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Hotel Energy Reduction Strategies

Energy and Water Conservation Can be one of the Most Impactful Practices a
Hotel can Embrace to Improve Their Bottom Line

by Scott Parisi
July 25, 2012

Sustainability in the hospitality industry has increased in awareness and to the point sustainable operations from corporate travelers, meeting planners and leisure guests may now be expected. Almost all hotel franchise groups, hotel management companies and individual hotel operators have taken steps in their journey to reduce their environmental impact. While the green movement is growing, many hotel owners and investors still remain skeptical of vendors, consultants and technologies that are pushing green and environmentally friendly products and services.

Proven hotel energy technologies funded by incentives is creating opportunity for green hoteliers to utilize rebates, incentives and low interest funding to reduce water and energy use. I am a veteran hotel operator who had the privilege of being General Manager at the first LEED Certified Hotel in the country back in 2001. In 2008 I founded and became President of EcoGreenHotel, an independent solutions company focused in supporting hospitality sustainability. I humbly would like to share my experience with you in efforts to raise increased awareness on how energy and water conservation can be one of the most impactful practices a hotel can embrace to improve their bottom line. With a focus on energy cost and usage reduction I will share my view on energy technologies, select vendors that have a proven track record and measurable success. I will also share how to investigate incentives, apply rebates to energy performance projects, save and integrate renewable energy in your purchasing plan and an overall process that will create a plan that when executed will impact water and energy usage in hotels by 20%-30%.

Energy Purchasing and Integration of Renewable Energy

The first step every hotel should take to reduce hotel energy cost is to understand their unit cost for natural gas and electricity cost and whom they are purchasing their energy supply from. In several states legislation has created deregulated markets that allow hoteliers to purchase energy in a competitive fashion. If your hotel is in a deregulated market for natural gas, electricity or both you may have an opportunity to reduce your energy cost with no money out of pocket.

Is your hotel in a Deregulated Market? The below map shows all states in blue that fall in deregulated markets.

Renewable and Sustainable Power
Renewable energy credits (RECS) are the forms of electricity that are generated from renewable resources such as wind, solar, hydro and biomass. One renewable energy credit is equivalent to one-megawatt hour of electricity generation. Hotels throughout the country can integrate green energy into their energy plan knowing they are offsetting their energy load by 10%, 20% all the way up to 100%. RECs carry environmental and economic benefits - offsetting carbon emissions created by generation of electricity using fossil fuels. RECs support the economies of areas where renewable generation occurs. In today's market, increased awareness of renewable energy programs has lead consumers to support hotels who are actively seeking to reduce their carbon footprint. Acquiring RECs and obtaining certification is an ideal way for your hotel to add value to its brand.

Energy Benchmarking

As a few of my key mentors have stated over my years in the hospitality industry "if you don't measure it you can't manage it". Once you know you are procuring the best supply price possible we must know how you compare to your piers and the breakdown your energy load in percentages by electric, natural gas and water. Hotels planning on implementing water and energy efficiency technologies must identify the percentage breakdown of water, natural gas and electricity. Comparing the water and energy load percentages is crucial to identifying where your property needs the most efficiencies. For an example if a 100 room select serve hotels energy mix shows Natural Gas to be 18% of your energy load and similar properties in the geographical area average 12% we know to focus on economizing the domestic hot water production and demand with energy efficiency technologies that attack that area. A focus on energy usage based on POR (per occupied room) and PAR (per available room) has also proven very useful identifying opportunities for reduction.

The Environmental Protection Agency's, ENERGY STAR Portfolio Manager is the most recognized benchmarking tool. Almost all major brands have provided tools and directives that mandate that each hotel is responsible for carbon and energy benchmarking.

Energy Reduction Technologies

In the past 3-5 years there have been amazing advancements in energy solutions including LED Lamps that are guaranteed for 5 years, Ozone Laundry Systems that reduce chemical usage, natural gas and water to liquid pool solutions that create a powerful pool cover to lock in humidity and heat. For every proven technology that is priced correctly, installed and serviced by a professional and a guarantee on energy savings projections there are five more vendors that don't understand guest comfort, utilizing products or technologies that have not been third party accredited or tested. A third party energy consultant who understands the hospitality industry can be a huge resource to a green hotel when integrating energy reduction technologies. A good energy consultant will assist in building benchmarking, identifying rebates; administrate technical analysis needed to achieve custom incentives, vendor negotiation of price and inclusion of energy saving guarantees and professional project management.

Rebates and Incentives

There is cash available to offset your cost and allow for low interest funding if needed. Several of local utility providers offer incentives in the form of cash rebates for select energy technologies. Most technologies eligible for local utility rebate programs have been tested and found effective for your geographical area. A great example of a successful rebate story is Hostelling International NYC. George Finn, GM and team implemented an energy performance project committing a little more than $80,000 in energy and water saving technologies. If the property utilized the NYSERDA Prescriptive Rebate Program they would have seen under $10,000 in rebates. My team and I assisted George in administrating the Custom Incentive Program. NYSERDA's Custom Incentive maxed out hitting the ceiling paying for fifty percent of entire project which was over $40,000 in cash rebates.

Low interest loan programs are available in some areas of the country offering 3%-5% funding for approved energy efficiency technologies. There are also grants available sometimes funded by federal government and sometimes funded by your local county. In Virginia Beach a commercial building owner can save on his property tax if he is operating in a energy efficient manner.

Most of the programs I referred to are ever changing and now more and more we are seeing programs with limited or de-funded programs. If we can be of service to your investigation of rebates and incentives please send me an email at

About Scott Parisi
Scott Parisi is co-founder of EcoGreenHotel, a firm that develops energy and sustainability projects for commercial buildings with a large focus on the hospitality sector. As President of EGH, Scott's day to day responsibilities include developing and implementation of energy and sustainability strategies into hotels, leveraging federal state and local utility incentives to subsidies projects and building partnerships with like minded companies that add value to EGH's client base. Additionally, Scott develops and hosts educational workshops, staff trainings and has spoke at national and regional events including AAHOA's National Convention, Green Lodging & Hospitality Conference, Boston Green Tourism Events, Philagreen Hospitality Association Events, GF Management University Sessions, National Purchasing Network Annual Expo and the Global Renewable Energy Networking Summit.


Scott Parisi

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