National Cut Your Energy Costs Day: Tips for Businesses

In the United States, January 10 is National Cut Your Energy Costs Day, a time that encourages people to look for ways to reduce energy usage and ultimately save on energy bills.

Melink offers five tips for businesses to cut their energy costs. Implement these solutions today to impact your business’ bottom line in the future!

Melink technician checking air flow in business for energy costs

Tip #1 — Ensure Your Building Has a Balanced Airflow

An air balance testing service is the process by which the performance of HVAC airflow is measured.  Once it is tested, the systems are then adjusted, or balanced, so that the air brought into a building is slightly greater than the air being pulled out of the building. The result is a comfortable, healthy indoor environment with an HVAC system that is optimized to perform efficiently. Read more air balance basics.

Keep in mind there are different degrees of air balance reports and you should choose an air balance contractor wisely. Not every balancing firm performs the same service or provides the same report at the end of the project. Hire a professional, certified firm like Melink Corporation.

Energy costs in busy commercial restaurant kitchens

Tip #2 — Conserve Energy in Commercial Kitchens

If your facility has a kitchen operation, this is an area where you can greatly reduce your operating costs, as well as occupant comfort. Consider installing a demand control kitchen ventilation (DCKV) system to control the variable speed of your kitchen’s exhaust fans.

Traditionally, kitchen exhaust fans run at 100% speed for constant periods of time.  With the addition of a variable speed system, like Melink’s Intelli-Hood®, fan speeds are reduced when cooking isn’t at its maximum. 

Dirty furnace filters can increase energy costs

Tip # 3 — Replace Used Furnace Filters

This may sound like a simple fix, but dirty furnace filters can lead to defective equipment, airflow issues, and ultimately higher energy bills. If a filter is clogged, airflow is reduced and the unit(s) will have to run longer to achieve the desired temperatures. Seasonally changing air filters within your building is one of the easiest, cheapest, and most effective ways to ensure maximum airflow output.

Monitor your building for guests' comfort and to watch energy costs

Tip # 4 — Monitor Your Building

Monitor your building’s health BEFORE a costly issue develops, such as mold growth, high energy bills, safety issues, or comfort issues for occupants. Melink offers PositiV®, a standalone tool to monitor your building’s performance data. A small investment now can lead to a great reduction in future energy costs.

Rooftop HVAC Unit

Tip # 5 — Have a Replacement Plan

Whether your facility has an immediately aging HVAC unit or not, it’s important to plan for the future — especially with the phase-out of R-22. Emergency replacement, AKA “fix-on-fail,” is the costliest way to repair units. If you implement a proactive equipment replacement program, you can save approximately 70% per unit, which adds up to major energy cost savings.

National Cut Your Energy Costs Day may only happen once a year, but Melink offers energy-efficiency solutions for businesses year-round. With Melink, cut your commercial building’s energy costs. Contact us today at (513) 965-7300.

The Advantages of Optical Sensing in Demand Control Kitchen Ventilation Systems

As the inventors of demand control ventilation for commercial kitchen systems over 25 years ago, Melink is solely focused on providing maximum energy savings with safe and reliable controls for our customers with our Intelli-Hood® system. Not surprisingly, we’ve learned a lot of things over these years and continuously improve our controls based on lessons learned, industry trends, best practices, technological advances, laboratory and field research. Our industry leader status makes us a ripe target for competitors and naysayers, to which we welcome and enjoy engaging in a healthy debate to advance the usage of demand control kitchen ventilation across the globe.  To this end, I would like to address a document produced by a manufacturer and a respected goliath in the kitchen ventilation industry. 

*All text in red is directly taken from a Captive-Aire produced document obtained by Melink*

The Captive-Aire Demand Control Ventilation (DCV) system controls the fan speeds based on heat generated from the cooking appliances in comparison to the room temperature. Captive-Aire has done extensive research into the effectiveness and practicality of sensing smoke to override the system and turn on the fans. Melink offers an optic sensor inside the hood, which, if penetrated by smoke, will automatically turn the fans to high speed. This is one of the primary differences between Melink and DCV. 

