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Saving Energy in Vending Machines: Opportunities for the Regional Technical Forum Shawn Shaw

Saving Energy in Vending Machines: Opportunities for the Regional Technical Forum Shawn Shaw The Cadmus Group, Inc. September 2006. Vending Machine Background. The average vending machine uses around 3,500 kWh per year, enough to power 7 residential refrigerators

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Saving Energy in Vending Machines: Opportunities for the Regional Technical Forum Shawn Shaw

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  1. Saving Energy in Vending Machines: Opportunities for the Regional Technical Forum Shawn Shaw The Cadmus Group, Inc. September 2006

  2. Vending Machine Background • The average vending machine uses around 3,500 kWh per year, enough to power 7 residential refrigerators • In a single year, the average vending machine’s energy use will generate more than 10 times the weight of the machine in CO2 emissions • Nationwide stock of over 3 Million vending machines uses more energy than the state of Delaware

  3. Energy Saving Options Tier 2 Tier 2

  4. ENERGY STAR Tier 2 Features • Efficient T-8 lighting • ECM evaporator fan motor • Improved insulation • Variable speed compressor • Time of day low power mode software

  5. ENERGY STAR Tier 2-The Best Option for Energy Savings • 1,728 kWh/year savings that are • Stable • Persistent • Track-able • Achievable in either new machines or as a refurbishment to existing units • Additional 20+% energy savings from setting onboard software in applicable locations • Has no impact on customer experience • Maintains visibility/sales presence • No impact on cashless vending • 0.1kW/machine peak demand reduction • ENERGY STAR machines are compatible with VendingMi$er

  6. Time-Based Control Software • Energy control software is available on all ENERGY STAR and many other later-model vendors • Software performs 2 functions, based on day/time • Turns lights off and on • Sets storage temperature • Programming takes <10 minutes by hand, faster with modern wireless controllers

  7. Potential Software Savings • Savings of 20-30% are readily achievable • At ZERO added cost • With NO IMPACT on customer satisfaction

  8. Market Actors: The Chain of Demand Demand Host Site $$$ Vendor Operator Bottler Manufacturer Supply The Host Site is the “Demander in Chief” of the Vending industry-all downstream demand is driven based upon the desires of the Host Site.

  9. The Vending Market Today Sales • 100,000 New Machines/Year • 50-60k Refurbishments • 75% of new machines meet ES Tier 1 • Glass Front Machines: 60% • 360-405 Cans • Stack Vendors: 40% • Mostly 500-600 Cans

  10. But We Still Have Work To Do… • Tier 2 machines are available to bottlers but are not being purchased • $50-$200 Incremental cost (new machine) • Slow replacement of existing machines inhibits market penetration • 3+ Million vending machines installed • Few new locations being added • 100,000 New machines purchased annually • Typical machine life: 12-15 years • Average age of machines in use today: 5-6 years

  11. Vending Machine Replacement • ~10 Years to replace current stock of inefficient machines • Over 500 TWh savings possible if 10% of sales are Tier 2 “Breaking Open” the Vending Machine Market to Tier 2 Machines is Key to Huge Energy Savings

  12. Designing a Program for Tier 2 • Lower/reduce incremental cost barrier • Educate bottlers/operators and host sites • Encourage early retirement of older models

  13. Reducing Incremental Costs of ENERGY STAR Machines • New machine purchase • Baseline: ES Tier 1 • Tier 2 Savings: 710 kWh/year • Incremental Cost • Glass front machines: $200 • Stack Vendors: $50 • Retrofit Machines • Compare to standard machine • Savings: 1,728kWh/year • Incremental Cost: $150-$200

  14. Education and Outreach • Drive demand at host sites • Use ENERGY STAR outreach materials • Webcasts • Fact sheets • Calculators • Focus on high impact sites • Colleges • Retail chains • School districts • Showcase bottlers offering ENERGY STAR • Online directory for vending RFPs • Mass mailing to large utility customers

  15. Early Retirement of Old Machines Combine retirement with new machine purchase • An additional 1200 kWh/year savings over new machine purchase alone • Guarantees replacement of inefficient models by new, efficient units • Pre-2000 models could use 13+ kWh/day Retiring old machines will generate far more savings than displacing new machine sales alone

  16. A Program to Promote Tier 2 Incentives based on 1 year energy savings at $0.07/kWh Measure Annual Savings/Rebate Incremental Cost

  17. The Program Continued Who Gets the Rebate? • Machine owners • Host sites and manufacturers already benefit • Control purchase and placement of machines How are benefits verified? • New/Refurbished machines ($50) • Bill of sale or contract with host site • Retire/replace old machines • Split incentive ($121) • New machine incentive($50)+ Retirement incentive($71) • Verified through bill of lading to scrap yard and bill of sale from manufacturer

  18. Cost Effectiveness • 1,000 Machines • 50% Refurbished • 40% retired/replaced • 10% new purchase • 3 Year Savings: 4,878,600 kWh • Incentive Costs: $113,834 • Administrative Costs: $25,000 • Total Cost: $138,834 ($0.028/kWh)

  19. The Role of ENERGY STAR: Supply and Demand • Drive demand for qualified vending machines • Targeted outreach to host sites • Large retail • Higher education • K-12 • State and local government • Increase supply of qualified vending machines • Promote business case to operators and bottlers

  20. ENERGY STAR Offerings • Marketing materials • Sample procurement language • Product lists • Energy savings estimates/calculators • Field studies/verification

  21. Success Stories • Wal-Mart • SUNY Buffalo • University of Michigan • 5 Colleges • City of Cambridge DPW • Davis School District • State of Massachusetts • Dartmouth College • UPS • GM

  22. Thank You Shawn Shaw The Cadmus Group, Inc. Supporting Kate Lewis US EPA ENERGY STAR Lewis.kate@epa.gov sshaw@cadmusgroup.com

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