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Phoenix Energy Technologies Blog

Energy and Smart Building Industry Blog

Enterprise Energy Management: What does it cost?

Thursday January 31, 2013
By: Phoenix Energy Technologies

This post is part of The Guide to Building Management Technologies.

The million dollar question…or maybe not!  There is such confusion around Enterprise Energy Management and what it is, but more importantly what does it cost?  I am writing this to try to help the “what does it cost” factor…

Unfortunately, it is not a direct answer; but I will do my best to address it from as many angles as possible.  First of all, what industry are you in?  If you manage a university, a commercial building or a national retail chain this answer is a bit different!  Second, there are the features and functionalities questions that need to be asked.  Just like buying a car or building a house or purchasing anything that comes with a lot of features you have to decide what the features and functionalities are that you want and/or need.

Some of those features and functionalities might be a necessity.  For example, connectivity – how do I get the information out of my buildings AND COMMAND BACK to my buildings?  Do I need to purchase hardware to do this or is that hardware already in place within my buildings?  If it is not, what are my options and how much does this cost?  This is a topic for another article but know this is definitely an important feature to understand out of the gate!

Then you look at functionality – What tools are built into the system?  How do I get the data out of the system or in some format (i.e. reports) to allow me to see my enterprise clearly?  What is the flexibility for future growth of the system to allow for the integration of new technologies?  Can the system automatically command back strategies to my building once I have established those energy strategies?  Again, many questions that tie to features that can affect your overall cost so make sure you ask yourself the proper planning questions going in to ensure you are comparing apples to apples when looking at pricing!

Adaptive Energy Management - How to Use Your Buildings as a Battery

So back to pricing enterprise energy management systems!  Many universities and commercial high-rise buildings are typically a cost per point. Once you get your features and functionalities list together you will find that a fully installed system should range you around $10-$20 per point or on average $100-$200 per building!  Typically there are minimums for the monthly fee, so depending on your campus or buildings you will pay at least $2000 per month or more.  This range is NOT applicable if your buildings do not already have building control systems and does not include the cost of any additional hardware needed to get the data out of the building control systems and into your enterprise energy management system.  There are companies who can get data out of old proprietary building control systems and if you are installing a new building controls system our opinion is you should ONLY be installing systems going forward that allow you this capability. Ensure ANY system can connect to it in order to have the best GO FORWARD strategy!  Open Systems are available today in many formats so don’t go down the data trap of not having the ability to connect to your systems as you deem necessary – but this too is another future discussion point!

For our national retail friends, they have quite a bit more complexity because it’s much easier to connect a campus style organization like a university or business park than it is to connect thousands of buildings across the country!  The connectivity piece is much more important to your cost question, not only because of cost to install, but time to install – which costs you “lost savings” due to long drawn out deployment.  Many companies have tried to sell into this market with the thought of  “What’s $1000/month for a large national retailer per location – They are the giants of the industry and can hide that into their budgets?”  Here is where knowing your customers is so important – because if you go through the pitch of features and functionality with a retail client and it all sounds great and then you tell them $1000.00/location per month – after they pick themselves off the floor they may just throw you out of their office!

A national retailer, just as in the university or commercial industries, needs to assess what features and functionality they require and all the other proper planning that is needed in order to compare apples to apples.  Once that is in place a national retailer should expect to pay around $30-$55/location/month for just the enterprise energy management system.  The number of stores, features and types of control systems they have will play a role in establishing this figure. If you are a retailer with a very large number of stores – over a few thousand, you should be able to get it down a bit further, again depending on the features.  They will need to add an additional $45-$65/location/month for analytic and monitoring services for an all-inclusive outsourced solution now ranging them from $75-$120/location/month.  Typically we don’t see university or commercial customers looking for fully outsourced solutions but they do ask for supplemental analytics to help drive the value of their investment.  Many companies have found that this type of software gives great transparency but often times the best way to justify the monthly fee of these software platforms is to show the executives who will be funding this purchase an ROI, which means you need to take action on the data, and the only way to do this is to be staffed properly!  Make sure you address that in your plan one way or the other because if you are not using this to drive value for your organization you are missing the greatest feature of enterprise energy management!

I hope this clears up the BIG Mystery of pricing for Enterprise Energy Management Sytems!!