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Rebates amp up ROI on supermarkets’ energy-saving projects

Rebates amp up ROI on supermarkets’ energy-saving projects

Grocers can get money back to offset the price of many cost-cutting improvements. Sponsored by Hillphoenix.

Supermarkets lead the pack for power consumption — outpacing even hospitals for energy use per square foot, according to U.S. Department of Energy metrics. And the demand for energy in the aisles is only growing.

Grocers are maximizing lighting to create compelling displays and in-store destination

centers. And they’re also devoting more store space to refrigerated and frozen food cases to accommodate consumers’ increasing interest in fresh and high-quality frozen foods. What’s more, lighting and refrigeration that isn’t energy efficient can make heating and air-conditioning systems work harder. Add it all up, and it’s no wonder that energy is the second-highest operating expense for food retailers, after labor.

But there’s good news for supermarkets — it pays to save electricity. The Department of Energy estimates that every dollar saved in electricity costs has the same impact on a food retailer’s profit as increasing sales by $18.

A 50,000-square-foot store can cut its annual spend on electricity for refrigeration and lighting by as much as 44 percent by making energy-efficient upgrades. Factor in the beneficial effect on HVAC systems, and total store energy savings could be 47 percent or more.

The bottom line: Reducing energy consumption improves supermarket profitability, which makes most energy-savings store initiatives (see sidebar) worth the investment. But what’s even better is that grocers can get money back to offset the price of many of these cost-cutting improvements.

State and local utilities offer rebates and other incentives that lower the cost of energy-efficiency projects. Programs vary by location, so it’s important to know what’s offered in a particular area. Understanding what’s available, navigating the application and approval process, and coordinating logistics to sync with other in-store projects can be time-consuming – even daunting – for retailers whose primary business is to sell groceries.

Ways to cut energy use — and expenses

Door retrofits for open cases. Operational savings come from reduced refrigeration and total power loads. In a typical five-deck dairy case, for example, annual savings can be as much as $97 per foot.

Sweat-reducing retrofits. Anti-sweat heater controls monitor temperature and humidity in the store, and pulse door heaters control condensation. Potential annual savings is more than $60 per door.

LED lighting retrofits. Replacing fluorescent lighting with T8 LED lighting offers potential energy and maintenance savings of more than $16 per lamp over a year.

Low-heat door retrofits for freezers. Compared with heated doors, low-heat doors can save as much as $114 per door per year.

Fan motor upgrades. Replacing evaporator-fan motors in walk-in coolers with electronically commutated motors, or ECMs, can save $100 per motor. For refrigerated display cases, the switch from split capacitor motors to ECMs can save $39 per fan.


A good solution is to work with a full-service contractor who specializes in energy improvements in grocery stores. Ask for references to make sure they really know their way around rebates and incentives. Those who do can ease the process and ensure supermarkets take full advantage of incentives. The right contractor can advise which energy-efficient technologies qualify for incentives and recommend high-impact, cost-effective improvements that will work in a particular store.

Ask if the contractor does initial energy audits, can identify applicable incentives and knows how to manage an energy-efficiency project from start to finish. A turnkey solution like this minimizes hassles and offers grocers a maximum return on investment.
“We have customers who have retrofitted open refrigerated cases with energy efficient doors at no cost after applying utility rebates,” said Jonathan Tan, vice president of Energy Services for Hillphoenix’s The AMS Group. “Incentives are there for the taking, and grocers should be benefiting from them.”


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