Melink has performed extensive research over the years into various sensing methods, including space temperate versus hood canopy sensing (delta T) methods, and fallacies discovered in the delta T method is what led us to the patent for utilizing optical sensors in conjunction with heat sensing. Our research uncovered many external factors in the kitchen environment that caused false readings including cross drafts, supply air configurations, door openings and seasonal temperature changes that could trick the system into a cooking response and eliminate energy savings.

Another challenge in the temperature only approach is determining the level of cooking based on these temperature changes alone as the cooking effluent (smoke, steam, etc) often presents itself before a strong thermal plume on the temperature sensor. For example, if you place a cold hamburger patty on a grill the temperature will initially reduce as the heat transfers into the food while creating effluent that must be captured by the hood.  Systems reliant upon temperature only are slow to react to this change and you are left with two options; decrease the temperature range of the system so it runs full speed at the slightest presence of heat (diminishing any energy savings), OR don’t effectively capture the effluent in the hood canopy and cause smoke rollout.  As we at Melink like to say, “You can’t capture what you can’t see.” 

We have found that using an optic sensor to sense smoke is very problematic. When installed inside a greasy exhaust hood, the lens will tend to get caked with grease. This will cause the fans to run at full speed all the time, and therefore eliminate your energy savings. As a result, Melink installs small fans to continuously blow air at the lens to try and avoid grease particles from landing there. This is another component the needs to be maintained and serviced regularly. These optic lenses also require an I/O processor to be wired into the system—this is one more component. If anything happens to the lens, fan, or processor the system will fail. This results in a sustainability issue. Electrical components inside a greasy exhaust hood may not be a sustainable option over the course of several years. The optic sensors/lenses need to be cleaned, and according to the Melink manual, should not be sprayed with hot water or steam by the hood cleaner to avoid damage.

 Yes, our system has a brain and it’s called the System Controller (formerly I/O Processor referenced). All demand control kitchen ventilation systems have some sort of controller to interpret the signals coming in and we like to think our brain is pretty special.  In fact, unlike most competitor systems that utilize an off the shelf PLC controller we custom design ours for the sole purpose of saving you energy in the kitchen and integrating into your building.  Our System Controller is native BACnet(IP), internet ready, 4G wireless capable and has the brainpower to control up to (39) kitchen hoods and (64) exhaust or supply fans. 

We do utilize a component called the Air Purge Unit (APU) that contains a 12VDC fan to direct airflow into the optic housing to maintain a positive pressure environment to alleviate grease buildup.  However, kitchens can be harsh environments and depending on the appliance type underneath these could benefit from a monthly swipe with a clean cloth if it’s above a high grease producing appliance, but less intensive appliances mean less cleaning.  Fortunately, we use that big brain of ours to automatically re-calibrate the optics every day based on cleanliness for optimal performance and if it gets too dirty the system will alert you via the Touchpad or email as to which hood may need cleaned.  

 

Additionally, a typical Melink system costs much more than a Captive-Aire DCV so the payback period for a Melink system is much longer.

Not necessarily; the formula for the simple payback period is the initial project cost divided by the annual savings to determine at what time the investment breaks even. If a more intelligent system can save 3x the energy of temp-only system then the simple payback periods are equal. The downside of this metric is the failure to account for the time value of money and consideration of cash inflows beyond the payback period.  It’s important to look past first cost and take into account the full savings yielded over the life of the system and perform life cycle cost analysis. 

For example:

        Temp-Only System

  • First Cost = $5,000
  • Annual Savings = $1,500
  • Simple Payback Period = 3.3 Years
  • Energy Savings over (7) Years = $10,500
  • Net Savings: $10,500 – $5,000 = $5,50

Melink Intelli-Hood

  • First Cost = $15,000
  • Annual Savings = $4,500
  • Simple Payback Period = 3.3 Years
  • Energy Savings over (7) Years = $31,500
  • Net Savings: $31,500 – $15,000 = $16,500

Over the life of the systems in this example Intelli-Hood will yield $21,000 in more energy savings vs. the competitor, less the initial capital difference of $10,000 ($15,000 – $5,000) = $11,000 more in
free cash flow.  This example does not factor in the time value of money.   

The below data shows the savings difference when a Melink Intelli-Hood system was installed at a restaurant previously using a temperature only system. The baseline data was provided to the owner by the temp-only hood manufacturer and we analyzed the electrical and conditioned air savings via our Estimated Savings Report.  Once the Intelli-Hood system was installed we compared the data and found that Intelli-Hood system yielded 523% more savings than the previous system.

