The Golden State welcomed around 270 million tourists in 2023, creating both opportunities and challenges for hotel owners. While higher occupancy rates can boost profits, managing operating costs while ensuring guest satisfaction remains a constant balancing act.
Fortunately, there are savvy, cost-effective legal strategies available. This guide highlights five smart methods to enhance your hotel’s efficiency, with a focus on sustainable hotel energy solutions, which can cut expenses and promote environmental sustainability.
1. IMPLEMENTING ENERGY-EFFICIENT PRACTICES
Benefits of Energy Efficiency
There’s no denying that energy efficiency is one of the smartest ways to reduce overall costs. In the hotel industry, using renewable energy sources can cut expenses substantially. Hotel utility bills generally take up 4 – 6% of revenue, a substantial amount.
Energy-Efficient Lighting
Switching to LED lights is one of the easiest and most effective steps hotels can do to reduce electricity bills. LEDs are much more energy efficient than incandescent bulbs and last much longer. While LED lights typically is a higher Capex, the savings from reduced energy consumption will quickly offset this investment.
Energy Star Appliances
ENERGY STAR appliances can help hotels tidy up their high water and/or electric bills. These products are certified to meet the U.S. Environmental Protection Agency’s efficiency standards. They use less energy, helping to reduce energy costs.
HVAC Systems
HVAC systems can drain a lot of money – they generally take around 40% of a hotel’s electricity demands. Hotels typically heat and cool unoccupied rooms, and some booked rooms will be unoccupied for 12 hours on average! Improving your heating, ventilation and air conditioning system through upgrades and proper maintenance can result in significant cost savings. Additionally, installing energy-efficient lighting and programmable thermostats can further reduce energy costs.
2. LEVERAGING RENEWABLE ENERGY SOURCES
California’s Solar Mandate
California is at the forefront of the use of renewables, especially solar energy. The state has put in place some measures that would support transitions to renewable energy for hotels.
For example, the California Solar Mandate, according to which newly built homes and businesses must install solar equipment. This mandate is contained in the state’s Title 24 Building Energy Efficiency Standards. For hotel owners, the regulation is not only a regulatory requirement, but also an opportunity to significantly improve their profits and environmental footprint. By installing solar panels on their roofs and on their grounds, hotels can significantly reduce their operating costs and improve their financial health through reduced electricity bills.
SolarCo Energy PPA Loan
Soalr Energy for hotels can cost hotel owners a pretty penny, which may stop owners from even considering it.
This is where a PPA loan comes in.
In a PPA, SolarCo Energy is responsible for the installation and maintenance of the installed solar panels. The Hotel then agrees to purchasing the produced electricity at a fixed rate which usually is lower than the rate of the local utility.
Thus, it offers the advantage of obtaining first energy savings with a small investment at the start.
How SolarCo Energy PPA Loan Works
- Assessment and Proposal: For every hotel solar energy solution project, SolarCo Energy evaluates the energy requirements and roof space.
- Installation: SolarCo Energy takes care of procurement, engineering and installation from start to end. That means minimal to no disruptions to hotel operations.
- Maintenance: SolarCo Energy also takes care of ongoing maintenance for the duration of the project.
3. UTILIZING TAX CREDITS & INCENTIVES
- Federal Investment Tax Credit (ITC).
The Federal Investment Tax Credit (ITC) provides businesses an opportunity to take a percentage of the costs incurred in putting up a solar energy system as a tax credit allowed from the federal taxes. For systems installed till the end of the year 2022, it has a 26% tax credit, while in 2023 22%, and from 2024 it is 10%.
- California Solar Initiative (CSI)
The CSI available in California pays cash incentives for the installation of solar energy systems. These rebates may lower the cost of the systems to more manageable levels making it more manageable cost-wise for hotels.
- Property Assessed Clean Energy or PACE Financing
PACE – financing includes the property owners in bottom-up financing by providing them with energy efficiency and renewable energy for hotels through a voluntary property tax assessment.
This type of finance is beneficial because it provides cash for essential improvements directly without disturbing the hotel’s monthly turnover.
4. WASTE MANAGEMENT AND RECYCLING PROGRAMS
- Recycling Initiatives
Waste and recycling solutions not only make your hotel attractive to the eco-friendly crowd. California’s SB 1383 mandates entities covered by the law to cut down on the disposal of organic materials.
Hotels with on-site food facilities and 200 rooms or more are considered Tier 2 food waste generators.
Penalties can be hefty:
The first violation can lead to a $50-$100 fine per violation, second violation at $100-$200 per violation, and third or subsequent violations at $250-$500 per violation.
- Composting Programs
Food waste can clog up not just a hotel’s facilities but also expenses – state and local laws have hefty fines.
Transform food waste to black gold through vermicomposting. Having Red wigglers or African nightcrawlers convert your food waste to rich and fertile vermicompost can be a great sideline or re-used for landscaping.
5. WATER CONSERVATION MEASURES
- Benefits of Water Conservation
Water conversation is very important, especially in California where seasons of dry weather or a drought can be encountered frequently.
The savings can amount to considerable cuts in water costs, which in turn helps the sustainability of the hotel.
- Low-Flow Fixtures
Various water-saving devices such as low-flow faucets, showerheads, and toilets will help to save water without affecting the visitors.
These fixtures are created to consume less water and at the same time, they can be able to support more pressure and flow of water.
- Greywater Recycling Systems
Greywater recycling systems are used to treat sink, shower, and laundry wastewater to be used again in irrigation and other purposes.
This diminishes the need for fresh water thus cuts on water bills.
- Landscaping with Native Plants
The following is one of the benefits of landscaping with native plants: Fewer amounts of water are used when native plants are adopted in landscaping.
These are plants that naturally grow in a given region; they are efficient in terms of water and the frequent maintenance needed unlike for example exotic plants.
Conclusion
Are you ready to advance your hotel’s savings further? Contact SolarCo Energy today to find out more about how to get the PPA loan to kick-start solar energy and reduce your cost of power. We jointly perfect the strategy for your hotel to become more ecological and profitable.
