Guide to Reducing Warehouse Electricity Costs

Guide to Reducing Warehouse Electricity Costs

Guide to Reducing Warehouse Electricity Costs

Businesses want to minimize operating costs and boost profit margins by taking reasonable steps that won't impact their operations. When overhead costs rise, one area operations managers can find relief is energy efficiency. Managing energy costs in warehouses can be done when managers lay out a plan and stick to it.

Below we will review ways to reduce warehouse electricity costs. However, in many cases the best strategy is to shop for a better electricity price! Interested to see how you could save money on electricity for your warehouse? Contact Shipley Energy today to learn about our flexible pricing plans.

Primary Uses of Electricity in Warehouses

In the United States, the average non-refrigerated warehouse consumes approximately 6.1 kilowatt-hours (kWh) of electrical energy as well as 13,400 Btu of natural gas each year per square foot. Lighting and heating accounts for more than three-fourths of these usage figures, or 76 percent. Facilities where operators seek to cut down on electrical consumption often target light arrangements and HVAC systems as opportunities to save energy. In refrigerated warehouses, the usage figures rise even higher because refrigeration consumes vast amounts of electrical energy.

Though the costs associated with warehouse operations can run quite high, you often can reduce them significantly with energy conservation. Overall, energy costs account for roughly 15 percent of warehouse overhead. When you do the math and determine how that percentage figure would add up on an annual basis, and then lower that number by two or three percentage points, you can get a clearer picture of how much money might be saved for the warehouse on a year-by-year basis.

How to Reduce Warehouse Electricity Costs

The main challenge for today's operations manager is to figure out how to achieve warehouse energy efficiency without impacting operational efficiency. The key lies in energy usage reduction, which can be accomplished on numerous fronts, from the deactivation of idle equipment to the maintenance of systems and lighting options. Our tips to reduce warehouse electricity costs range from simple to advanced.

Electricity in Warehouses

1. Shut off Warehouse Machines When Not in Use

When it comes to energy, one of the most wasteful habits among warehouse operators is to leave machines running for no reason. For example, a conveyer belt consumes vast amounts of energy during the hours of each day when it needs to remain in motion. However, some operators allow conveyors to run idly for prolonged periods after each work shift, accumulating several hours of operating time each week.

When a machine as large as a conveyor runs on overtime for no reason at all, the annual costs of this wasteful overuse run high for any company. Consequently, this added expense can lead to higher overall supply costs, which can pass down the chain and ultimately impact customers.

If you fall into the habit of allowing machines to run for no reason, you also leave more of a carbon footprint. In an age of environmental consciousness among the public at large, warehouses that fail to keep their emissions under control can earn a bad reputation among consumers. Idling machinery does more than waste energy, as the habit can also lead to higher supply costs and faulty environmental practices.

2. Inspect and Service Your Warehouse HVAC System

An HVAC system can put a huge energy strain on any warehouse. If you manage heating and cooling inefficiently, the costs accumulate on a monthly and yearly basis. Often, people in warehouse management fail to pinpoint HVAC as one of the main causes of spiraling overhead costs. To keep this problem under control, you must manage heating and cooling functions economically and submit the central unit to regular inspections and maintenance.

HVAC systems can also become more costly as they age. As the internal parts start to wear, the system strains harder just to perform its basic functions. If you catch these problems early, you can salvage the system and restore it to its prior performance levels. If you ignore HVAC issues, they could hasten the expiration of the central unit, thus forcing your warehouse to invest in a new and expensive heating and cooling system.

If you manage to extend the life of your warehouse HVAC system and lower its energy consumption by just a couple of percentage points, the savings can add up significantly over an average year.

3. Perform Preventative and Routine Maintenance

Machines that run on electricity consume the energy they need to run properly. As time takes its toll, some machines strain to perform their basic function. If an older machine has not been serviced for a long time — not even for new filters or parts — it could easily consume more energy just to function like it did when it was new. The machine could also be harmful to the environment if wear and tear render the motor incapable of cleanly burning fuel.

To keep warehouse machines in optimal working condition, your warehouse must perform preventative maintenance on a routine basis. Depending on the machine type and the functions it serves, you might need to open the machine up to access the motor and other internal parts. The parts to check during a routine inspection include:

Preventative Routine Maintenance

  • Belts: Needed to regulate the tension on select moving parts. Eventually, the rubber becomes dull and loses its elasticity.
  • Filters: Needed to block out air-bound dirt and provide ventilation for warm engine parts.
  • Oil: Necessary to keep engine parts circulating. A thicker lubricant must be applied to internal moving parts in a machine to prevent the buildup of tension between the rubbing metals.
  • Bearings: Used for certain moving parts but require lubrication in proper quantities to work effectively.

