4 Ways Businesses Can Cut Energy Use to Fuel Deflation

Founder, CEO and CIO of the company HGM fundinvestment management in the financial technology, health technology and communication industries.

As record inflation keeps costs high and interest rates escalate, we’re all feeling tremendous financial pressure. On top of that, prices rose far beyond expectations in the first half of 2022, straining budgets. As we enter 2023, no one is entirely sure where the market is headed.

People tend to look to the government for guidance during economic uncertainty. However, businesses can play a more significant role in fueling economic deflation.

We know that lower demand leads to deflation. For example, gas prices fell during the pandemic as everyone was forced to stay at home, which created a drastically reduced demand for gas. So we can apply that same logic to things like energy costs, which gives businesses the opportunity to affect positive change in the economy.

Here are four energy saving strategies that companies can implement in their operations.

1. Adopt a “work from anywhere” model.

Many employers have brought people back to the office as the pandemic subsides. However, if we were to switch to a hybrid model or even go completely remote again, it is safe to expect a drop in energy-related prices. Having few or no people in the office means less energy to power computers and lights, for example. Additionally, the cost of heating or cooling a large building can increase, especially depending on outside temperatures. So, if employees would primarily work from home, the need for temperature regulation in office spaces would be drastically reduced.

2. Optimize HVAC systems.

For businesses that can’t go the distance, greener heating and cooling choices are a way to support deflation in energy costs. One option is to add variable refrigerant flow to an office building’s HVAC. This can reduce energy costs by allowing HVAC to economically meet the individual needs of each area of ​​the office. Other ways to reduce HVAC energy costs include keeping up with routine maintenance, changing air filters regularly, and using wireless climate control technology.

3. Consider solar power.

Put your roof to work. If you have a detached office building—and the possibility of major changes to it—consider adding solar panels. Although the cost of switching to this type of energy can be high initially, the amount you can save on energy will put that money back in your pocket.

While there aren’t many easy-to-find percentages around business savings, we know that homeowners save an average of more than $25,000 over the life of their solar system. Considering that businesses use more energy than homes, it makes sense that their energy savings could dwarf that of the average homeowner.

Energy costs vary by location, but even more could be gained if the company can sell excess solar power back to utilities through net metering. In addition, some states have tax credits and incentives for installing solar panels.

4. Adopt smart electronics.

Much of America uses smart meters to record energy usage. Since 2006, this technology has helped customers pay for the energy they actually use, instead of the estimate. As we’ve progressed, technology like smart thermostats have emerged to help us adjust our energy consumption, saving money and energy. These devices can allow businesses to wirelessly control the climate in their facilities with their computer or smartphone from anywhere at any time.

Businesses can also combat vampire power—the electrical energy consumed by electronics even when they’re turned off. In addition to turning off things like lights or computer monitors when not in use, companies could invest in smart plugs, devices that monitor and control the power consumption of any plugged-in electronics.

We all have to do our part.

The government is trying to reduce inflation, but the process can be difficult and long. Historically, raising interest rates too fast or too high has resulted in recession and widespread unemployment. No one wants unemployment to rise, which is why business leaders must do their part to reduce our consumption and energy consumption. If we can commit to these savings, we can once again help reduce inflation.

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