Strategy

Powering the Future: Intelligent Energy Procurement for Senior Care Facilities

Senior living facilities in New England face significant challenges in energy procurement. They must find creative ways to balance cost efficiency with growing sustainability demands. Senior living managers tasked with energy procurement must navigate complex energy markets while securing reliable service for vulnerable residents.

New England’s unique energy landscape presents several hurdles, including a lack of indigenous energy sources that lead to higher transportation costs and create vulnerability to supply interruptions. Deregulated electricity markets may not provide adequate incentives for new generation capacity. Siting new energy infrastructure is also difficult due to fragmented local decision-making and community concerns.

As the region shifts toward cleaner energy sources, senior living facilities must adapt to:

  • An increasing emphasis on environmental, social, and governance (ESG) initiatives.
  • A growing demand for renewable energy options, such as solar power.
  • A need to reduce energy consumption and costs without compromising resident comfort.

With over one million seniors in assisted living facilities across the U.S., addressing these challenges allows senior living facility managers to reduce operational costs and contribute to a more sustainable future. Energy-efficient practices lead to improved comfort for residents, lower utility bills, and a reduced carbon footprint.

How is senior living energy procurement changing?

Market trends, sustainability initiatives, and regulatory requirements continue to drive changes in senior living energy procurement. The New England building energy management system market is experiencing rapid growth, with an estimated value of $767.6 million in 2025 and a projected CAGR of 10.7% from 2025 to 2030.

This growth is fueled by:

  • Stringent energy efficiency regulations in states like Massachusetts, Vermont, and Connecticut.
  • An increased focus on sustainability and green building initiatives.
  • An integration of technologies such as the Internet of Things (IoT), Artificial Intelligence (AI), and big data analytics in energy management.

A growing emphasis on ESG initiatives

Environmental, Social, and Governance (ESG) factors are gaining prominence in the senior living sector. ESG investments are growing within the industry, attracting attention from investors and operators.

Implementing efficiency measures to comply with ESG standards can produce significant cost savings and boost a facility’s reputation among environmentally conscious residents. Senior living communities pursuing green building certifications like LEED Gold from the U.S. Green Building Council demonstrate their commitment to sustainability.

The impact of renewable portfolio standards

Renewable portfolio standards (RPS) are policies that require a minimum percentage of electricity to come from renewable sources. RPS mandates require utilities and suppliers to obtain a specific percentage of electricity from renewable sources, impacting costs for end users. These standards influence senior living energy procurement strategies significantly.

As RPS percentages increase, associated costs are expected to rise, affecting electricity rates for senior living facilities. Some states have specific solar carve-outs within their RPS, requiring a certain percentage of renewable energy to come from solar resources, which can drive up energy costs.

Two seniors socialize in a room in a senior living facility using creative energy procurement strategies that include a Smart thermostat for better HVAC control. What are some cost-effective energy procurement strategies?

Senior living facility managers in New England are turning to some creative ways to optimize their energy procurement and consumption in the face of rising energy costs.

One of the most popular strategies is to leverage group purchasing power. Group purchasing organizations can significantly reduce energy costs for senior living facilities in several ways.

First, they aggregate demand to negotiate better rates with energy suppliers. Second, these organizations often have expertise in energy markets, helping senior living facility managers make informed decisions about contract terms and pricing. Third, some specialize in the healthcare and senior living sectors, offering tailored solutions to address the unique needs of these facilities.

Implementing energy efficiency measures

Reducing overall energy consumption is a key strategy for cost savings. Some of the most popular ways to achieve a reduction in energy usage include:

  • Installing LED lighting upgrades to reduce lighting energy use by as much as 75% (typical payback is 1-3 years).
  • Making HVAC system improvements, such as installing programmable thermostats or upgrading to more efficient units.
  • Building envelope improvements such as insulation and energy-efficient windows can reduce heating and cooling costs by up to 35%.
  • Maintaining and recommissioning building systems to identify and correct inefficiencies.

Relying on strategic energy procurement methods

Incorporating advanced energy procurement strategies can help manage price volatility and reduce long-term costs.

Three of the most popular methods include:

  • Layered purchasing involves buying portions of energy needs at different times, spreading the risk across multiple transactions. It avoids locking in high prices for extended periods and allows facilities to take advantage of market dips while maintaining budget stability.
  • Hedging uses financial instruments to protect against adverse price movements. It can include futures contracts, options, or swaps to lock in prices or cap costs. It requires careful risk management and market analysis by an energy procurement specialist.
  • Hybrid approaches combine fixed-price contracts with index-based pricing to balance budget certainty with market opportunity. Some senior living facility managers opt for a fixed price for a portion of their load and float the remainder with the market.

Which sustainability initiatives impact senior living energy procurement?

Balancing cost efficiency with environmental responsibility is a priority for some New England senior living facilities. Their energy procurement managers explore sustainable initiatives that can reduce their carbon footprint while leading to significant long-term cost savings.

