Energy Efficiency ROI Driving Hospital Facilities to Cut Costs

January 22, 2014

Energy Efficiency ROI Driving Hospital Facilities to Cut Costs

Building managers are increasingly turning to energy efficiency to cut fixed costs at healthcare facilities across the country. Recent studies show that the return on investment (ROI) from energy efficient technology, HVAC systems and lighting drives many in the industry to go green because those investments ultimately save them money.

For most facilities, energy is the largest but most controllable fixed cost. Therefore, it’s no surprise hospital facilities managers want to get a better handle on energy costs. The U.S. Energy Information Administration (EIA) estimated 5.5 percent of the total delivered energy was consumed by large hospitals in 2007.

Moreover, American hospitals consume more than 27 kilowatt hours of electricity and 110 cubic feet of natural gas per square foot, according to a report by Madison (Wis.) Gas and Electric. Hot water, heating and lighting account for some 72 percent of an average hospital’s total energy usage, according to the EIA. Considering healthcare facilities never close, that’s no surprise.

A 2012 Commonwealth Fund report found hospitals that environmental footprint savings can be very achievable and profitable.

If all hospitals took steps to rein in energy costs as those facilities in the Commonwealth Fund report did, the savings could exceed $5.4 billion over five years and $15 billion over a decade while reducing toxic chemicals and waste production.

To look at the numbers another way, every dollar a non-profit healthcare organization saves on energy costs is like generating $20 in new revenues for hospitals, according to the EPA.

Some strategies facilities managers can use at their healthcare facilities to lower energy costs — both big and small — based on the experts and various reports and studies:

For more help with saving energy at your healthcare facility, contact Vanguard Resources.