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Can you afford not to invest in smart building technology?

There are a number of external factors that can impact the success and productivity of your business, and you might think many are outside of your control. But here Mark McLoughlin, Key Account Manager – Siemens Industries and Markets, Siemens Financial Services, examines the technology available to mitigate 2 key issues: rising energy costs and false alarms, and explores how finance can help organisations access them.
Rising energy costs: Research suggests that businesses may be paying 50% more in 2020 for power than they were in 2016. Since energy is a necessary expense, businesses may find they are unable to invest in activities such as developing new product lines, employing new staff or acquiring new equipment, because funds are needed to meet rising energy costs.
The technology: Non-domestic buildings are responsible for between 10% and 15% of carbon emissions. Smart buildings have the potential to save approximately 15% to 25% on energy costs.
Smart controls give buildings a “central nervous system” that balance and reconcile competing interests such as energy minimisation, occupant comfort and grid stability. Return on investment (ROI) from smart building controls will vary, depending on external climate, cost of power, and other factors. For example, our research shows that in the manufacturing sector cost savings from energy optimisation programmes are in the region of at least 25%, compared with just 6% actually achieved from reduced energy usage in UK manufacturing in the last five years.
Fire and false fire alarms: It is estimated that by 2020 UK PLC could stand to lose as much as £10 billion to commercial and industrial fires. In addition, false fire alarms cost the UK economy £1bn a year.
The technology: Intelligent solutions aim to determine the cause of the emission enabling the system and its operators to react accordingly. If the system detects fumes such as cigarette smoke, deodorant fumes, or burnt toast it can give the operator time to manage the situation before instigating a full alarm or building evacuation and alerting the fire brigade. This means that when the detector is activated, occupants know that it’s a real emergency.
The benefits and potential savings of smart building technology are one thing, finding practical affordable and sustainable ways of achieving smart-building conversion is another.
Pioneering landlords and owner-occupiers are therefore increasingly looking to solutions whereby the supplier of a “service” such as smart-building conversion deploys financial techniques that remove the need to devote own capital, bundling the conversion into a monthly fee across an agreed-upon contractual period. In other words these financing arrangements harness future energy savings in order to pay up front for the technology that enables such savings in the first place, as well as other smart building advantages. This is leading to the rise of a concept called “Smart Buildings as a Service“ – sometimes called “servitisation.”
These are just two examples of the many challenges faced by building owners that can be managed with smart building technology. Nevertheless, making the initial investment in such systems is itself a challenge. Luckily, smart finance solutions exist that make the investment sustainable and harness the savings made to make smart building technologies accessible.
To learn more ways that smart building technologies can impact your business see our report: www.siemens.co.uk/finance/costofnotinvesting

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