Exploring renewable energy options is one way they can achieve their goals. Some of the most popular approaches include:

  • Solar photovoltaic (PV) systems to reduce electricity costs and the dependence on the energy grid. In New England, the average commercial solar payback period is 5 to 7 years, with systems typically warranted for 25 years. The Federal Investment Tax Credit (ITC) offers a 30% tax credit for solar installations, making them more financially attractive to senior living facility managers.
  • Solar plus storage combines solar PV with battery storage systems to allow facilities to store excess energy for use during peak demand periods or grid outages. This option provides critical backup power during emergencies to maintain resident safety and comfort. It helps maximize the value of solar investments by enabling load shifting and demand charge reduction.
  • Community solar allows facilities to benefit from solar energy without on-site installation. This process is useful for facilities with limited roof space or those in historic buildings with renovation and addition restrictions.

Implementing energy-efficient technologies and practices

Embracing solar energy isn’t the only way senior living facility managers can reduce energy consumption without sacrificing the comfort or convenience of their residents.

Some other key technologies and practices include:

  • Smart building management systems that integrate HVAC, lighting, and other building systems for optimal energy use. They can reduce energy consumption by up to 30% through automated controls and data-driven optimization.
  • High-efficiency appliances and equipment that use less energy than standard models. Replacing old equipment with high-efficiency alternatives can produce up to 50% savings.
  • Water conservation measures like low-flow fixtures and water-efficient appliances can reduce water heating energy by up to 15%. Installing water reuse systems for landscaping can further reduce energy from water pumping and treatment.
  • Green building certifications like LEED or WELL provide a framework for comprehensive sustainability improvements. These certifications boost a facility’s reputation and appeal to environmentally conscious residents and their families.

Two seniors sit outside at a senior living facility that has increased its property value by using sustainable energy procurement strategies. Long-term benefits of sustainable energy solutions

Cost-savings are among the most prized long-term benefits of incorporating sustainable energy solutions. While initial investments may be higher, sustainable solutions often result in lower operating costs over time. For instance, a 500-kW solar PV system in Massachusetts could save approximately $1.5 million over 25 years.

Other perks include:

  • Increased property value. Sustainable features boost a senior living facility’s value by as much as 7%. Energy-efficient buildings often command higher rents and have lower vacancy rates.
  • Regulatory compliance. As environmental regulations become more stringent, early adopters of sustainable practices will be better positioned to comply with future requirements.
  • Resident health and comfort. Many sustainable practices, such as improved ventilation and the use of non-toxic materials, can enhance indoor air quality and resident well-being.

Sustainable energy solutions—especially those using on-site generation and storage—enhance a senior living facility’s ability to operate during grid outages or extreme weather conditions.

What are recommended energy procurement tools and resources for facility managers?

Senior living facility managers in New England must have access to tools and resources to effectively balance sustainability and cost-efficiency in energy procurement. These can significantly enhance decision-making processes and optimize energy management strategies.

Modern energy management software provides powerful tools for monitoring, analyzing, and optimizing energy consumption. Real-time energy monitoring systems allow managers to track usage patterns and identify anomalies quickly. Predictive analytics can forecast future energy needs based on historical data and external factors like weather patterns.  Automated reporting features help with energy regulation and sustainability reporting requirements.

Using cost-effectiveness tests for energy efficiency measures

Cost-effectiveness tests help evaluate the economic viability of energy efficiency investments.

The total resource cost (TRC) test compares the total costs of energy efficiency measures to their total benefits. It includes utility and participant costs and benefits to provide a complete picture.

Other tests include:

  • Utility cost test (UCT) focuses on costs and benefits from the utility’s perspective. It’s useful for understanding how energy efficiency programs affect utility rates.
  • Participant cost test (PCT) evaluates costs and benefits from the senior living facility’s perspective to determine the financial attractiveness of energy-efficient measures.
  • Societal cost test (SCT) is like TRC but includes societal benefits like reduced emissions and improved public health.

Leveraging these tools and resources helps senior living facility managers make more informed energy procurement decisions. This approach balances immediate cost considerations with long-term sustainability goals.

Partnering with energy procurement specialists

Energy procurement specialists are an integral part of the process. They provide valuable expertise and market insights by staying updated on market trends, regulatory changes, and emerging energy sector technologies.

They can negotiate better rates with energy suppliers and identify cost-saving opportunities for senior living facility managers. Not sure about sustainability initiatives and their potential impact on energy costs? Energy procurement specialists can guide facility managers in the right direction.

Partnering with energy procurement specialists provides:

  • Access to market intelligence and pricing strategies.
  • Assistance in developing a comprehensive energy management plan.
  • Support navigating complex energy regulations and incentive programs.

Reassess your energy procurement strategies today

Balancing sustainability and cost-efficiency is more than a challenge for senior living facility managers in New England. It’s an opportunity for innovation and long-term success.

These strategies and tools provide a roadmap for senior living facilities to make informed decisions that benefit their bottom lines and the environment. Leveraging group purchasing power, implementing energy-efficient technologies, exploring renewable energy options, and using advanced analytics and procurement methods gives senior living facility managers the ability to reduce energy costs while enhancing their sustainability profiles.

Every kilowatt-hour saved and every ton of emissions reduced is a step toward a more resilient and environmentally responsible senior living sector. The journey toward sustainable and cost-efficient energy procurement may be challenging, but the financial and environmental benefits make it a worthy pursuit for all senior living facilities in New England.

Ready to explore your options? Schedule a consultation today to get started.

Tags: energy management energy procurement specialists energy strategy senior living facility energy procurement

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