Increased Profit
Installing a new energy-efficient warehouse heating system can be a risk-free investment with payback in less than one year followed by an ongoing annual cash benefit. The sooner you invest, the more profit you will make.
Selecting the appropriate heating system is crucial for any warehouse retrofit project.
Consider the following example: An owner replaces an existing heating system with low-cost, more energy-efficient blow-thru space heaters in a 200,000-square-foot warehouse facility. The 35 percent energy savings provides an ongoing $100,000 annual reduction in his utility bill. Let’s say the total cost to install the new heating system is $120,000, and the owner receives an EPAct tax deduction of $42,000, assuming the company is in the 35 percent tax bracket: $120,000 x 0.35 = $42,000. Based on energy savings and the tax refund, the payback on the new heating system is less than one year. In five years, the warehouse owner has achieved a $422,000 five-year net cash benefit, or profit.
This savings is calculated basically as the net cash flow during the five years, or one-time EPAct tax refund, plus the energy savings for five years less the initial cost/investment–the costs to take out the old system, buy/install a new system, and then pay a tax-services firm to do the energy modeling and on-site inspection for the tax deduction.
Typically, a new heating system also will dramatically reduce annual maintenance costs, which makes the payback period even shorter. For existing buildings with old heating systems you can also sometimes get additional tax deductions from cost segregation and pre-renovation/abandoned property studies. Check with a qualified engineered tax-services professional to determine eligibility.
Heating-system Selection
Selecting the appropriate heating system is crucial for any warehouse retrofit project. Consider the following guidelines:
EFFICIENT HEATERS
Select space heaters with energy-efficiency ratings above 90 percent to get every possible BTU out of the fuel as usable heat. However, the heater efficiency alone does not guarantee maximum energy savings for warehouse applications. Forty to 70 percent energy savings is only possible when the heating system also addresses dock-door use, ventilation requirements and stratification.