Anyone Can Afford State of the Art: Making Smart Metering Accessible for All
The Best ROI in Property Investment
Investing in automated smart metering technology provides one of the best returns on investment (ROI) for any size campground or RV resort. It’s not just about upgrading to the latest technology—it’s about making a smart financial decision that pays off in multiple ways.
Affordable for All Property Sizes
You might think that only large properties can afford state-of-the-art metering technology, but that’s not the case. Even the smallest park can make the shift to smart metering. Compared to upgrading a few picnic tables in your property, the investment in smart meters can provide a much higher ROI compared to such upgrades.
Here's a brief comparison on the ROI of picnic tables versus smart metering:
Imagine you have a campground with 20 picnic tables, and the cost to upgrade each picnic table is $300. The total cost to upgrade all picnic tables would be: 20 tables×$300/table=$6,000. Assume these upgraded picnic tables increase the attractiveness of your campground, resulting in an additional revenue of $500 per year.
The Return on Investment (ROI) for the picnic table upgrades can be calculated as Investment Annual Revenue Increase. The ROI on picnic tables is 8.3% (500/6000= 0.083)
Now, consider investing in smart meters for your campground. The cost to install smart meters for all sites is $10,000 for 60 metered sites. The smart meters save you $3,000 per year in utility costs by providing precise monitoring of energy usage, enabling you to identify and address inefficiencies, and encourage more responsible energy consumption by guests.
Additionally, these meters recover $2,000 per year in revenue through more accurate billing, ensuring that guests are charged based on their actual usage rather than a flat rate. This transparency not only covers operational costs but also helps capture revenue that might have been lost due to under billing or flat-rate pricing. The improved management and billing process also makes it easier to charge for transient sites, opening up new revenue opportunities that were previously difficult to manage.
The total annual benefit is: $3,000+$2,000=$5,000
The ROI for the smart meter investment is: $5,000 ($5000/$10,000=0.5 or 50%)
So, to recap each ROI:
- Picnic Table Upgrades ROI: 8.3%
- Smart Meters ROI: 50%
A 50% ROI is an amazing return, especially when compared to the relatively modest 8.3% ROI from upgrading picnic tables. This level of return is hard to match with any other single investment you could make in your park, making smart meters a clear choice for those looking to maximize their investment and enhance operational efficiency. Investing in smart metering is not just a financial decision; it’s a strategic move that can significantly boost your campground’s profitability and appeal.
Capital vs. Operating Expense
When it comes to property investments, understanding the difference between capital expenses and operating expenses is crucial. Capital expenses (CapEx) are the funds used by a company to acquire or upgrade physical assets such as property, buildings, or equipment. Operating expenses (OpEx), on the other hand, are the costs required for the day-to-day functioning of a business.
Investing in smart metering technology is a capital expense. While it may seem substantial initially, it leads to significant savings and efficiency improvements, reducing operational expenses in the long run. This reduction in OpEx happens in several ways:
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Billing Campers for their Electric Use: In traditional RV parks without individual metering, the park pays for the entire electric bill and often includes it in the overall rental or service fees. This approach can lead to higher operational costs for the park. By installing smart meters at each site and passing on the costs to guests, the park can offset the electric expense on its profit and loss statement.
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Reduced Manual Labor Costs: Automated metering eliminates the need for manual meter readings, saving on labor costs.
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Maintenance and Infrastructure Upgrades: Smart meters allow for monitoring of spikes and outages, which helps in early detection of issues such as water leaks and electrical faults, allowing your park staff to address maintenance more quickly, avoiding unexpected upgrade costs and equipment failure.
Recovering the Cost of the Investment
With accurate metering, property managers can effectively monitor and manage energy consumption, leading to reduced energy bills and better budgeting. This not only saves money but also promotes sustainable practices and ensures that guests who use more electricity pay their fair share.
Additionally, billing guests for their electric usage helps recover revenues previously eaten by the owners. Slightly raising reservation rates or charging an administration fee can cover investment costs very quickly, especially if there are over 100 metered sites.
The ability to accurately bill for electricity usage can also lead to reduced overall consumption as guests become more conscious of their usage. Guests can actually use an app to see how much electricity they are using in real time. This can reduce waste and lead to overall lower electricity costs for the park.
New Opportunities for Transient Sites
Our smart metering system allows a campground to track electric and/or water usage at their PC any time they choose. With smart metering integrated with your campground's property management system, it is now possible to easily start charging for transient sites without visiting the campsite meter. With instant meter readings in the cloud accessible to park staff, campgrounds can now charge for electricity used by transient guests, just as they do for long-term stays. By taking the nominal admin fee charge and passing it along to the guest, you have now turned that expense into revenue recapture. This approach allows for better cost recovery and efficient management of resources, making it a win-win for both the campground and the guests.
Amortizing Over Time
The cost of smart metering technology doesn’t have to be a significant upfront burden on your profit and loss statement for year one. By amortizing the cost over time, property owners can manage their finances more effectively. This means spreading the cost of the investment over several years, making the cost more manageable and less intimidating in each year.
Affordable and Accessible
Smart metering technology is an investment that pays for itself over time. Whether you’re managing a large property or a small one, the benefits are clear. With various financing options available, there’s no reason why any campground or RV resort should miss out on the advantages of state-of-the-art metering.
Take the next step towards maximizing your campground’s efficiency and profitability. Reach out to Wild Energy today to learn more or to request a quote!