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 In a single year, the average vending machine’s energy use will generate more than 10 times the weight of the machine in CO 2 emissions Nationwide stock of over 3 Million vending machines uses more energy than the state of Delaware

Energy Saving Options Tier 2

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

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

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

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

Market Actors: The Chain of Demand Host Site Manufacturer Bottler Vendor Operator Supply Demand 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. $$$

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% – Cans Stack Vendors: 40% –Mostly Cans

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: years –Average age of machines in use today: 5-6 years

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

Designing a Program for Tier 2 Lower/reduce incremental cost barrier Educate bottlers/operators and host sites Encourage early retirement of older models Maximum Daily Energy Consumption (kWh) Can Capacity Tier 1: Effective Apr 1, 2004 Tier 2: Effective July 1,

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

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

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

A Program to Promote Tier 2 Purchase New ENERGY STAR Machine 710 kWh/year $50 Up to $200 Install ENERGY STAR Refurbishment Kit on old machine 1,728 kWh/year $121 Up to $200 Replace Existing Machine with ENERGY STAR Machine 1,728 kWh/year $121 Up to $200, less scrap value of old machine ($30) Incentives based on 1 year energy savings at $0.07/kWh Measure Annual Savings/Rebate Incremental Cost

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

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)

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

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

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

Thank You Shawn Shaw The Cadmus Group, Inc. Supporting Kate Lewis US EPA ENERGY STAR