At this year’s National Automobile Dealers Assn. show, everyone was talking about electric cars. What seemed like a novelty just five years ago is now on the way to becoming mainstream – bringing new challenges to car dealerships.
One of the biggest challenges is how to take control of rising electricity costs in this increasingly complex landscape. In the past, car dealerships didn’t have to worry much about their electricity bills, but that’s changing for several reasons:
- EV chargers are adding to electric loads
- Electricity rates are going up and becoming more complicated; utilities are charging not just for how much electricity you use but also when you use it
- It’s expensive to manage these changes and costs manually
You can reduce electricity costs by installing solar and batteries, but they’re expensive and might only help with half of your bill. That’s in large part because of demand charges.
Demand charges for franchised car dealerships are like energy speeding tickets. You could drive at the speed limit all month, but all it takes is a few minutes of speeding to get a ticket. The same applies to demand charges. Instead of being based on your overall energy use, they’re based on your single highest 15-minute energy spike of the month. You could be using a relatively modest amount of energy for most of the month, but if you have just one 15-minute spike, your bill can increase dramatically – potentially even doubling.
EV chargers are just one cause of the three most common “demand charge speeding tickets”:
- Thermostat tickets: Though EV charging will soon add to electricity loads, HVAC systems still account for 50%-70% of energy use in most franchised car dealerships. Most of them are turned on all at once, aren’t that smart, and are set at a single temperature instead of within a comfort range.
- EV charging tickets: Energy use can spike from EVs charging all at once, charging during the times of day when energy is the most expensive, and charging without coordinating with other electric loads in the building.
- Human mistake tickets: People might leave HVAC systems on after hours, or in storerooms or offices that aren’t in use during the day.
It’s a good idea to analyze your past energy use to see when spikes occurred that might have cost you a demand-charge speeding ticket. But it would require 24/7 attention to manage the energy in your car dealership manually, just to avoid that 15-minute speeding ticket mistake. The good news is that you can reduce the cost of these demand-charge speeding tickets with a simple and cost-effective solution: intelligent, automated demand-management software.
Demand-management software saves you money by shifting some of your electricity use to less expensive utility rate times or times when a spike won’t happen, managing your building within comfort ranges and automating energy decisions so you don’t have to think about them.
For example, if your software predicts that a spike is coming because temperatures outside the showroom are going to get hot at 10 a.m., the software can slowly pre-cool your building to avoid the spike while maintaining a comfortable temperature. The software also is smart enough to coordinate and stagger EV charging times and building cooling times to avoid spikes.
Look for demand-management software that:
- Requires minimal installation and uses your existing building, HVAC equipment and energy management systems, with no fancy upgrades or replacements needed. Even old HVAC systems can be managed effectively with smart thermostats connected to demand-management software.
- Is cloud-based to allow for updates and data processing that can predict spikes and update when utility rates change.
- Functions such as cruise control with a clear, simple dashboard and set-it-and-forget-it functionality that doesn’t get in the way of business operations.
- Includes built-in utility rate structures for every region of the U.S.
- Lets you maintain control by setting schedules, zones and overrides as needed. This should include monthly and annual reports that you can review to adjust the system as needed from time to time.
Compared to solar and energy storage, a demand-management system is highly cost-effective. The payback period on good demand-management software generally runs from six months to two years.
Casey Miller is chief commercial officer of Extensible Energy, a provider of demand-charge and energy-management software for auto dealerships throughout the U.S.