 

Testing has shown that very sensitive heat sensors are as effective as optic sensors in triggering exhaust fans if heat or smoke is present. If cooking generates smoke, then the cooking process will also generate heat. The heat sensors in the Captive-Aire DCV are easily adjustable as different project and applications may require.

Through our own testing in the lab environment, and more importantly the lab of reality in the commercial kitchen with over 10,000 systems, temperature sensing alone will not allow for a quick response to smoke. Based on our data obtained from an installed temp-only system,  the heat sensors appeared to provide no active modulation and acted basically as a two-speed system with an active base speed of 80% and quickly ramping a holding a constant speed of 100% through the day since the appliances were on. Again, without the ability to visually monitor the cooking a temp-only system must be run at much higher minimum speeds as a safety net for capturing effluent. This is a major energy savings penalty.

The heat sensors may be “easily adjustable”, however this requires human manipulation and functional commissioning.  Most often these systems are sent to a mechanical contractor with the instruction  to  connect the temperature probes to control panel and are left at whatever the default factory setting is.  We like humans too, but given the chance we like to engineer around potential issues and lack of consistency from one contractor to the next around the world.  Thus, we patented another feature dubbed “Auto-Temp Span”, which collects performance data from every sensor in the system at defined intervals and automatically sets the optimal temperature spans for every hood in the system.  If the chef decides to change menus, appliances, or a new tenant takes over the space the system will learn these new habits and self-commission for optimal performance.  Call it “machine learning”, call it “artificial intelligence”, we call it a good idea that benefits the end-user.

Lastly, the DCV has a 100% air override button to send the fans into full speed as a safety precaution.

This override button feature is a code requirement for all demand control ventilation systems; we have one too.

Here are a few additional differences between Captive-Aire DCV and Melink:

  • Captive-Aire DCV is typically programmed with a “prep mode” feature to allow greater energy savings. This feature will run the exhaust fans at a very low speed
    (typically 20% speed) when the system is first turned on by staff or BAS. This speed is equal to the design differential between exhaust and make-up air. DCV will run in prep mode until the heat of the appliances necessitates greater exhaust at which point the exhaust and make-up air will both ramp up and cooking mode will commence.
    Melink as currently designed runs both make-up air and exhaust at 50% of its design. 
  • In cooking mode, Captive-Aire designs for a 20% reduction in fan speed during light load cooking times. This reduction is based on extensive research on the topic. Lab testing by The Food Service Technology Center in California has shown that no more than a 20% reduction from a proper design cfm can be made in order to allow the
    system to adequately exhaust appliances when in light load. The Melink system allows for a 50% turndown, therefore, in order for that amount of
    reduction to work properly, the design cfm would have to be increased so the system still works effectively at a 50% reduction. A lower design cfm with 20% fan speed reduction will be more efficient and save more energy than a higher design cfm with 50% fan speed reduction. Captive-Aire DCV has the ability to provide a 50% turndown but we do not recommend this. 

From our perspective, this represents nearly a three-speed system with “modes” to make up for the lack of technology, sensors, programming, and algorithms to modulate based on real-time cooking information and optical monitoring, resulting in a loss of energy savings ability. As representative in our data, the temperature spans are typically set so low with these systems, that as soon as any appliances are on, the fans run at an 80% minimum for a very short amount of time and then jump right to 100%.  Unfortunately it’s pretty rare to see any appliance gas valve regulation in commercial kitchens and most appliances are left at nearly full temperature all day independent of actual cooking, which causes temp-only systems to run at or near full speed all day. We’ve also come across several temp-only systems in the field running at 100% speed when the exhaust temperature read 72 and 73 degrees Fahrenheit.

The Melink Intelli-Hood system is capable of 20-30% minimum speeds as well, but turn-down ratio is a moot point when the rubber meets the road, or when the meat hits the grill in this case.  Our default minimum speed is 30%, a 2% electrical energy difference vs 20%, and we actively modulate through the entire speed spectrum to 100% to maximize energy savings.  The key to electrical energy savings in motor applications lies in the Law of Affinity (below), which at the top of the fan curve roughly translates to a 10% speed reduction = 25% electrical energy
savings. The key to savings is having the optics to safely and actively modulate at the upper ends of the spectrum during the cooking day to maximize savings near the top of the fan curve between 70-100%.

