How Can You Understand the ROI on Your Energy Management?


In order to understand the ROI on your energy management, it is important to first understand the definition of the Levelized Cost of Electricity (LCOE). In electrical energy production, LCOE is defined by the price of the energy produced (often expressed in units of cents per kilowatt-hour.) This calculation takes into account the economic life of the power plant and the costs incurred by the construction, operation, and maintenance of said plant. Finally, it factors in fuel costs.

In essence, when determining if a certain sustainable energy source switch is right for you, calculating an estimated LCOE will help. However, once the switch has been made, it is the perfect way to determine your business’s return on investment.

The LCOE Equation

Simplified, the equation for LCOE is as follows: LCOE = {(overnight capital cost * capital recovery factor + fixed O&M (Operating and Maintaining)cost))/(8760 * capacity factor)} + (fuel cost * heat rate) + variable O&M cost. Note, the denominator 8760 represents the number of hours in one calendar year.

In order to determine if switching to sustainable energy has truly saved your business money, you can compare old utility bills with more recent ones. The answer is in the bottom line. If you are not only paying less in utilities but the maintenance and lifespan of your energy source has improved, you have undeniably made a wise investment.

SuperGreen Solutions can Help
Sustainable energy is not just a dream, it is a very attainable reality. SuperGreen Solutions has an entire team that can support your business as it makes the transition. We can help you determine the right energy source for your geographical location and business’s needs. Not to mention, making your business internationally recognized for making significant progress toward greater sustainability.

These steps not only make a difference to your bottom line, but enable your company to achieve ISO 14001 Compliance. This cutting-edge Compliance Program offers a unique service that helps with everything from improving revenue and financial performance to greater employee engagement and competitive differentiation.

Contact SuperGreen Solutions today!