Manufacturer finds lighting energy efficiency convenient, truthfully

6-month payback, $89,152 annual savings

March 1, 2010

VeriForm , a capital equipment manufacturer located in Cambridge, Ontario, reduced its electricity usage by 58 percent by installing new, energy-efficient lighting in its plant. The company also reduced its natural gas consumption by 90 percent and its CO2 emissions by 233 tonnes annually.

A confluence of his daughter’s birth, a facility expansion, and viewing Al Gore’s documentary An Inconvenient Truth, prompted a Cambridge, Ontario, manufacturer to launch a series of building and operating changes to improve energy efficiency in his facility’s lighting system, as well as other systems.

“My daughter was born four years ago while we were doing an expansion. And I had just seen An Inconvenient Truth. That’s what initiated it,” Rak said.

Paul Rak, president of VeriForm, an industrial capital equipment manufacturing company, said his one-time investment of $46,186 between 2006 and 2008 has reduced energy costs by more than 58 percent—$89,152 annually. The average length of return on investment (ROI) was 6.3 months. Some projects paid for themselves in just a week and a half, according to Rak.

VeriForm has decreased its carbon footprint by over 45 percent in just two years, Rak said. He estimated that the overhaul will save more than $1.42 million and reduce greenhouse gas emissions by 233 tonnes per year over the next decade.

Expansion Prompts Scrutiny

Rak said that the 2006 expansion was an opportunity to review VeriForm’s utility costs, because he was making building construction decisions based on which approaches would conserve energy as well as enlarge the facility workspace.

“And during expansion planning, I noticed that the builder wasn’t suggesting anything to save electricity—or heating.”

Rak said that about that time he had started tracking fuel efficiency on his hybrid vehicle. A control panel on the vehicle indicates how many miles per gallon the driver is using. “So, being a perfectionist and a Type A personality, I began to try to get better mileage with each gas tank.

“So then I thought … what can we do here at the plant to improve energy efficiencies?” Rak said.

“That got me started with a few small projects, and I found those projects paid for themselves very quickly. The rest of the projects followed.”

Better Lighting, Less Electricity

In evaluating where to start, Rak said he approached lighting first—the low-hanging fruit. “Lighting was easiest,” he said. The plant facility’s original system had been equipped with high-intensity discharge (HID) lighting

“In typical industrial and commercial settings, lighting accounts for 30 percent of electrical costs,” Rak said. “I asked my electrician if there was any better choice of lighting than HID and he said T5. The T5 lighting was just coming out. Replacing an HID fixture with a 4-bulb, T5 light fixture will reduce electrical consumption by 50 percent.

“So lighting is 30 percent of my costs, and I can cut it in half right then and there just by changing the fixtures.”

Rak said he explored other lighting types, including induction lighting, but concluded that the T5 lighting, with a year-and-a-half payback, was cheapest with the fastest payback. He had 76 HID light fixtures replaced with T5 lights in the production area.

“And that’s not including subsidies from local utilities. Our local utilities in Ontario right now are giving up to 50 percent of the cost. So anybody taking advantage of them can actually get payback in nine months,” Rak said.

As one might expect, the lighting investment in the expanded area of the building was lower and the payback was quicker than in the original part of the building, which had to be retrofitted.

“In the expansion, the investment was cheap, because it was just an upgrade from what we were already planning to pay for. To go from HID to T5 was only $2,000 for a 14,500-square-foot bay.

“In the old bay, which is 40 percent smaller, it cost me $6,000 to change the lighting. So, the overall cost was $8,000 to change the lighting in the whole plant, and it paid for itself in less than a year.” (See Figure 1.)

Figure 1
Energy Waste Reduction Projects With only an $8,000 investment in a new lighting system, VeriForm reaped savings of nearly $21,000 and reduced CO2 by 26,275 kgs annually.

Project	Initial Cost Can. $)	Annual Savings (Can. $)	Annual CO2 Reduction (kg)
Replace HID plant lighting with T5 lights	$8,000	$20,916	26,275
Install equipment capacitors to raise power factor	$11,285	$24,118	28,243
Install tamper resistant programmable plant thermostat	$1,200	$13,911	84,067
Install wire heating disconnects on 5 bay doors	$1,200	$7,893	47,699
Turn off printers/monitors/computers at night	$250	$2,978	3,487
Install software to print multiple pages per sheet	$320	$1,200	1,293

Rak said that the calculated costs included not only the purchase of the new light fixtures, but also rental of a boom lift and removal of the old fixtures down and installation of the new ones.

“A lot of industrial facilities have high ceilings. We have 28-ft.-high ceilings. We’d have to rent a Skyjack or a boom lift to get up to change the lights, right? So we factored in not only electrical savings, but also labor savings.”

He also considered the savings resulting from the T5 lights’ longer life—twice the life span, he said.

Rak added that buying brand-name lighting was extremely important because the “no-name” products have a 15 to 20 percent failure rate, he said.

“So if you’re asking me for advice, I would say don’t cheap out on lighting. Pay the 10, 15 percent extra, because if you buy the cheap stuff with no name or from overseas, you’re going to see a 15 percent failure rate, guaranteed.”

Reducing Electricity Further

Rak said that he was so encouraged by the ease and quick ROI of the lighting changes that he began looking for other ways to reduce electricity usage. “When we saw that it was simply a decision of which light fixtures to get and sending a P.O. to have it done … with a payback of less than a year, we looked at what else was out there.”

