017).
In fact, it is sensor data that makes commercial buildings energy-efficient – as long as it is analyzed and acted upon.
There’s a variety of tools including AWS Symphony Smart Building and Intel IoT Platform which enable companies to collect and process sensor data and keep services running by taking a smart approach to energy efficiency – for instance, detect pipe leakage, automatically turn off the heating in unoccupied rooms or determine whether certain HVAC system components need replacement and take action before a failure occurs.
How do commercial buildings use energy?
However, the price of building and managing a smart BAS solution is directly related to the level of automation and energy efficiency it’s supposed to provide.
Have any questions? Ask our team!
Most of the available IoT-based systems such as the Smart Building Platform installed by ECS at Regent Medical Properties’ medical center in New York incorporate a variety of components including IP cameras, voice assistants, automated parking systems, intelligent LED lighting and connected energy meters.
Obviously, not all of those are associated with energy management – and you surely don’t have to install a comprehensive 3rd-party system or design one from scratch if your property is already equipped with a legacy BMS; instead, you can seamlessly merge smart sensors into an existing solution and address a custom apps development firm to create an infrastructure for it.

Technology-wise, the components of a smart energy management system include:

  • Physical infrastructure (HVAC, lighting and utility systems, sensors and cabling).
  • Cloud-based infrastructure (SaaS solutions enabling fast and secure sensor data storage and processing).
  • Software infrastructure (web and mobile applications supporting data visualization and management, as well as fault detection and diagnostics (FDD)).

From a business perspective, a smart energy management solution should be:

  • Extendible & flexible. Between 2016 and 2018, the global Smart Home market grew by an astonishing 30.2% (or $7.3 billion), and now there’s a plethora of low-cost hardware and software solutions (middleware included) which automate routine processes, take care of home security and facilitate device-to-device communication. The Smart Building market is evolving rapidly, too, and you should be able to enhance the functionality of a connected energy management system as your business grows and new products are released to the market.
  • Cost-effective. Intel claims traditional BMS installation costs can reach $700 thousand per 100 thousand square feet – largely due to detailed planning and complex wiring. The costs of adding smart energy meters and monitoring solutions to a commercial building, on the contrary, are estimated at $0.75 per square foot. Naturally, the construction of an nZEB or active commercial building similar to the Edge (which cost $86 million) will require considerable upfront investments; provided you address a reliable vendor with the relevant BMS or Smart Home software development experience, you can easily upgrade your existing energy management system and immediately reduce energy consumption by 10-25%.
Speaking of value, how could your company benefit from making your office building energy-efficient?

Advantages of Implementing an IoT-based Energy Management System

  • Direct financial returns. By adopting one of the innovative approaches (reactive, preventive or predictive maintenance) to energy management, your company can reduce ongoing operational and leasing costs by at least 20% and – depending on technology and the amount of energy saved – get $0.3-1.8 per square foot in tax refunds.
  • Work environment optimization. Continuous analysis of data gathered through motion, spatial, temperature and light sensors, for instance, allows companies to program their BMS solutions to automatically lower thermostats during periods of inactivity, make windows darken in the sun and utilize office space more effectively. Sophisticated BMSs powered by Machine Learning algorithms can even remember individual users’ preferred settings!
  • Increased employee productivity. Recent studies show that 80% of employees tend to complain about temperatures in the workplace; 29% of those confess taking longer breaks due to poor airflow in the office. Furthermore, inadequate temperatures can have a direct impact on employee output and attendance – and that’s one of the problems you can solve by managing HVAC and lighting systems proactively.
The implementation of smart energy management systems can lead to significant financial gains for commercial property owners and tenants and reduce the carbon footprint of their real estate portfolios.
With inexpensive sensors, greater availability of open-source software components and proliferation of cloud-based data processing solutions, going smart is no longer a luxury few companies can afford – and this can be easily proven by the fact that 90% of property companies seek ways to reduce energy consumption, water use and carbon emissions.
If you don’t want to lag behind your competitors and continue to bear financial losses, make sure to drop us a line!

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