 

In addition to electrical energy savings from the motor control, Intelli-Hood also integrates into the make-up air system to modulate based on the exhaust demand.  This modulation provides additional conditioned air savings and can have a significant impact on the payback of the system.  The more extreme the outdoor air environment, the greater the opportunity for energy savings in the reduction of the heating or cooling loads.  The ratio of savings for conditioned air is 1:1 with fan speed reduction, i.e. a 30% reduction in speeds = 30% reduction in conditioned air.

With nearly 20 states adopting ASHRAE 90.1 2010, or higher, energy standards it’s clear that demand control kitchen ventilation is here to stay and we’re proud to have launched this revolution back in 1989.  One of our core values at Melink is Innovation, and we continue day in and day out to develop more advanced commercial kitchen control systems to save our customers valuable money and hopefully make the planet better for our future generations one hood at a time.  Feel free to contact us regarding your next kitchen design involving demand control ventilation or if you’re an existing operator of a commercial kitchen looking to save money we happen to be experts in retro-fits as well.

“We’ve Done Benchmarking. We’ve Done Lighting. What’s Next?!” Kitchen Ventilation.

The Benefits of DCKV

Kitchen ventilation, both exhaust and make up air, represent a significant opportunity for kWh and kBTU reductions in your facility. Demand Control Kitchen Ventilation, (DCKV) uses temperature and optic sensors to vary exhaust speed and make up air fans.  This is in response to precise cooking intensity underneath all kitchen hoods. With fans only running as needed, savings are gained on fan energy (controls produce 40-60% average fan speed versus 100% without controls). In addition, there are heating and cooling savings gained as a result of kitchens not evacuating all air that was just conditioned.

These controls can be installed in new construction projects. They’re usually specified by engineering firms in the design phase of your project, and should qualify for one LEED point. In addition, DCKV is a path to compliance for commercial buildings’ energy codes for states that have adopted ASHRAE 90.1 2010 and greater. You can see what your state’s requirements are here.

Retrofitting

Retrofitting the temperature and optic controls within existing kitchen exhaust hoods is equally effective at generating energy savings. It’s important to confirm that the controls are UL 710 and 2017 listed. This permits them to be installed in any manufacturer’s hood in any cooking application. There are many utility rebate incentive programs available for the installation of DCKV as well.

Kitchen Ventilation in Action

The financial impact for hospitals’ operating costs is significant when kitchen exhaust and makeup air fans no longer run at full speed 24/7.  A study by the EPA demonstrated that each dollar saved by a non-profit hospital, is the same as generating $20 in new revenues. Incidentally that same dollar saved in a for-profit facility is like increasing EPS by one penny.

Melink recently completed a Mid-West hospital project that produced $20,000 (per year) in combined savings. The savings included electrical, heating and cooling costs. Using EPA study metrics, this equivalates to $400,000 in new revenue for this facility.  Taking rebate incentives for our technology, the hospital’s ROI was less than one year.

The Purpose of DCKV

The goal of any DCKV project is to install controls that maximize the energy savings within the kitchen. In addition, DCKV will assist compliance with building energy codes, attain LEED points and make kitchens quieter and more comfortable. This article goes into greater detail and dives deeper into how these controls pay back initial investment. The articles recently appeared in the American Society for Healthcare Engineering publication, Inside ASHE.

Find the Inside ASHE article on kitchen ventilation here.

Noise! Noise! Noise! Reduce The Noise!

The Holidays are upon us, with all the excitement and the parties. As the Grinch says, “And Then! Oh, the noise! Noise! Noise! Noise! There’s one thing I hate! All the NOISE! NOISE! NOISE! NOISE!”

Now, I am no Grinch about the holidays, but prior to my tenure here at Melink I worked for nearly 10 years as an Environmental Health and Safety Manager within a large chemical facility, and there were various work areas which exceeded noise thresholds requiring hearing protection. It was LOUD. This is where I became cognoscente of NIOSH (National Institute for Occupational Safety and Health) standards for hearing conservation,

NIOSH states continued exposure to noise above 85 dBA (adjusted decibels) over time will cause hearing loss. The volume (dBA) and the length of exposure to the sound will tell you how harmful the noise is. In general, the louder the noise, the less time required before hearing loss will occur. According to the NIOSH, the maximum exposure time at 85 dBA is eight hours.