If the belt rubber gets stiff or cracked, the machine is likely overdue for new belts. If the filters become clogged with lint or hairs, you need to clean or possibly replace those filters. If the lubrication is gone, regrease the moving parts. Preventative maintenance can help you cut electrical costs and also prevent costly and unexpected machine failure as your machines run more efficiently.

4. Automate Equipment

To prevent machines from idling or performing unnecessary functions, implement equipment automation in warehouses. This way, a machine will shut down or go into energy-save mode when it is not needed for the operations at hand. This will also prevent machines from consuming electricity while dormant or cycling for no reason.

If possible, program your machines to function only when necessary. Set timers to prevent machines from idling or cycling overnight. If a machine is used only occasionally, take it off energy-save mode and instead program it to shut down completely after a certain number of minutes of disuse. Idling machines and devices can use up a lot of energy, yet the problem often goes undetected despite its effect on billing.

5. Employ Smart Technology at Your Warehouse

In recent years, technology and the internet of things (IoT) have given rise to new energy-saving options that can be employed in buildings and operations of all kinds, including warehouses. With IoT trackers and sensors, warehouses can track energy consumption and use this information to steer clear of peak levels and power surges. In some cases, you might detect high volumes of electrical consumption in places where you would least expect, such as small devices that would seem to run on low amounts of energy.

Employ Smart Warehouse Technology

You also can use smart sensors to track which machines and operations consume the most electrical energy. You can employ this information to determine whether to make cuts in machinery or usage times and also to pinpoint idle uses of inactive equipment, such as tools and machines that are constantly plugged in but rarely used throughout a typical day. By unplugging just a few devices that are either used only occasionally or have long sat dormant, your warehouse could see significant savings that could add up when combined with other saving measures.

6. Install Solar Panels at Your Warehouse

One of the most effective and practical ways to save on electricity is to utilize the greatest source of light and energy known to humanity — the sun. Many companies across the U.S. have installed solar panels on their warehouses to generate natural energy directly from the sun in the daytime. At IKEA, for example, an 8,966-panel solar array measuring 470,545 square feet generates approximately 3,411,600 kWh of energy per year.

During the clear months of the year, solar panels can significantly offset a building's electrical dependency. In some cases, solar panels can eliminate the need for electricity throughout the day and also generate enough reserve energy for nighttime use. Some companies even sell their surplus energy back into the power grid. Solar panels are helping some people live and operate off the grid, and while that might not be possible for a warehouse, solar energy can still help you lower your reliance on the grid.

7. Switch to LED Lights at Your Warehouse

Given that lights are one of the most electrical-consumptive components at warehouses, one of the best ways to save electricity is to switch to LED lights. Compared to tungsten GLS lamps, LED lights use a lot less energy and also last up to eight times longer. As such, you can save money both ways with LED lights, since they do not need to be replaced nearly as often. LED lights also generate less heat than GLS lamps, thus reducing the amount of cooling energy that a warehouse might consume daily.

If your warehouse is equipped with T12 fluorescent tubes, you could save electricity by switching them out with compact fluorescents. Overall, the more you can replace fluorescent lights at your facility with more efficient bulbs, the better it is for your bottom line.

8. Demand Response

This is a way for people to make money by agreeing to reduce their usage during times of peak demand. Companies that agree to participate must pass a yearly test and have an on-site generator that is newer than 2006, but they get paid regardless of whether they actually are called on to reduce their usage.

To receive the benefits, your warehouse would need to curb its energy consumption when requested by your utility. These requests are typically made when power demand is at its peak.

Demand Response

9. Energy Procurement - Shop For a Better Electricity Price

To power up a warehouse and all the machinery within, you want the service of a commercial electricity supplier that will always meet your needs as a customer business. This isn't as simple as just supplying energy. You need a partner that will help you find and source energy in a way that saves you money. With an electrical service provider, it is best to have a range of payment options to choose from, as this shows the provider is willing to work within the needs of each customer. With the deregulation of commercial energy in many states, you now have the option of shopping around and taking advantage of low commercial electricity prices from business electricity suppliers like Shipley Energy. We offer fixed rates that protect customers from price fluctuations within the energy market. This way, you pay the same price throughout your contract, regardless of whether energy values surge during that time frame. We also offer other flexible pricing plans to fit your unique needs. In many cases, shopping for a better price is the best strategy for reducing your warehouse energy costs.

Find out More About Flexible Pricing Plans and Options From Shipley Energy

For more than 85 years, Shipley Energy has been the leading supplier of energy to businesses located in across Ohio, Pennsylvania and Maryland. Whether you run a large or small warehouse, we can help you find more efficient ways to manage your electrical usage and costs. Contact Shipley Energy for more information about our commercial electricity services.

Flexible Pricing Plans From Shipley Energy