Innovations for Service: Economies of Scale

Knowledge

When we think of the cost of heating and cooling, it is usually restricted to our monthly utility bill. What often is overlooked are related expenses such as the equipment and installation, the insurance related to that building asset, chemical costs, service contracts, and system maintenance. In addition, there may be lost revenue since the space taken up by the system equipment cannot be leased. 

District energy offers a cost-effective alternative. Foremost, since the heating and cooling products are generated from a single centralized production plant, by sharing in the operational expenses, customers benefit from the economies of scale. 

District energy provides valuable benefits, including: 

  • Lower capital and labor costs 
  • Highly reliable 
  • Long-term financial security and cost stability 
  • Additional leasable space 
  • Access to capital for infrastructure investments and upgrades 

Operating Personnel 

District energy is produced at a production plant and delivered to a building for direct use. Building owners benefit by reducing or eliminating the need to have dedicated personnel to operate and maintain on site HVAC equipment. The result is lower operating costs and higher profits. 

Insurance 

By eliminating the risks associated with on-site boilers and fuel storage from, both property and liability insurance costs may be significantly reduced. 

Usable Space 

In building equipment, especially large HVAC systems, take up valuable square footage, not to mention create noise while in operation. With district energy there is no on-site equipment, so usable and potentially leasable space in the building increases. 

Equipment Maintenance 

Since district energy eliminates the need for on site HVAC production equipment, there is proportionately less equipment maintenance, resulting in reduced operating expenses and maintenance staff. 

Higher Efficiency 

District energy’s central production plant replaces dozens of isolated heating and cooling systems. As a result, higher thermal and emission efficiencies are achieved as well as lower carbon emissions. 

Interested in Learning More?

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