Which technology is best at reducing energy costs?
Published: 02 May, 2024
Stuart Hawkwood, founder of Powerdown220, compares the pros and cons of three different technologies that can help organisations reduce their energy bills and help towards achieving net-zero
Choice overload is the name given to the phenomena where an abundance of choice overwhelms our cognitive ability to make effective decisions. The end result is often no decision at all, or at best a choice that is suboptimal. Businesses making decisions about cutting energy costs may face this dilemma when surveying the options available to them.
There are many technologies out there which have the potential to reduce energy costs. In this situation, it is easier to stick to the more familiar or widely known options, like solar panels, which are now visible on many rooftops, or combined heat and power (CHP), which is backed by government support.
However, don’t let too many choices blind you to the presence of lesser-known alternatives that might deliver more value for money. Voltage optimisation is one technology that can give both solar power and CHP a run for their money and might be able to provide you with a quicker return on investment (ROI). Here’s a summary of what all three technologies have to offer:
Harnessing the power of the sun: solar power
Solar power is a sustainable and environmentally friendly energy source. It harnesses energy from the sun, which is abundant and inexhaustible, in contrast to fossil fuels. Once installed, solar panels generate electricity and although there are maintenance and replacement costs to be considered, the energy generated is free. This can significantly reduce a business’s energy bills and provide long-term cost savings. By reducing or eliminating the need for grid-generated electricity, solar power reduces a business’s carbon footprint, which can be a big selling point for sustainability managers and environmentally conscious consumers.
A major drawback is the high upfront cost of purchasing and installing the solar panels, which can be substantial. This may be a barrier to entry for small and medium-sized enterprises. A significant amount of roof or ground space is also required, which may not be feasible for all businesses.
Another drawback is that as solar panels are reliant on sunlight, energy generation is intermittent. This means that energy production drops during cloudy days and at night, which necessitates energy storage solutions such as batteries, further adding to the costs.
Cogeneration (CHP): efficiency through combined heat and power
Cogeneration systems simultaneously produce electricity and useful heat from a single fuel source, resulting in greater energy efficiency when compared to separate power generation and heating systems. By capturing and utilising the heat that is a natural by-product of the electricity generation process, CHP can reduce carbon emissions by 30 per cent when compared to the separate means of conventional generation via a boiler and a power station.
CHP systems can lead to substantial savings by reducing the amount of energy required from the grid, ultimately reducing energy bills. The reliability of these systems is another advantage, which makes them ideal for businesses with critical power needs like hospitals or data centres.
However, although the government has heavily backed this technology due to these benefits, like all technologies it has some drawbacks and not all businesses can benefit from CHP. The economics and practicality of this technology depend on factors like the facility’s heating and electricity needs, location and access to suitable fuels.
Another factor to consider is the complexity of CHP systems. This means they often require specialised maintenance, which increases the operational cost and the need for skilled personnel. Finally, while CHP systems are efficient, the environmental benefits may be limited if fossil fuels are used as the primary energy source.
Voltage optimisation: the best kept secret?
The most surprising thing about voltage optimisation (VO) is that, just like the science behind it, it is not a new technology. It’s a mature technology that is proven to reduce energy consumption by lowering your supply voltage from the grid to match the requirements of your equipment. This typically results in savings on your energy bills of between seven and twelve per cent, but savings of up to twenty per cent are also possible. In a climate of rising energy bills, it is an effective way of future-proofing your business against increasing costs.
Lowering your voltage to match the requirements of your facility and its equipment also extends the lifespan of that equipment, providing further savings on maintenance.
The compatibility of the equipment is another benefit. Although this article has presented the three technologies as potential rivals, VO is a versatile technology that can be easily integrated into electrical systems, making it suitable for a wide range of businesses and capable of being paired with other technologies like solar power, CHP and other forms of renewable generation.
The key benefit of VO when compared with solar power and CHP is that VO typically offers a rapid return on investment (ROI). With the ROI being between one and three years, it is a very attractive option for cost-conscious businesses. Due to the science of VO, calculating your return on investment is usually a straightforward process and a good supplier should be willing to provide a savings guarantee after having completed a technical survey.
However, it is worth acknowledging that compared to solar power and CHP, although voltage optimisation does result in significant energy savings, it does not match the energy production capabilities offered by these more celebrated technologies. Furthermore, although reducing energy consumption is positive from a sustainability perspective, it is better for lowering costs and its direct environmental impact is therefore more limited.
While solar power and CHP are undoubtedly valuable energy technologies, VO deserves a closer look for businesses who are keen to cut costs. Although too much choice can be overwhelming, it is certainly worth adding VO to the conversation. The guaranteed savings and rapid ROI could make VO the leading choice for businesses wanting to future-proof themselves in the face of rising energy prices and it can be effectively paired with other technologies like solar power too.
If you want to find out how much your business could save from voltage optimisation, you can fill out Powerdown220’s free calculator by visiting: powerdown220.co.uk
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