How can energy management software help make better investment decisions?
Being a business leader means you have to make important decisions on a regular basis, with many of these decisions having a significant financial consequence. When making these important decisions, Directors and Managers normally try to collect as much information as possible to ensure decisions are made based on facts rather than assumptions. When it comes to operational efficiency, energy management software can play a significant role in arming directors and managers with the right data to make the best investments.
What is Energy Management Software?
Energy management software gives business leaders the insight needed to first visualise and then eliminate waste, reducing both costs and carbon emissions. Good energy management software should show any site level meters and any granular level energy monitoring devices. Other data sources, such as production or weather data might also be available within the software.
The insight from energy management software can help inform business decisions and where any investment, be that budget, people or other resources, will be best utilised.
Energy Management Software for better decision making.
Energy management software can help make data-driven decisions at both operational and board level when it comes to energy related investments. These investments can include:
- Onsite energy generation options
- Equipment optimisation or replacement
- Lighting, heating and BMS controls
- Standardised operating practices
So here’s how energy management software can help both directors and managers make the right investment decisions.
Ensure data accuracy.
Incomplete or inaccurate data can lead to bad investment decisions being made based on false assumptions. When it comes to making better investment decisions, gathering the right data and information is an important part of the process, and decision makers need to trust that the data collected is accurate and reliable.
Energy management software helps make data more reliable. System level data validation rules are applied to flag incomplete or inconsistent data, and user interference with the data is kept to a minimum. With the data being available in real time, the data can always be trusted to be up to date.
So when a business needs to understand its latest energy costs and usage, the data is collected directly from meters and invoices, and when combined with energy monitoring sensors, businesses can drill down by zone or asset level.
Gain a greater understanding through comparison analysis.
Being able to compare current and historical data helps provide greater context before a decision is made. Large facilities with different operating zones or businesses with multiple sites benefit from comparing energy data from each site or zone. This is valuable information for decision making, as this data can help determine where a business should prioritise its investment and allocate its budget accordingly.
Energy management software makes the benchmarking exercise simple, with limited ‘offline manipulation’ needed, meaning that a business would be able to identify underperforming sites and/or areas and focus its investment there without relying on someone’s excel skills being up to scratch.
Determine project feasibility and payback on investment.
For businesses wanting to explore on-site generation projects, being able to understand the site’s energy consumption is an important starting point. Having current and historical consumption data will give an accurate picture. This insight will help identify and rule out certain on-site generation projects, narrowing down the best option and investment decision.
For example, if the data shows that most energy consumption is used overnight or in the early hours of the morning, then Solar PV may not be the right choice unless battery storage is also factored into the investment.
Before any decision is made, it’s important to know what the payback period is for any investment. And based on how long it takes to see a return on investment (ROI), a choice needs to be made on whether it is in line with the short- or long-term goals of the company.
Forecasting and Budgeting.
Millions of data points are used to calculate an annual electricity cost forecast, including half hourly data, forecast demand, standing charges, peak demand, unit rates for all wholesale and 3rd party charges, time of use charges, and many other factors.
Doing this without energy management software is one beast of a task, and when that needs to be done for multiple sites, the chances of errors creeping in as the formulas are copied and pasted increase vastly.
With energy management software, these data points are managed in the background, meaning that changes to non commodity forecast unit rates, time of use charges, peak demands, and even wholesale unit rates update in the software platform the instant they are changed across all site forecasts.
Trusting this information is up to date is key when it comes to forecasting the impact additional equipment or efficiency projects would have on their energy consumption and costs, as well as their bottom-line profits. Enabling directors to plan and allocate budgets related to energy projects and investments more effectively, resulting in more accurate costs and ROI estimates.
Once a decision has been made and the investment project is in place, it’s important to continuously review and track progress. This way, any changes can be made before it’s too late, ensuring the investment is maximised.
Energy management software will let you monitor how the investment is performing against costs and consumption over time, so you’ll be able to visibly see the impact of those decisions.
Savings and Reinvestment.
Any savings you make on your energy efficiency investments can be reinvested back into your business or used to fund other efficiency projects. This is a great way to finance energy efficiency projects and is something we discuss more about in 5 Ways to Finance Energy Efficiency Projects.
Energy management software can help empower business leaders to make informed and data-led decisions. If your business wants to access valuable data, analytics and insights to optimise energy usage and costs, cut carbon emissions and align sustainability goals, then speak to us about how we can help. Or learn more about our myenergyManager platform.
Author: Conor Howard, Data Analytics & Reporting Team Lead
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