Rak’s next step was to reduce his equipment’s power factor. According to the U.S. DOE, department of Energy Efficiency and Renewable Energy, power factor is defined as the ratio of real (working) power to apparent (total) power. “The power factor is related to your efficiency. It’s not a well-documented thing, but for industrial customers, on every bill you will see the words power factor. If your equipment is inefficient—whether in the U.S. or Canada—utilities charge you a penalty if your power factor is below 90 or 95,” Rak said. “Ours was high 60s, low 70s, so we were paying a huge penalty every month.

“So all we did was install capacitors at our machines—press brakes, shears, plasma cutters (see Figure 2). It raised our power factor to almost 100 [1.0].”

Next Rak started looking at how fast the company’s machines were cutting. “We make downdraft tables for plasma cutting and laser cutting machines, and we have both types of machines in-house for our production as well. We looked at how we were cutting our steel and stainless materials.

“We bumped the speeds up, carefully, in 5 percent increments. We were able to cut our steel 15 percent faster. So right there, we cut the same amount of steel with less electricity, just by going faster.”

Feeling the Heat of High Gas Bills

Rak said while planning the company’s expansion, he looked closely at his current heating costs.

“And as we’re doing this expansion, I notice that we’re spending a lot on heating in the last three years. I was troubled by the bills. They were about $3,000 a month,” Rak said. “I thought, if I’m going to do this expansion, I’m going to use extra insulation to save energy. While the insulation was being put in, I also thought, what can I do in the old bay, the original bay?”

Rak said that while scrutinizing how the original bay was heated, he found that there were many individually controlled, nonprogrammable thermostats. After workers left for the day, the heat would continue running, even on weekends while the plant wasn’t running. Too, some of the thermostats were set at high temperatures. So Rak had the individual thermostats removed and one central, programmable thermostat installed.

“We did one more thing. In the same week, we installed heating disconnects, or limit switches, on the five bay doors. So basically, when the bay door goes up, the heat turns off in the whole shop,” Rak said.

“Now that sounds Draconian. But what I found was that when the bay doors were opened—even in the middle of winter—they were left open for hours. They’re huge bay doors, up to 17 feet wide because we have large steel service center trucks coming through them, bringing in the steel plate and coil, the doors were being left open for up to three hours at a time.

“The staff wouldn’t chase the shipper since the infrared heaters kept them warm despite the heat loss at the bay doors. Meanwhile I’m seeing the bill for thousands of dollars. So I said, ‘You know what, I’ve had it. Let’s let the staff chase the shipper by turning off the heat with the bay door disconnect system.’

“So after we had these disconnects put in and a central thermostat installed, my bookkeeper came to me and said, ‘Paul, look at this heating bill.’

“I said, ‘How much did we save—10 percent? 15 percent?’ She said, ‘No, we saved 91 percent!’

“The thermostat cost us $1,200 and we saved $14,000 in one year. The disconnects for the doors were roughly the same—$1,200, and the savings were $8,000.

“Our heating costs went down 91 percent. That was the best, cheapest, fastest payback project we ever did. We’re talking about a one-month payback. That’s better than any stock market return.”

Solving the Paper Towel Problem

In all, VeriForm implemented 45 individual energy- and waste-saving projects, including installing motion sensor switches in common areas and in the plant, and turning off computers when not in use. One of them was not so much a cost-saving project as a “human” one.

“One of my pet peeves was, paper towels on the ground in the plant bathroom. And I couldn’t understand why, when the garbage cans were right under the paper towel dispensers, people just threw the paper towels on the ground,” Rak said.

“So I said, you know what, what’s better for the environment—paper towels or hand dryers? And what’s better for our bottom line?”

Rak said his research showed that the impact of paper towels on the environment was nine times that of hand dryers. “It has to be made, you’ve got to purchase it, someone has to ship it to you, you have to receive it, dispense it, dispose of it … We put in hand dryers,” he said.

“This was a small project, but it solved a human problem. No more paper towels are being thrown on the ground. We don’t have to pay a cleaning person to clean them up. The hand dryers work more effectively, and the staff likes to use them. We only spent $2,000 to buy and install them, but we saved $2,900 in paper and disposal per year. So in less than one year, we more than paid for the project—and we now make $2,900 extra a year in profit,” Rak said.

You Say You Can’t Afford to Go Green?

Rak balks at the idea that manufacturers cannot afford to go green. “That’s a myth,” he said. “Going green is profitable.

“When we started measuring the results … one of the first things we started looking at was our sales per kilowatt-hour. Previously, for every kilowatt-hour of electricity we used, we were sending out $58 worth of product. Today it’s $131 of product per kilowatt-hour.”

So how did Rak measure the carbon emissions reduction? Rak said he multiplied Ontario’s published rate of greenhouse gas emissions produced by electricity generation by the kilowatts he conserved.

“Each state and province has a different emission rate, because some use more hydroelectricity, others use more coal, wind power, natural gas, cogeneration, nuclear … and we found that Ontario’s emissions are 0.31 lbs. of CO2 per kilowatt. So we calculated our savings in kilowatts and then did the math.”

Eye Opener

“The project was a real eye-opener for me. I never expected to actually save money. At VeriForm, we care deeply about the environment. I just wanted to have a positive impact on the environment.

So does Rak’s 4-year-old daughter appreciate her father’s efforts to reduce his company’s environmental impact? “She’s interested in Disney World and The Wiggles from Australia. That’s what she appreciates right now.”