One of the major costs that can eat away profits is utility bills. Energy is required for heating units in the winter and cooling the home in the summer. It is also required for working all our digital equipment and for powering our security systems 24/7. Even though we cannot do without energy, we can control how much of it is used to keep the budget under control.
Many property managers have been successful in reducing energy consumption costs and they have managed to improve revenues without any change in the occupancy rate. Here are a few important points to consider for reducing energy costs.
According to studies, multifamily properties consume $22 billion worth of water and energy each year in the United States. A research report that studied certain multifamily properties that were involved in retrofitting, found that the communities were able to reduce their energy bills by 20%, and were able to control energy wastage by 25%. Upgrades that provide better energy efficiency may need sizable investments initially, but they always work out cheaper and more economical in the end.
Certain financial experts are also of the opinion that controlling the existing energy system can work out less expensive compared to a retrofit or upgrading project. Properties that may not have the funds for investing in high-end upgrades can still reduce energy costs by investing a much smaller amount in using existing systems more efficiently. For instance, staff members can undergo a training program that teaches how to keep boiler and HVAC systems running at peak efficiency.
First, property management should have a magnificent understanding about how the energy companies are charging for energy in their bills. The next step would be to curb consumption during peak hours and shifting energy loads. The energy demand on the property can be curbed by installing control system and major loads can be shifted to the off-peak hours. Property management can see a major decline in energy costs by lowering demand charges. However, limiting demand can backfire, when the staff is not able to monitor the consumption closely. Certain energy providers impose huge fines when the plan is not followed exactly.
Implementing policies for improving demand management can provide fabulous and clear dividends. Bills can be audited by a professional auditor or in-house property management staff can be in charge of monthly audits. A team can also be formed for monitoring usage and recommending the required changes.
In case a staff member is in charge of auditing then these things must be implemented:
§ Meter readings should be recorded every month, and these figures should be compared with the billed statements.
§ Keep track of incidents concerning heavy loads for comparing off-peak and peak demand charges.
§ Keep a look out for new charges and inappropriate fees.
§ Check current rates as per the contract and verify the cost per unit is being charged accordingly.
Check the calculations and computations on the bill to see if it is done as per the contract, and their accuracy as well.