Contenu connexe Similaire à How to Sell Energy Efficiency Products (20) Plus de Center for Sustainable Energy (20) How to Sell Energy Efficiency Products1. Today’s Presentation
ADDRESSES ONE OF THE BIGGEST
CHALLENGES FACING ENERGY
EFFICIENCY PROJECTS
©Kingport DBA Resource Productivity Associates, 2011 1
2. Who We Are?
A strategic consulting firm that provides results-focused strategic
planning and implementation to maximize resource productivity
to meet sustainability goals of our clients.
We have provided seminars and speeches to over 1,000 busy
businesspeople—from management level to CEO—on how to
increase resource productivity in their companies.
We help companies develop a comprehensive strategy to
resource productivity in their organizations to building a more
sustainable financial future, serving as their resource
productivity coach to meet their objectives.
©Kingport DBA Resource Productivity Associates, 2011 2
3. So you want to know……
How to Sell Energy
Efficiency Projects!
Presented by: Daryl
DeJean
Emerging Technologies Associates
June 29, 2011
©Kingport DBA Resource Productivity Associates, 2011 3
4. Copyright and Permissions
Copyright in all content on this site is owned by Emerging
Technologies Associates, Inc. and Kingport DBA Resource
Productivity Associates. No materials from this presentation
may be reproduced, stored, altered or further distributed
without our prior written permission. Requests for permission
should be sent in writing to our headquarters office at the
address below.
Kingport
DBA Resource Productivity Associates
P.O. Box 5475
Santa Barbara, CA. 93150
©Kingport DBA Resource Productivity Associates, 2011 4
5. Today Starts the Journey!
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9. How Do We Bridge The Gap?
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10. Points to Ponder
• What is the “real” goal of the project?
©Kingport DBA Resource Productivity Associates, 2011 10
14. How are Sustainability and
Energy Efficiency Connected?
Sustainable energy
is the provision of
energy that meets
the needs of the
present, without
compromising the
ability of future
generations to meet
their needs.
©Kingport DBA Resource Productivity Associates, 2011 14
15. Typically, the death of a
project is based upon…..
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18. Therefore…….
http://happyhypnosis.net
©Kingport DBA Resource Productivity Associates, 2011 18
19. What is the Investment Worth?
http://www.rms.net
©Kingport DBA Resource Productivity Associates, 2011 19
23. How do I effectively “sell” and make
credible presentations of projects to the
Finance Team and Senior Management?
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28. Financial Justification of Projects
– According to US EPA, “30% of energy bills is used
to pay for energy waste” in the typical building.
– Why not use the cash flow from the avoided
energy waste to pay for new energy efficiency
projects?
– “We are paying for energy efficiency projects
whether or not we do the projects”
©Kingport DBA Resource Productivity Associates, 2011 28
30. Utilities: Largest Controllable
Operating Expense
Growing Impact on Cash Flow
Return the CASH
FLOW to
Facilities/Engineer
ing with ENERGY
STAR!
Source: BOMA: 2008 EER
©Kingport DBA Resource Productivity Associates, 2011 30
31. Leading The Team
http://askmarklittle.com/
©Kingport DBA Resource Productivity Associates, 2011 31
34. Decision-Making Process
In Whole Building Design
• Define project goals:
– energy - historic preservation
– healthy and safe - cost effective
– sustainable - aesthetic
– functional/operational
• Interrelationships and interdependencies with all building
systems are understood, evaluated, appropriately applied
• Close coordination by integrated team
• Facility performance report to show continuous
improvement
©Kingport DBA Resource Productivity Associates, 2011 34
35. Cost Effectiveness
• Every owner wants a cost-effective building. But
what does this mean?
• Is it the lowest first-cost structure that meets the
program?
• Is it the design with the lowest operating and
maintenance costs?
• Is it the building with the longest life span?
• Is it the facility in which users are
most productive?
• Is it the building that offers the greatest return on
investment?
©Kingport DBA Resource Productivity Associates, 2011 35
36. Costs and benefits of alternative decisions?
Process is in three steps in large scale projects:
1. Utilize cost management in planning, design
development Process
2. Use Economic Analysis to evaluate design
alternatives which tool(s) depends on objective:
simple payback to life cycle cost analysis
3. Integrate non-monetary benefits such as
aesthetics, security, safety or historic preservation
©Kingport DBA Resource Productivity Associates, 2011 36
37. Assess RISK!
Performance risk a huge
component of any decision
Address RISK OF
FAILURE UP FRONT
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39. Dealing with Skepticism
• MYTH: Buildings need
to use all that energy.
