Record highs have been driving ventilation and cooling (HVAC) costs up this summer, especially for small businesses that pay a large portion of overhead costs for energy. Since HVAC costs generally make up at least 50 percent of any business's energy expenses, investing in energy efficiency is as important as investing in inventory or marketing.
At least that's what Mike Priest, owner of Maranatha Energy Saving Renovations, will tell you. He sees firsthand how investing in efficiency can result in long-term savings.
Priest founded Maranatha General Contractors in 1978, but in 2009, as interest in energy efficiency grew, he became certified as an energy auditor through the Building Performance Institute (BPI), and transformed his business into Maranatha Energy Saving Renovations. Since that time his company has helped small businesses and homeowners realize significant energy savings. In fact, Maranatha recently received an award from Columbia Water and Light for achieving the highest energy savings per home.
"I think we won the award because I am meticulous about air sealing. I encourage my employees to do the best job they can possibly do. We never stop at any job just because it's good enough," says Priest. "The average savings our clients achieve from just tightening up their building and adding insulation is 26 percent. If they decide to go one step further and upgrade their HVAC system, they generally save another 30 percent. It is not uncommon for our customers to reduce their annual energy bills by more than 50 percent."
Priest is also very aware of one of the best bonuses for investing in energy efficiency: utility rebates, offered across the state of Missouri.
"Currently the City of Columbia offers $1,200 in rebates to make your home more energy efficient. They will offer more if you replace your HVAC system with a unit higher than 14 SEER (Seasonal Energy Efficiency Ratio, a standard measure of air conditioner efficiency), or if you install something called dual fuel, which is a combined furnace and heat pump," explains Priest. "The savings with dual fuel are enough reason to invest even without the rebate. For instance, if you replace a 9 or 10 SEER AC and an 80 percent efficient furnace with a 14.5 SEER heat pump and a 95 percent efficient furnace, you could save more than 30 percent on your heating and cooling bills." (For more information on HVAC efficiency ratings and dual fuel, see "Five things to look for in a new HVAC system.")
Maranatha also provides energy audits, spray foam insulation, window and door replacements and full construction services. The company sub-contracts some insulation and all HVAC services. Maranatha also builds Energy Star Qualified homes.
"A 2,500-square-foot Energy Star home will probably cost around $7,000 more than an average home of the same size, but it's an excellent investment," says Priest. "Energy Star homes are about 38 percent more efficient than most homes on the market."
Maranatha also assists small businesses with energy efficiency improvements, explains Priest, who, as part of Columbia's City Green Program, did some renovations for the downtown vegetarian restaurant, the Main Squeeze.
"There was a lot of air leakage in the restaurant since it is located in such an old building. So the owner, Leigh Lockhart, requested that we do some air sealing and replace the windows," explains Priest, adding that he is positive that the renovations will quickly pay for themselves through annual energy savings.
The City Green program, which funds energy assessments and renovations for small businesses in Columbia's downtown District, requires that all improvements have a payback period of 10 years or less. That may seem like a long return on investment to small business owners concerned with the day-to-day bottom line, but energy savings can increase monthly cash flow and buffer against fluctuating energy prices.
"A home or business that makes efficiency improvements will be less impacted by the expected rise in energy prices. By investing in efficiency now, we are protecting our energy future," says Priest.
As for his own future in energy efficiency renovations, Priest doesn't expect to run out of business any time soon. "Folks in this industry know there are millions of homes and buildings in need of energy efficiency improvements. We've just touched the tip of the iceberg."
This story was featured in the July 2012 newsletter