How to Use Building Energy Management Software to Increase ROI

In today's rapidly evolving commercial real estate landscape, energy efficiency isn't just a buzzword—it's a business imperative. With increasing pressure from tenants, regulatory bodies, and market forces, optimizing energy use can significantly impact your bottom line. 

Enter Building Energy Management Software (BEMS), a technology solution that empowers property managers and owners to monitor, control, and optimize energy consumption across their portfolios. But beyond its environmental benefits, a well-implemented BEMS can drive substantial financial returns. 

Let’s explore how building energy management software can help you increase ROI, reduce operational costs, and enhance property value.

Understanding Building Energy Management Software

Before diving into the specifics of how this software drives positive ROI, it's crucial to understand how building energy management software works. A BEMS is a comprehensive system integrating hardware, software, and communication technologies to monitor and control a building's energy usage. By collecting real-time data from various energy-consuming systems—such as HVAC, lighting, and electrical—BEMS enables property managers to make data-driven decisions that enhance efficiency and reduce waste.

The software aspect of BEMS is where the magic happens. It collects data from sensors and meters throughout the building, analyzes this data to identify inefficiencies, and then recommends or automatically implements solutions. This can include anything from adjusting boiler settings during off-peak hours to turning off unnecessary lighting in unoccupied areas. The goal is to ensure that energy is used as efficiently as possible without compromising tenant comfort or building performance.

The Financial Impact of Energy Efficiency

Energy costs are one of the largest operating expenses for commercial properties, often accounting for 30% or more of total operating expenses. Given this, any reduction in energy consumption can have a direct and substantial impact on your property's net operating income (NOI). This is where building energy management systems come into play. By optimizing energy use, BEMS can help reduce these costs, leading to higher NOI and, ultimately, increased property value.

For instance, building energy management software, such as smart heating controls, can reduce your fuel costs by 21% in any of your buildings. This type of software quickly pays for itself through these savings, making it an essential investment for any large building.

However, the financial benefits extend beyond simple cost savings. Energy-efficient buildings often command higher rents and enjoy lower vacancy rates, helping owners avoid costly fines from climate regulations, such as New York's Local Law 97 and Boston's BERDO. Additionally, buildings with high energy efficiency ratings can qualify for tax incentives and rebates, further enhancing ROI.

How Building Energy Management Software Increases ROI

1. Reducing Energy Costs: The most immediate and measurable impact of BEMS is its ability to reduce energy consumption. By continuously monitoring energy use and identifying inefficiencies, BEMS enables you to take corrective action quickly. This can lead to significant reductions in utility bills—often by 10-30%, depending on the building and its current level of efficiency. Over time, these savings add up, providing a substantial boost to your bottom line.
2. Improving Operational Efficiency: BEMS doesn't just reduce energy costs; it also streamlines building operations. Automated controls mean that you can spend less time manually adjusting systems and more time focusing on other critical aspects of property management. Additionally, the data insights provided by BEMS allow you to proactively address maintenance issues before they become costly problems. This not only reduces repair and replacement costs but also minimizes downtime, keeping tenants happy and operations running smoothly.
3. Enhancing Property Value: Energy efficiency is increasingly seen as a key factor in property valuation. Buildings that are energy-efficient are more attractive to buyers and investors, leading to higher sale prices and better returns on investment. A BEMS can play a crucial role in achieving and maintaining a high energy grade for your building which further enhances the property's marketability and value.
4. Boosting Tenant Satisfaction: A comfortable, well-maintained building is critical for tenant retention. BEMS ensures that energy systems run optimally, providing consistent comfort levels while minimizing disruptions. Additionally, tenants appreciate the transparency that BEMS can provide through energy usage reports and sustainability initiatives. Satisfied tenants are more likely to renew leases, reducing turnover and associated costs, which in turn improves ROI.
5. Meeting Regulatory Requirements: Governments and municipalities increasingly enact stringent energy efficiency regulations for commercial buildings. Non-compliance can result in fines, penalties, or even the loss of operating licenses. By using BEMS, you can ensure that your properties meet or exceed regulatory standards, avoiding costly legal issues and demonstrating your commitment to sustainability—a factor that can also enhance your property's reputation and attractiveness to tenants.

Building energy management software offers commercial property managers and owners a powerful tool for increasing ROI. By reducing energy costs, improving operational efficiency, enhancing property value, boosting tenant satisfaction, and ensuring regulatory compliance, BEMS delivers tangible financial benefits that go beyond simple cost savings. However, to fully realize these benefits, it's essential to approach BEMS implementation strategically—assessing your current energy use, choosing the right software, investing in training, and committing to ongoing monitoring and maintenance.

As energy efficiency continues to be a critical factor in commercial real estate success, now is the time to invest in building energy management software like Runwise. This platform reduces fuel costs and ensures compliance with regulations such as New York's Local Law 97, with installations that can be completed in just one day without disruptive wiring. If you're ready to enhance your property’s performance and increase your ROI, consider booking a demo today to see firsthand how Runwise can transform your building's efficiency and compliance.