At this year’s National Automobile Dealers Assn. show, everyone was talking about electric cars. What seemed like a novelty just five years ago is now on the way to mainstream, bringing new challenges to car dealerships.
One of the biggest challenges is controlling rising electricity costs in this increasingly complex landscape. In the past, car dealerships didn’t have to worry about their electricity bills, but that’s changing for several reasons:
- EV chargers increase electrical loads
- Electricity rates are rising and getting more complicated; utilities charge not only for how much electricity you use, but when you use it
- It is costly to manage these changes and costs manually
You can reduce electricity costs by installing solar panels and batteries, but they are expensive and may only help pay half your bill. This is largely due to application fees.
Application fee for franchise car dealerships are like speeding tickets. You can drive at the speed limit all month, but it only takes a few minutes of speeding to get a ticket. The same goes for application fees. Instead of being based on your overall energy consumption, they are based on your single highest 15-minute energy peak of the month. You might be using a relatively modest amount of energy for most of the month, but if you only have one 15-minute peak, your bill can increase dramatically, or even double.
EV chargers are just one cause of the three most common “on-demand speeding tickets”:
- Thermostat tickets: Although electric vehicle charging will soon increase electrical loads, HVAC systems still account for 50% to 70% of energy consumption at most franchise car dealerships. Most of them are on all at once, aren’t that smart, and are set to a single temperature instead of a comfort range.
- EV charging tickets: Energy consumption can increase if electric vehicles all charge at the same time, charge during the hours of the day when energy is most expensive, and charge without coordinating with other electrical loads in the building.
- Human Error Tickets: People may leave HVAC systems on after working hours, or in warehouses or offices that are not in use during the day.
It’s a good idea to analyze your past energy usage to see when spikes have occurred that could have cost you a speeding ticket. But it would take 24/7 attention to manually manage your car dealership’s energy just to avoid that 15-minute speeding ticket mistake. The good news is that you can reduce the cost of those on-demand speeding tickets with a simple and cost-effective solution: intelligent and automated demand management software.
Demand Management software allows you to save money by shifting some of your electricity consumption to periods of lower utility rates or times when a peak will not occur, managing your building in comfort ranges and automating energy decisions so you don’t have to think about it. .
For example, if your software predicts a spike is coming because the temperatures outside the showroom are going to get hot at 10 a.m., the software can slowly pre-cool your building to avoid the spike while still maintaining a comfortable temperature. The software is also smart enough to coordinate and stagger EV charging times and building cooling times to avoid spikes.
Look for demand management software that:
- Requires minimal installation and utilizes your existing building, HVAC equipment and energy management systems, without the need for fancy upgrades or replacements. Even older HVAC systems can be managed efficiently with smart thermostats connected to demand management software.
- Is cloud-based to enable updates and data processing that can forecast peaks and update when utility rates change.
- Features like cruise control with a clean and simple dashboard and set-and-forget functionality that doesn’t get in the way of business operations.
- Includes built-in pricing structures for each US region
- Lets you stay in control by setting schedules, zones and overrides as needed. This should include monthly and annual reports that you can refer to to adjust the system as needed from time to time.
Compared to solar and energy storage, a demand side management system is very cost effective. The payback period for good demand management software is typically six months to two years.
Casey Miller is the Chief Commercial Officer of Extensible Energy, a provider of demand-side billing and energy management software for auto dealerships across the United States.