Energy reduction
would require big
sacrifices.
• FACT: On average,
office buildings waste
30% of the energy they
use, and simple
changes can save a lot!
©Kingport DBA Resource Productivity Associates, 2011 39
40. Dealing with Objection
• MYTH: We don’t have the time or
money to focus on energy
efficiency right now.
FACT: Saving energy might be
the easiest way we can help our
workplace reduce operating
costs—and improve the bottom
line. Companies and
organizations that are leaders in
energy efficiency use about 30
percent less energy than their
competitors. No wonder nearly
one-third of Fortune 500
companies have made a
commitment to energy efficiency
by becoming ENERGY STAR®
partners! ENERGY STAR labeled
office buildings cost, on average,
$0.54 less per square foot to
operate than similar buildings
http://www.businessinsider.com
©Kingport DBA Resource Productivity Associates, 2011 40
41. Who Participates in
ENERGY STAR Building & Plants?
• 6,200 buildings
earned the Star in
2008 and 9,000 in
2009, 50% jump!
• 75% of the
consumers were
aware of the ENERGY
STAR brand
©Kingport DBA Resource Productivity Associates, 2011 41
42. 2009 Staggering Growth!
• Energy performance of 120,000 buildings
with 14 billion square feet have been
measured.
• 5,000 organizations have joined the
Buildings Program as partners.
• 9,000 buildings earned the ENERGY STAR in
all 50 states.
©Kingport DBA Resource Productivity Associates, 2011 42
43. How Do I Assess Building
Energy Performance?
• How do you know how efficiently a building is
operating?
• What is Energy Performance?
• How do you compare buildings?
– ENERGY STAR benchmarking
– Whole building assessment
– Energy management
©Kingport DBA Resource Productivity Associates, 2011 43
44. How To Start An
Energy Management Plan?
• Compare against other buildings
• Track energy savings over time
• Monitor energy efficiency projects
• Good business practice!
Easy and simple!
©Kingport DBA Resource Productivity Associates, 2011 44
45. ENERGY STAR® - The “Whole Building”
• Assessing a Building Energy Performance
– ENERGY STAR benchmarking
– Establishing a baseline is easy as pie!
– Staged approach is cost-effective methodology
and allows you to see the interaction between
Building Systems
Compared to National Average
©Kingport DBA Resource Productivity Associates, 2011 45
46. What is Energy Performance?
• Energy: Gas, Electricity, Oil, • Building and Operating
Nuclear, Coal Characteristics
Converted into Common Unit Of Measurement: • Square Footage
British Thermal Units • Weather
• 1 kWh electricity = 3.412 kBtu • Occupancy
• 1Therm of Natural Gas = 100 kBtu • Plug Load
• 1 gallon fuel oil = 138.69 kBtu
Building Building
A B
Model Portfolio
Manager
kBTU/Square Footage = Energy Use Intensity
©Kingport DBA Resource Productivity Associates, 2011 46
47. Four Pillars of a Building:
The Systems
• Lighting
• Plug Load
• HVAC
• Building Envelope
• Their interactions – why it matters
“whole building” performance leads to higher
energy efficiency or “energy performance”
©Kingport DBA Resource Productivity Associates, 2011 47
51. Prioritizing Projects
1. Use ENERGY STAR Staged Approach
2. Estimate energy savings and financial
value of:
– Single measure project:
• Use energy calculators
– ENERGY STAR, FEMP or other third party
– Manufacturers with caution
– Large scale retrofit:
• Economic and energy modeling
©Kingport DBA Resource Productivity Associates, 2011 51
52. Rating and Narrow Down Projects
With First Screening Process
Once an energy performance baseline rating is established, the next steps are
to set improvement goals. The ENERGY STAR guide below helps you interpret
the ratings and determine appropriate next steps.
MAINTAIN
ADJUST These top performing facilities
offer examples of best practices
Facilities in this range may reap as well as opportunities to gain
INVEST significant savings from recognition. Continue to improve
concentration on simple, low-cost and maintain superior
Facilities in this range offer the greatest measures, such as improved performance by focusing on
opportunity for financial and environmental operations and maintenance operations and maintenance.
improvement. Investing in new equipment and practices. Equipment upgrades
enhancing operational practices may have the could yield additional savings.
greatest impact on your bottom line.
