Feature: July 2006

Lean, Mean, and Green

Fourteen ways to help you cut energy costs.

By Nancy Dunham

Dealer Angelo Ingrassia was pleased with his 50 percent savings
after installing more efficient lighting and fixtures in his showroom.

Whether it’s building an energy-efficient facility or modifying your existing systems, going green can offer a long-term payoff, says dealer Angelo Ingrassia, who owns three dealerships in the Rochester, N.Y., area. It costs a bit more at first, “but that cost is inconsequential when you add it up over the long run.”

Following are some strategies for helping the environment and your bottom line at the same time. None of them will interfere with automakers’ facility design plans, says Rick Ferrara, Gensler Architecture, Dallas.

Look for contractors experienced with dealerships, says CFO Tyler Corder.

Choose your contractor carefully. Find contractors and architects who have worked on dealerships before, says Tyler Corder, chief financial officer, Findlay Automotive Group, Henderson, Nev., which has built 12 new stores from the ground up in the past decade. First, go to the EPA for references and detailed information on products, says NADA 20 Group consultant Wayne Phillips. Then call dealers who have undertaken similar projects. Utility reps often will provide names of vendors and business owners who have completed projects like yours, adds consultant Richard Flint, Richard Flint Seminars, Newport News, Va. Once you have at least three vendors, interview them and ask for more references. This research will likely make your choice clear, Flint says.

Draw up a business plan and outline the paybacks you expect. Dealer Pat Lobb, Pat Lobb Toyota of McKinney (Tex.), who is building a new “green dealership,” was very selective when deciding which components to install. “Everything that I do will have a two- to three-year payback,” says Lobb. “If I can’t get that kind of payback, I’m not interested.”

Set your thermostat at 68 degrees in the winter and 76 in the summer.

Monitor heating and cooling. Get a programmable thermostat and set it at 68 degrees in the winter and 76 in the summer (after hours, 50 to 60 degrees in winter and 80 to 90 in summer). Set the thermostat to ramp up for a few hours before opening to take advantage of off-peak costs.

Make your store airtight. Don’t heat and cool the outside.Weather-strip and caulk cracks and leaks around windows, doors, and electric outlets.

Adjust your hot-water heater. Keep it at 105 to 120 degrees Fahrenheit.

Collect condensation from the air-conditioning unit. Lobb expects that doing this at his store will yield about 16,000 gallons of free water just in August. He will use the water to irrigate the grounds, and believes the savings will help him pay for an 8,800-gallon water collection tank in less than two years. “As the cost of water goes up and up, so will the savings.”

All the environmental measures in dealer Pat Lobb’s new green dealership should yield a payback in two to three years.

Burning waste oil is an economical way to heat your shop.

Collect and burn waste oil. Triple energy costs haven’t much affected dealer Matt Dagenais, Riverside Auto Group, Escanaba, Mich., because he burns used oil from his service department in a waste-oil furnace to heat his shop. It not only saves on heating fuel, but also lessens his liability for disposal. “If you consider that in some cases you pay 50 to 60 cents a gallon just to have the [waste oil] hauled away, that’s a huge savings right there,” says Dagenais.

Dealer Lee Davis, Davis Chevrolet, Lexington, N.C., also burns fuel he collects throughout the year. He estimates that burning 4,000 gallons of used motor oil and transmission fluid recouped his $14,000 investment in a year. “The first step is to calculate how much fuel you collect in a year to see if this makes sense,” Davis says.

Fluorescent bulbs can last up to 10 times longer than incandescent.

Look at lighting. Lighting can make up 40 percent of your electric bill. Compact fluorescent bulbs can last up to 10 times longer than incandescent ones and are 2 to 6 times more energy-efficient. Task lighting, such as desk lamps, not only save energy compared with overhead lights but can help make employees more productive. Turn off lights in areas out of view of customers, such as break rooms, when they’re not in use. Take advantage of natural light whenever possible. You might be able to remove some lights completely. And keep surfaces clean—dust cuts light output and longevity.

Installing voltage regulators to reduce power use has brought savings at one Findlay Automotive store, Corder says. Ferrara of Gensler Architecture suggests motion detectors that automatically shut off lights in certain rooms when no motion is detected. You can have the lights turn off completely or dim to 50 percent. The controls can be tied into a smart panel, so no separate system is needed.

Savings from insulation are “practically immeasurable,” says dealer Matt Dagenais.

Add extra insulation wherever possible. “Insulation costs just pennies per foot, and the savings are practically immeasurable,” says Dagenais, whose dealership is located on the Upper Peninsula of Michigan.

Watch use of office equipment. Put electronic office equipment in sleep mode during periods of non-use, and turn computers off after-hours. Use one printer for several employees. When buying new equipment, look for the Energy Star symbol, a sign that it meets federal standards for energy efficiency. Send interoffice memos by e-mail to save paper. Don’t buy office equipment that’s bigger than you need.

A reflective roof costs a lot up front but saves on energy costs in the long term.

Consider a reflective roof. Installing a reflective roof over a metal one can save energy costs. It can cost less than a new metal one and will ultimately increase energy savings. Reflective roofs are expensive—around $30,000—so do a careful cost analysis first.

Conserve water through plant selection. In many areas, watering leaves soil oversaturated. That’s money down the drain, dealers say. Findlay Automotive embraces the desert environment by using only desert landscaping, says Corder. In more temperate climates, dealers should choose native plants, which thrive on minimal water.

Findlay, a Nevada-based dealer group, uses only desert plants, such as this cactus.

Don’t short-circuit your own system. NADA Dealer Academy management instructor Robert Atwood sees many dealers who try to take shortcuts around the energy-efficient systems they install—for instance, not using low-watt bulbs as specified. “That often ends up costing them money.”

Monitor your energy use. Measure use rates before and after conservation measures to track success. Local utilities often offer free energy audits. And take advantage of federal tax incentives in the Energy Policy Act of 2005 (see www.energytaxincentives.org).

Turn computers off when not in use.

(To order NADA’s A Dealer Guide to Energy Star: Putting Energy Into Profits (members $30; nonmembers $50), e-mail me@nada.org or call 800.252.NADA, ext. 2.)

Nancy Dunham is a freelance writer based in Alexandria, Va.