Although we may not be able to control the noise of the holiday party or the loud toys the children will receive on Christmas day, perhaps within the working environments of commercial kitchens we can make drastic improvements and reduce the overall noise level.

Studies have been conducted over the years and dependent on many variables such as the size of the kitchen spaces, the duration of peak activity, and other various factors the overall noise level at times approach or exceed the 85dBA level, sources show a typical restaurant operates at 80 dB, although this value does not trigger hearing protection, some restaurants are known to reach 110 dB at times which is the noise level of a jackhammer! Think of the last time you were at your favorite restaurant and seated near the kitchen entrance versus the opposite side of the room.

Demand control kitchen ventilation can help not just provide energy savings but also reduce the noise levels drastically, especially over an 8-hour timeframe for employees in the kitchen spaces. When researching kitchen exhaust fans one will find that the noise levels are reported as a “sone” which depending on the static pressure of the design the noise levels can vary. A sone is a unit of loudness, how loud a sound is perceived. Doubling the perceived loudness doubles the sone value. Within fan specs of kitchen exhaust fans manufacturers indicate the “Sones” level for example a 5hp kitchen exhaust fan has a sone level ranging from 16.5 to 26 sones dependent on duct design. Per the decibel level and sones conversion chart this is equivalent to around 68.3 to 74.9 dB!

Now considering utilizing a temperature and optic based demand control kitchen ventilation, such as Intelli-Hood, can reduce fan speeds by 30-45% average fan speed over a 24hr period consider the reduction of noise exposure this provides. It is not uncommon for customers post installation of a Melink Intelli-Hood system to recognize significant noise reduction, many times commenting that during food prep hours, although the fans are “turned on” they operate at a minimum speed and it sounds like they are not even operating!

Perhaps you are in a position of influence of the decision to retrofit Demand Control Kitchen Ventilation, or perhaps evaluating and analyzing the opportunity for a client. Remember that there is more savings than simply energy that can be considered when evaluating demand control kitchen ventilation.

Energy Upgrades In Prison Facilities

It is no secret that many prison facilities are outdated, understaffed, and overcrowded. Sadly, these problems can all be traced back to being underfunded.  With large pressing problems like this, it makes the idea of certain energy upgrades in prisons like installing a new LED light fixture or flow meters on hydronic components seem miniscule while the impact could greatly help the underlying problems.

The Problem – “There’s only three ways to spend the taxpayer’s hard-earned when it comes to prisons.More walls. More bars. More guards.” – Shawshank Redemption

Although it may seem like this statement is true, most of the costs associated with state run facilities is lumped into personnel costs within the operating expenses. Salaries, overtime, and benefits comprised over 66% of the cost to run state facilities. Additionally, an average of 17% of funding across the nation went to facility maintenance, prison programs, debt services, and legal judgments. This data tells us that most of the cost of prisons goes unsurprisingly, to operating costs. The operating costs can range from your day to day maintenance, to the utility bills, to providing food and supervision for inmates. The average salary of correctional officers in the US is $37,717 per year, so adding even one more CO to help an understaffed facility can have a substantial effect on the budget.

The Solution – Lower Operating Costs

However, the problem with initiatives and projects to reduce operating costs, is that they are met with red tape. Every state has their own nuances but all capital expenditures go through lengthy processes to determine what is necessary and when. So, how can a facility take control of own their operating costs without the capital expenditures? For multiple energy efficiency and water conservation measures in one project, energy service performance contracts can be a powerful tool if managed properly. These projects can range from low flow facets, to LED lighting, to control systems, to mechanical system replacements.

However, some states have different laws regarding performance contracts so if this route is not an option, individual conservation measures can be implemented creatively. For example, demand control kitchen ventilation is a relatively low-cost measure with a high ROI, making it a versatile measure for performance contracts and as a standalone facility upgrade. By slowing the kitchen exhaust fans in relation to the cooking activity, savings are realized through fan energy reduction and reduction of conditioned air that is wasted. In many cases there are even lease options among other financing routes that could make your project cash flow positive from the first month of implementation! With the saved money that would be going toward the electric bill, the extra cash can be used for other costs across the facility.