1 50 75 100
ENERGY PERFORMANCE RATING
©Kingport DBA Resource Productivity Associates, 2011 52
54. How do I Prioritize Projects?
Behavior
7-28.1%
3.5- 15.2%
O&M
Lighting
9.4 - 25%
Controls Equipment
7.3 – 22.9% 3.5 – 15.9%
©Kingport DBA Resource Productivity Associates, 2011 54
55. The Critical Component
• Financial crisis continues
• Energy Efficiency Project Financing is available
for projects that meet
– Credit standards
– With reduced or mitigated Performance risks
– Produce strong stream of CASH FLOW DURING
THE LIFE OF THE FINANCING OR LONGER
©Kingport DBA Resource Productivity Associates, 2011 55
56. Where is The Money, Honey?
• We have no budget!
• How do I finance 100% of the projects?
Get money from Wall Street?
WRONG! Think again!
Cash Flow Grows from Energy Efficiency Not On Trees!
©Kingport DBA Resource Productivity Associates, 2011 56
57. Cash Flow is King! Why?
Businesses and governments cannot exist without
cash flow
Money has to grow to allow to pay for goods and services
©Kingport DBA Resource Productivity Associates, 2011 57
59. Net Present Value Analysis
• .
All payments are added and
brought back to today’s dollars
©Kingport DBA Resource Productivity Associates, 2011 59
60. Sources of Financing
• Internally Generated Cash Flow
– Higher rental income
– Lower utility bills and related labor
– Use the Staged Approach Strategy
• Utilities Incentives and Rebates
• Leasing: the new frontier in Energy Efficiency Financing!
• Federal / State Tax and Other Incentives
• Insurance premium discounts
©Kingport DBA Resource Productivity Associates, 2011 60
61. Cash Financed Projects
1. Benchmark
2. Maximize Operations & Maintenance Savings
3. Identify and sequence LOW cost improvements
7 to 28 % on energy bills
helps pay for measures!
©Kingport DBA Resource Productivity Associates, 2011 61
63. Operating Budget vs.
Capital Budgeting
• What if no leasing policy?
• Use your operating budget to fund projects.
– Easier to get approved. Can achieve budget
neutrality if energy savings equals or exceed
monthly debt service
©Kingport DBA Resource Productivity Associates, 2011 63
64. 25%
9.4%
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65. Leases
• Types:
1 . Operating Leases = rent equipment
2 . Capital Leases – own for $1 buyout
• 100% of equipment costs, hardware, software and
installation
• Term: up to 10 years, normally
• Every industry - private and public finance
©Kingport DBA Resource Productivity Associates, 2011 65
66. Leasing - Benefits
• Reduces first cost hurdles
• Common vehicle in financing projects
• Quick turnaround time
• Flexible Payment schedule: match business
cash flow
©Kingport DBA Resource Productivity Associates, 2011 66
67. Utility Incentive Programs
• Utility Financing program
• Savings by Design
• Rebates & Incentives
• Demand Response
2010-2012 Energy Efficiency Portfolio
approved by the California Public
Utilities Commission (CPUC)
©Kingport DBA Resource Productivity Associates, 2011 67
68. Utility Rebates vs. Incentives
Incentives
• up to 50 % of project cost including labor
• takes longer due to Measurement & Verification
• pre-inspection
• larger lighting projects
Rebates
• quick & simple
• submit invoice
• ideal for small projects
©Kingport DBA Resource Productivity Associates, 2011 68
69. Permanent Load Shifting
“Shift & Save”- store thermal cooling capacity during
off-peak hours and/or partial-peak hours in order to
meet thermal cooling load in subsequent on-peak
hours.
©Kingport DBA Resource Productivity Associates, 2011 69
70. San Diego Gas & Electric
On Bill Financing
• 0% interest loan
● Loan = total project cost – incentive/rebate
● Monthly payments based upon
energy costs savings.
● Payments are made on the
utility bills.
©Kingport DBA Resource Productivity Associates, 2011 70
71. SDG&E On-Bill Financing
• Business Customers :
- Loan from $5,000 to $100,000 per meter
- Max five year term.
• Government & tax-funded agencies:
- Loan from $5,000 to $ 250,000 per meter
- Max ten year term
©Kingport DBA Resource Productivity Associates, 2011 71
73. SDG&E – Radisson
Rancho Bernardo Case Study
Replace 153 guest
room PTAC’s and
switch to T-8’s
©Kingport DBA Resource Productivity Associates, 2011 73
80. Energy Savings Estimates
Continued
This cost calculator is a screening tool that estimates a product's lifetime energy cost savings at various efficiency
levels. Maintenance and installation costs do not vary significantly among the same product having different
efficiencies; so, these costs are not included in this calculator tool. See For a detailed life-cycle cost analysis,
FEMP has developed a tool called Building Life-Cycle Cost (BLCC). This downloadable tool allows the user to vary
interest rates, installation costs, maintenance costs, salvage values, and life expectancy for a product or an
entire energy project.
