Building Operating Management

Energy Procurement Choices Affect Renewable Energy Decisions

How an organization buys energy may also impact use of renewables. In recent years, some retail energy contracts have contained provisions that, during their term, limited or banned installation of on-site power-generating devices. Such issues need to be addressed before buying a photovoltaic system, combined heat and power system, or other form of on-site generation. The same concern would apply before entering into a long-term power purchasing agreement for energy from a photovoltaic system installed by a third-party developer. Failing to do so could cause violation of the power contract or the solar power purchasing agreement. Similar limitations may be found in some contracts (and utility tariffs) when it comes to combined heat and power systems, also called cogeneration.

Bottom line: nail down power purchasing before embarking on any form of self-generation.

With regard to sequencing efficiency and renewables, coordination is less of an issue. Since neither is likely to reduce total electric load by much more than 10 percent, it is unlikely that either would significantly cut into the benefits of the other. If capital limits the choice to only one option, may the best choice — be it efficiency or renewable — win.

Understanding the charges a facility pays for power is a crucial step in planning to reduce energy costs. For more information on understanding facility electric bills, visit:

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  posted on 12/7/2011   Article Use Policy