Putting Your Savings to Work

Implementing energy efficiency products like DCKV can save you money, but how much are we talking? For a large facility, let’s say you save $30,000 a year on your electric and conditioned air. In North Carolina, that is enough to cover the cost of one inmate for 335 days or 335 inmates for one day. In Florida, that is enough to cover the costs to house and supervise one inmate for 561 days or the salary of an entry level Correctional Officer. Why is Florida’s cost per inmate so much less than North Carolina? The state completes a lot of ESCO projects, so overall, their facilities are more efficient.

In the end implementing energy efficient technologies and practices, not only helps your prison run more efficiently, it reduces operating expenses so your cash can be used where it makes a  bigger impact; paying for more CO’s, building upgrades, and additional programs to reduce the recidivism rate.

 

Higher Education Taking Action Against Climate Change

Climate change has been a hot topic recently, and higher education is taking note and taking action. While hundreds of schools have already made pledges to increase sustainability across their campus, 13 schools are taking the lead and taking it a step farther. At this year’s 2018 Higher Education Climate Leadership Summit, 13 North American research universities launched the University Climate Change Coalition, or UC3, a group committed to implementing green initiatives into their own campuses and leveraging their research and experience to help others do the same. For over a decade, these universities have been researching innovative ways to reduce energy consumption, and educating students on how to combat climate challenges that are quickly approaching, but now they taking it a step further to spread this expertise to accelerate change through all of higher education.

Colleges and Universities that have committed to take action on climate change
Colleges and Universities that have committed to take action on climate change. Source: Secondnature.org

As the first school listed on the Campus Carbon Neutrality commitment, Cornell University paved the way. They have made continual efforts to implement Energy Conservation Initiatives (ECI), committing $33M towards ECI’s over a recent 5-year period. The Ohio State University established goals to be carbon neutral by 2050 and to reduce total campus building energy consumption by 25%. Both of these schools have found ways to lessen their carbon footprint by implementing various sustainability practices and products campus wide. Reducing energy use in existing buildings have been an ongoing initiative by both universities focusing on modernizing building envelopes, implementation of building automation and control systems, heat recovery and lighting systems. Cornell states projects they’ve implemented to date have had a return on investment of five to seven years.

Intelli-Hood controls at Kennedy Center at The Ohio State University.
Intelli-Hood controls at Kennedy Center at The Ohio State University. Source: osu.edu

A place that can often be overlooked, but has a great impact, is the ventilation system in campus kitchens. With the demand of long hours to accommodate various student schedules, and high volume because of the dense population, campus kitchens tend to run a majority of the day. Depending where the university is located, various local and state codes may require fans to operate 24/7 if the site utilizes gas pilots on kitchen equipment which remain on overnight. The HVAC systems account for 29% of the energy consumption of a food service area, with up to 75% of this load able to be attributed to the commercial kitchen ventilation system.

Melink is the innovator of Demand Control Kitchen Ventilation (DCKV) with the Intelli-Hood® system. Both Cornell University and The Ohio State University found the benefit of utilizing dckv systems across a majority of their kitchens. Using Intelli-Hood®, systems operate at a lower overall fans speed average. In an average day, the Melink Intelli-Hood system can recognize up to a 45% reduction in fan speeds equivalent to approximately 83% electrical fan energy savings. Additionally, this reduced operation results in a decrease of load demand of surrounding HVAC equipment providing additional conditioned air savings that can be recognized.

Tax Reform Bill Windfall – Reinvest In Efficient Operations for the Long Haul

Your profits just increased 14%, what are you going to do with all that cash???

Large US companies are on tap to reap the benefits of a 21% corporate tax, down from 35% (not factoring in Effective Tax Rates), under the new federal tax bill and there are many theories on where the money will go. Several companies have already given out bonuses, announced minimum wage increases, increased 401k matches, stock buyback programs, and increased shareholder dividends.  While all these are great short term shots in the arm during a time of robust economic growth, I’d like to argue that the smart play would be to invest in operational and energy efficiencies to prepare for an economic pullback and eventual awakening of the bears. Fortunately for many companies this recent time of growth has come over a period in which energy prices have been relatively flat ,or declining, resulting in reduced expenses and increased profit margins.  The rates for natural gas are slightly above 10-year lows and electrical pricing has shown a modest increase of 3% on average across the United States (https://www.electricchoice.com/electricity-prices-by-state). It would be short sided and foolish to think these rates will remain near basement levels for the long-term as geo-political flash points or natural disasters could lead to sharp increases in rates. Unless businesses invest in efficiency now they’re not going to be able to react fast enough to counter the cost of an increase should an event occur or prices quickly rebound.