©Kingport DBA Resource Productivity Associates, 2011 80
81. FEMP Life Cycle Cost Tool
for Large System
©Kingport DBA Resource Productivity Associates, 2011 81
82. FEMP Life Cycle Cost Tool
for Large System
©Kingport DBA Resource Productivity Associates, 2011 82
83. FEMP Life Cycle Cost Tool
for Large System
©Kingport DBA Resource Productivity Associates, 2011 83
84. FEMP Life Cycle Cost Tool
for Large System
©Kingport DBA Resource Productivity Associates, 2011 84
86. Project Financing Checklist
Check for savings from Operations and Maintenance
procedures?
Is the project eligible for utility?
Rebate,
Incentive,
Demand Response,
Savings by Design?
Is utility financing available?
Is energy efficiency financing available from the State?
©Kingport DBA Resource Productivity Associates, 2011 86
87. Project Financing Checklist (Cont’d)
Is project eligible for EPACT 2005 tax deductions?
Has project sponsor applied for grants or loans?
How much of the project can be financed with a
lease?
How much up front cash is required after all of the
above sources are used?
©Kingport DBA Resource Productivity Associates, 2011 87
90. Letter Attachment to
Building Upgrade Value Calculator
Therefore, we recommend and request approval for these energy efficiency measures to improve
Mark Twain House & Museum ’s overall performance. We look forward to speaking with you.
Sincerely,
Daryl DeJean
Emerging Technologies Associates Inc.
©Kingport DBA Resource Productivity Associates, 2011 90
92. Locate Financial Calculator on ENERGY STAR
Financial Value Calculator
Scroll down to the bottom of the page
92
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94. Step 1 - Input Data
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95. Step 2 - Choose Savings Level
©Kingport DBA Resource Productivity Associates, 2011 95
96. Step 3 - Estimate Cash Flow
©Kingport DBA Resource Productivity Associates, 2011 96
97. Step 4 - View Potential Returns
Run what if’s
©Kingport DBA Resource Productivity Associates, 2011 97
98. Compare Today and Tomorrow Dollars!
Tomorrow’s $:
Today’s $: $111,601 ©Kingport DBA Resource Productivity Associates, 2011 98
99. Building for Environmental and
Economic Sustainability(BEES)
Resource Productivity Associates
is a member of ASTM committee
developing worldwide standard
©Kingport DBA Resource Productivity Associates, 2011 99
100. A Critical Piece of The Puzzle
CASH FLOW
http://www.jmorganmarketing.com
©Kingport DBA Resource Productivity Associates, 2011 100
102. The Value of ENERGY STAR
©Kingport DBA Resource Productivity Associates, 2011 102
103. Reduce Consumption
Reduce Operating Expenses
7% 6.47%
6% 5.66%
4.85%
N 5%
4.04%
O
4%
I 3.24%
3% 2.43%
2% 1.62%
0.81%
1%
0.00%
0%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Energy Consumption
©Kingport DBA Resource Productivity Associates, 2011 103
104. THE BUSINESS CASE:
WHY THIS IS WORTH YOUR TIME
• Managing energy use is good business
– strengthens the bottom line and
– positions your company as an
environmental leader
• By improving financial performance and
embracing corporate social responsibility,
superior energy practices can give you a critical
competitive edge.
©Kingport DBA Resource Productivity Associates, 2011 104
106. Look Out from the Microscope
©Kingport DBA Resource Productivity Associates, 2011 106
107. Checklist
Determine the “real” goal
Tie to corporate goals and profitability
Understand the corporate financial requirements
Educate and engage management using ENERGY
STAR
Documented impact on profitability
©Kingport DBA Resource Productivity Associates, 2011 107
108. Checklist (cont’d)
Create a strategy and TEAM
Determine savings using third party tools
ENERGY STAR
FEMP
Analyze any associated risk
Life cycle analysis and impact on profits
©Kingport DBA Resource Productivity Associates, 2011 108
109. Checklist (cont’d)
Consider options on how to finance projects
Self using savings – operating budget
Utility programs
Lease
Use ENERGY STAR Financial Value Calculator to
generate letter
Create 5 – 7 slide presentation if required
©Kingport DBA Resource Productivity Associates, 2011 109