Manufacturers are among the top energy users: The industrial sector accounts for 51 percent1 of the world's energy consumption and 30 percent2 of consumption in the U.S. With energy such an important part of their operations, manufacturers already tend to be energy savvy.

Still manufacturers could save a lot more energy. A report by McKinsey found that most manufacturers have achieved only one-sixth of their energy savings because they are not pursuing a systematic energy strategy.3 The same report found that manufacturers can reduce their energy use by 10 percent with small investments and up to 35 percent with large investments.

Given that energy is often a key budget input for manufacturers, having a smart energy conservation strategy is crucial to the bottom line. How can your facility tap into greater energy conservation opportunities?


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Publicly display energy use data

Energy facility managers often track energy on an ongoing basis with computer software and digital displays. Making this data public to those who work in the facility can lead to energy savings. Place digital energy displays in public areas so that employees will see how well the facility is performing. Such visual prompts may encourage people to shut off lights when they leave the room and pursue other voluntary energy-efficiency measures.


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Monitor the energy use of each device

You may know how much energy your facility is using at any given time. But do you know which individual pieces of equipment are wasting energy? Device-level wireless electricity monitoring sensors can provide you with this kind of granular data. Easy to put in place, these tiny devices can show you exactly which pieces of equipment are operating inefficiently.

This insight may create a double benefit, since in some cases the energy waste signals an equipment malfunction. You may be able to repair or replace the equipment before it fails and possibly disrupts production.


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Install variable-speed drives

Variable-speed drives help save electricity and preserve the longevity of equipment. Conventional motors operate at full power all of the time, even when full power is not needed. By adding variable-speed drives, motors function at a level in keeping with load requirements.


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Upgrade boilers to run on natural gas

Natural gas offers lower and more stable fuel prices compared with liquid petroleum-based fuels, but other benefits include improved sustainability metrics and the potential for long-term savings.4

If the conversion process seems daunting, it doesn't have to be—some energy providers can manage the conversion for you, as well as supply your natural gas.


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Install a combined heat and power system (CHP)

These systems are highly efficient because they use one source of fuel to produce two forms of energy: electricity and heat.

Power plants create heat as they produce electricity. Conventional plants waste the heat, releasing it into the air or water. CHP plants capture and use the heat to warm or cool buildings, create steam or hot water, or to assist in industrial processes. Using CHP therefore has the potential to reduce your energy costs.


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Develop a microgrid

These small-scale, onsite electric grids can offer efficiencies, especially if your facility has more than one building on the premises and operates with more than one onsite generation source, such as CHP, diesel generators or renewable energy.

As an added advantage, microgrids also give you a source of reliable power if the central grid fails.


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Participate in demand response

Offered by your energy provider, demand response programs may pay you to reduce your energy use when the electric grid is under strain. When arranging demand response, a curtailment service provider should be sensitive to your need to meet production quotas.


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Seek out energy efficiency incentives

Some rebates, tax credits and other financial incentives are available through utilities and state and federal agencies to reduce the cost of several of these measures for manufacturers.

Manufacturers can find information about incentives throughout the U.S. in The Database of State Incentives for Renewables & Efficiency (DSIRE), managed by the North Carolina Clean Energy Technology Center and funded by the U.S. Department of Energy. The database offers state-by-state listings as well as information on federal incentives.

In Canada, incentives are available through the federal ministry, Natural Resources Canada, to help manufacturers reduce energy consumption. The ministry offers funding for "process integration," which encourages a facility-wide approach rather than a piecemeal approach to energy efficiency. The Canadian government offers incentives of up to 75 percent for an initial process integration study. The program also funds energy conservation measures, high-performance equipment and capital projects.5 The Ministry offers more information on its five main energy efficiency programs on its industry webpage.



Becoming an energy saving manufacturer doesn't have to be a complex task, especially if you work with an experienced supplier that offers diverse, customized supply- and demand-side energy solutions. Direct Energy Business can help you buy less of what we sell, offering a Total Energy Management approach to lowering energy costs with data and analytics, energy efficiency and alternative energy solutions, including:


Get started today!

Download our free Total Energy Management Guide for Manufacturers now!




1. U.S. Energy Information Administration, "How much energy is consumed in the world by each sector?" retrieved June 19, 2015
2. American Council for an Energy-Efficient Economy, "Outsourcing Energy Performance: Its Potential for Industrial Energy Efficiency Programs," March 18, 2014
3. McKinsey & Company; Stephan Mohr, Ken Somers, Steven Swartz, and Helga Vanthournout, McKinsey on Sustainability & Resource Productivity "Manufacturing resource productivity," pg. 38,Summer 2012
4. FuelEconomy.gov, "Natural Gas," retrieved April 9, 2015; U.S. Department of Energy,
5. Alternative Fuels Data Center, "Fuel Prices," January 2015
6. Natural Resources Canada, Funding (for Process Integration), retrieved February 2016.

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