 

 

Source: Market Insider Even at today’s rates most mainstream energy conservation measures (ECMs) fall at, or under, the industry benchmark of a 3-year Simple Payback Period, or ~33% ROI.  Despite the bull market running wild, it can be difficult to find a relatively risk free investment that will yield a consistent 33% return. Therefore, the smart money will point toward investing in efficiency projects now in favorable capital markets. Aside from some newly minted Bitcoin millionaires, my bet is that most “Main Street Americans” would rest easy at night knowing their investment will yield a consistent return north of 30%. There’s likely not one silver bullet technology that will drastically improve operational efficiencies, however there are many proven low risk investments such as LED lighting, HVAC upgrades, Building Management Systems, and smart building controls that can have an impact on many areas of your operations. This multi-faceted approach to energy efficiency will build a more robust infrastructure and predictable energy usage profile for business operator for when the economy eventually pulls back and rates increase. I’m not an economist, investment banker, trader, or tax analyst, but I do manage a global business and believe in growth reinvestment balanced with the protection of downside risk.  So, if you’re a building owner, asset manager, facility manager or responsible for the financial performance of your business; I urge you to mitigate your future operations cost risk and invest in efficiency today.

Lodging’s Consumer Dining Trends and Your HVAC System

Since 2010, the hotel landscape has changed drastically due to the emergence of Millennials in the marketplace. The days of long-term consistency, home-away-from-home value, and a friendly face at check-in are things of the past, and we are now seeing the need for hotel hot spots that are personalized, efficient, connected and trendy. The transformation makes hotels get creative in filling revenue discrepancies created by the quickly changing landscape, focusing more than ever on operational costs.

The change in buying power

Prior to 2010, the “Baby-Boomers” generation dominated occupancy demands. When Boomers were the bulk of the lodging customer base, focus was on consistency, more value for the customer’s dollar, a big screen TV, consistent food and beverage offerings, and a friendly, personalized check-in experience. Today, Millennials are all about Individualism, efficiency, mobile connectivity, creative and trendy food and beverage offerings, and online check-in. Due to this demand shift, along with the cost to build and the ever-changing consumer marketplace, developers are becoming more focused on the development of limited brand hotels. As of June 2017, “Upscale” and “Upper Mid-Scale” represent roughly 65% of all new build hotels.

In response to the change in customer wants and needs, hotels have majorly changed their strategy. Hilton developed the Tru® brand in response to these changes to make it easier and less expensive for developers to build. Marriott is doing an over-haul of their Courtyard® brand to create a hybrid solution to please guests from both generations. Previously, if you’d go to a major brand hotel on the east coast or the west coast, you could get the same exact cheeseburger. Those days are over! Hotels must now bring in local food and beverage options to not only keep customers eating at the hotels, but to provide a truly exceptional experience every time. A satisfied customer is no longer enough in any market today. With social media and other technologies, there’s now a need to “wow” customers. A good dining experience isn’t enough, it needs to be one of the best dining experiences they’ve ever had!

What does this mean for revenue?
In a recent article published by Lodging Magazine, Food and Beverage (F&B) profit margins are up roughly 5% since 2010, yet food purchases only rose by a CAGR of 2.3%. The two sources that continue to decline for F&B are “In-Room Dining” and “Mini-Bar” sales, which is consistent with the new emphasis of providing a unique social experience in hotel lobbies. Considering the decline in food purchases and the ever-changing marketplace, it is hard to imagine lodging has seen a 5% increase in F&B profit margins.

So how do all these items tie together and make for increased profit margins? How have the hotel management companies been able to make all these changes in a short amount of time and still increase profits? How can profit margins be up when we all know an ever-changing menu would make it harder to negotiate prices at a high-volume? It’s not one simple answer but I’ve personally seen the major management companies stepping up their game and working smarter. Revenue increases can’t be the main driver for the success. The operational efficiencies are where the differences are made!

