UW Health proves the ROI of energy conservation
- UW Health participated in the U.S. Department of Energy’s Better Buildings Challenge to improve energy performance by 20% over 10 years — and achieved a 24% improvement in just four years.
- The biggest savings have come from applying a process known as retro-commissioning — ensuring optimal operation of all equipment, such as the air-conditioning system and light bulbs — in the health system’s largest buildings.
- UW Health’s retro-commissioning efforts pay for themselves, on average, in 11 months, even without the incentives given by the local utility company. Savings from reduced energy usage continue every year thereafter.
Any health system leader who is not paying attention to energy consumption may be missing a huge opportunity to invest in patient care. If that sentence is confusing, consider this: Energy conservation efforts at UW Health, the integrated health system of the University of Wisconsin-Madison, avoided costs of more than $13 million between 2013 and 2018. That freed up money for our real passion, which is patient care.
We started in 2010 by trying to cut the utility bill at a single clinic facility. Three years later, we jumped into the U.S. Department of Energy’s (DOE’s) Better Buildings Challenge, which supports organizations in the goal of improving energy performance by 20% over 10 years. We like a challenge, and we hit our goal early: We reduced consumption by 24% by the end of 2017 and 25% by the end of 2018.
Energy efficiency takes an investment, so this work has to start with top leaders making a commitment to save energy. But the ROI comes quickly, and the savings continue year after year.
Getting started on energy efficiency
Our journey began in 2010 when, as director of facility services, I took responsibility for utilities budgeting. We were spending nearly $500,000 a year on utilities for our largest clinic. The amount had been steadily increasing, and the historical practice was to increase our utilities budget line by 5% each year.
Suspecting that we had a huge opportunity for savings — both financial and environmental — I started measuring and tracking energy usage in the Energy Star Portfolio Manager, an online tool available at no cost on the Environmental Protection Agency’s website. I also engaged our local utility company to learn about the rebates and incentives offered to customers that invest in energy efficiency.
In 2012, our senior leaders supported my request for a $50,000 retro-commissioning study of our biggest clinic building. The process involved hiring an energy engineer to conduct a systematic evaluation of the building’s equipment and systems to identify steps that could be taken to save energy.
The engineer identified several simple opportunities, such as replacing broken sensors so that air-conditioners shut off correctly and making sure we weren’t heating or cooling spaces when they were unoccupied. To comply with the recommendations, we needed to invest more money, bringing the total cost of the project to $82,000.
The work reduced the building’s annual utility bill by $66,000, meaning our investment paid for itself in just 15 months. Beyond that, we also received a $63,000 incentive from our utility company.
Our clinics and hospital were separate entities at that time (we merged into a single organization in 2016), but clinic leaders supported my recommendation that we collaborate with the hospital to consider our energy consumption as a system. We formed an energy team and began sharing our data, measuring the energy consumption of each building and benchmarking against other participating healthcare facilities in the Better Buildings Challenge to find opportunities for improvement.
Since 2012, we have invested $724,000 in six retro-commissioning projects covering about 4.6 million square feet of space, and our annual cost avoidance — through lower utility bills from reduced consumption — is $803,000. That equates to a simple payback period of about 11 months. On top of that, we have received more than $585,000 in utility-company incentives.
Where to find support for energy initiatives
Our success has come from replacing older equipment with more energy-efficient equipment, sealing ductwork, turning equipment off during evening and weekend hours when patients and staff are away and replacing old light fixtures with LED versions.
The size of the opportunity is daunting at first, but there are many resources to help tackle the task. In addition to the Energy Star Portfolio Manager, which I highly recommend, these have been the most helpful to us at UW Health:
Free expertise. In Wisconsin, like many other states, utility companies fund an energy efficiency and renewable resource program to support businesses and residents in making smart energy decisions. One of the program’s business partners did a walk-through of our largest clinic with me back in 2011, and that gave me ideas about how to get started.
Utility company incentives. Our utility company frequently introduces new programs to encourage energy efficiency. For example, it has a demand-response program that offers incentives to reduce energy on hot (i.e., high-demand) days. Choosing not to cool a building down to 72 degrees on a 100-degree day — or just telling staff to draw the shades to keep buildings cooler — can really help.
DOE’s Better Building Challenge program. We have entered 34 buildings in the challenge. The program takes data from our Energy Star Portfolio Manager, validates it and shows how we have improved over time. I receive a spreadsheet that lets me see how each of my buildings is performing. The program also offers webinars, technical assistance, case studies and other educational opportunities on incorporating energy efficiency in building projects.
Our staff. Seeing how much money we’ve saved on energy invigorated our staff because they could see how they are contributing. It helps when senior leaders consistently reinforce the need to be cost-conscious.
Some of our staff have received building-operator certification, which includes training on ways to improve energy efficiency. When staff are trained, they can carry those improvements into all of your buildings.
We share our energy data so staff can see how we are doing compared to previous years, how we compare to benchmarks and how our buildings compare to one another. When they see one building is performing worse than another, for example, they get engaged and look for opportunities to improve.
In an initiative of this scope, engagement of all staff is paramount.