Most Commercial Buildings Are Wasting Energy. And Paying For It
Walk into any commercial building in Northern New Jersey that is more than 10 years old, and you will probably find HVAC equipment running at full capacity regardless of actual demand, thermostats and controls that have never been calibrated since installation, economizers that are stuck open or stuck closed, and no centralized monitoring of energy consumption.
Each of these issues wastes energy. Together, they can inflate your HVAC energy costs by 20% to 40%. The good news is that most of these problems have straightforward solutions with payback periods of one to four years, and New Jersey offers incentive programs that can cut the upfront cost substantially.
Variable Frequency Drives: The Highest-ROI Upgrade
If your commercial building has HVAC motors running at constant speed, supply fans, return fans, exhaust fans, chilled water pumps, condenser water pumps, VFDs should be at the top of your upgrade list.
A VFD controls the speed of an electric motor based on actual demand. Instead of running a 15-horsepower supply fan at full speed 24 hours a day, the VFD ramps it down when the building is partially occupied or when outdoor conditions reduce the cooling load. The energy savings are dramatic because of the fan affinity laws: reducing speed by 20% reduces power consumption by approximately 50%.
In our experience across Morris County, Bergen County, and the Route 80 corridor, a VFD retrofit on a single large air handler can save thousands a year in energy costs with payback often under three years, and that is before incentives.
Building Automation and Controls Upgrades
Beyond VFDs, there is a spectrum of controls upgrades that reduce energy waste without requiring major equipment changes. Smart thermostat installation replaces old mercury or non-programmable thermostats with units that can be scheduled and adjusted remotely. Economizer repair and replacement ensures your RTUs use free outside air for cooling when conditions allow. Boiler reset controls modulate hot water temperature based on outdoor air temperature, reducing boiler runtime in mild weather. Demand-controlled ventilation uses CO2 sensors to reduce ventilation fan speed when spaces are unoccupied or lightly occupied. Scheduling and setback programming ensures HVAC systems are not running at full capacity during unoccupied hours.
For larger buildings, a full Building Automation System (BAS) using the Honeywell Tridium Niagara platform ties all of these measures together into a single monitoring and control platform. But even individual controls upgrades deliver meaningful savings.
NJ Rebate Programs for Energy Management Upgrades
New Jersey has some of the most generous energy efficiency incentive programs in the Northeast. Here is what is available:
Direct Install: For small and mid-size commercial buildings using less than 300 kW peak demand per month. Covers up to 80% of qualifying upgrades including VFDs, thermostats, economizers, boiler controls, and HVAC tune-ups. The remaining 20% is financed at 0% interest on your utility bill over 60 months. No upfront cost. KCG is a qualified partner for NJ Natural Gas, JCP&L, PSE&G, and Rockland Electric.
C&I (Commercial & Industrial) Incentives: For larger facilities that exceed the Direct Install threshold. Offers per-unit prescriptive rebates for VFDs, high-efficiency motors, chillers, boilers, and other equipment. Custom incentive paths are also available for more complex projects.
Pay-for-Performance: A whole-building approach for large facilities that incentivizes comprehensive energy reductions measured against a baseline. Payments are based on verified savings over a multi-year period.
Combining Upgrades for Maximum Impact
The best results come from combining multiple measures. A building that installs VFDs on its air handlers, fixes its economizers, adds boiler reset controls, and implements proper scheduling will see a cumulative energy reduction of 20% to 35%. Each measure amplifies the others. VFDs enable better part-load performance, which economizers and scheduling take advantage of.
We typically recommend starting with a facility assessment to identify all the opportunities, then prioritizing based on ROI and incentive availability. Sometimes the highest-impact measure is a \$500 economizer repair. Sometimes it is a more expensive BAS installation. The assessment tells you where the money is.
Getting Started
KCG Energy Management has been helping commercial building owners in Northern NJ reduce their energy costs for over 33 years. We handle the full scope: assessment, equipment selection, incentive paperwork, installation, and commissioning.
If your building’s energy bills seem high, or if your HVAC systems have not been upgraded in a decade, call us at 973-335-3884. We will walk your building, identify the opportunities, and tell you straight which upgrades are worth doing and which are not.