Changing energy consumption is key

Electrical consumption for the typical US hotel is 50% in HVAC and 23% in lighting. Within food service facilities, HVAC systems account for 29% of energy consumption. Up to 75% of this load can be attributed to the commercial kitchen ventilation system. At Melink, we’ve seen many owners in the last 2 to 3 years begin installing a Demand Control Kitchen Ventilation (DCKV) system in their kitchens to help lower operational costs and solve the ever-plaguing negative air pressure issues. With the help of these owners and major brands, we’ve also developed technologies to help solve this in the ever-growing Select Service markets. Many of these projects have been packaged with LED lighting to solve 73% of the problem (per the chart below). This allows the hotel owner to take advantage of the available utility incentives, increase profit margins in the changing F&B market, show an attractive ROI to the owner, help solve air pressure issues in common spaces, and increase overall guest comfort.

If there’s one thing that’s true in this industry, it’s that change is inevitable! Management companies, owners, brands, developers, and vendors have two options: change with the market or get left behind. I’m happy to report that most of the major players are making smart and energy-conscious decisions that are ultimately improving their bottom line and increasing guest loyalty and satisfaction.

Intelli-Hood Stadium Retrofit Case Study

CONTEXT

Faced with the industry challenge to reduce operating costs, Gillette
Stadium sought after promising opportunities to reduce energy usage.
Other stadiums in the country had selected Demand Control Kitchen
Ventilation (DCKV) for their kitchen hoods based on promising estimated
savings and available utility incentives. The Gillette Stadium team also
decided to take advantage of the opportunity.

  • Total motor power: 41 HP
  • Daily operating hours: 14
  • Days per week: 7
  • Weeks per year: 50
  • Cost per kilowatt hour: $0.10
  • Climate zone: Marine

RESULTS

Gillette Stadium selected Intelli-Hood® to be installed into the hoods in
the Club and Players kitchens. The team capitalized on utility rebate
incentives that expedited the payback projection by 1.5 years. After
operating for some time, the two kitchens were tested and proved to
have reduced exhaust fan speed dramatically. In the Players kitchen the
fan speed was reduced by 66 percent and in the Club kitchen the speed was
reduced by 55 percent. Combined, the average fan speed across both kitchens was 60 percent.

Energy savings graphic

Below is a sample graph of the varying exhaust fan speed for one day at the Club Kitchen:

Gillete savings graphic

 

Could Intelli-Hood be a fit for my project?

Are you curious how much energy Intelli-Hood could save within your commercial or industrial kitchens?  Submit an energy savings estimate request form at the bottom of our Intelli-Hood page to get started.

 

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Intelli-Hood Restaurant Retrofit Case Study

CONTEXT

A popular national restaurant chain, which also is a leader in sustainability, adopted Melink’s patented Intelli­-Hood® HVAC controls package as an energy conservation measure. The company’s goal was to achieve a 60 percent reduction in exhaust fan energy across its 80 properties. Following is an excerpt from its 2016 Corporate Sustainability Report:

“We tested an innovative demand ventilation system at our restaurant in Pleasanton, CA, which automatically adjusts the exhaust and make up air fan speed by measuring the temperature, steam and smoke in the hood. By having the fan speed ramp up or down as needed, the amount of energy used compared to standard fans is significantly reduced by as high as 60 percent. We are now in the process of rolling out the system to approximately 120 locations, potentially reducing our energy use by as much as 63,000 kWh’s per location.”

RESULTS

Savings across the restaurant company’s portfolio have been impressive and exceeded expectations. Not only has the company enjoyed increased operating profit as a result of the 65 percent reduction in energy usage, but its utility bill has dropped by $702,240 annually since 2015.

Energy savings graphic

 

Below is a sample graph of the varying exhaust fan speed for one day at one location:

demand controlled ventilation

Could Intelli-Hood be a fit for my project?

Are you curious how much energy Intelli-Hood could save within your commercial or industrial kitchens?  Submit an energy savings estimate request form at the bottom of our Intelli-Hood page to get started.

 

Email this case study or share it to your social media by clicking the icons below.