Building a case for energy efficiency upgrades

When dealing with a commercial business, big or small, we always get the same reply when we talk about energy efficiency upgrades; "We just don't have any money to spend right now because of....." whatever the reason given.

We found out many years ago that NOBODY ever has 'Money to spend', not businesses and not homeowners. HOWEVER, what we learned early on is that those same poor and struggling home owners and businesses always seemed to be able to come up with 'Money to Invest'.

How your initial presentation comes across is everything. Gathering pertinent data is also everything.

Here is an article put out by the EPA on that very subject. We have used this article as a guide to put together proposals to companies. Our residential salespeople have to be quick thinking to add the same type of information in the same way inside a home during a 1-hour presentation..

The author touches on many good points and it is based on a proposal to a hospital. One of our latest bigger projects was to a large egg processing plant and ranch. I used the same article as a guide but had to change things to make it apply to that particular industry and their issues and types of buildings.

Improved employee productivity for them were the actual chicken producing the eggs in the metal chicken houses. The mortality rate at this particular ranch was 100,000 hens a month in the hot months because of excessive heat stress. By the time the hens are old enough to be put in these houses and lay, the company had $5.17 invested in them. They have all that down to a science.

A reduced mortality rate is not the only benefit from cooling the temperature in these chicken houses. If the temperature inside is brought down, you have happier, healthier chickens that are less stressed and that means THEY LAY MORE EGGS and without the additional cost of more food or water! The employees in this case are the chickens. This ranch processes 1.2 million eggs a day. Increase that by just 5 to 10% and you will have their attention.

Do your homework whether it is a commercial or residential customer. Point out EVERY benefit you can possibly point out.

With commercial customers you will oftentimes be dealing with a supervisor, a person in the middle that is not the person that makes the decisions and cuts the checks. He / she might need your help to put together the proposal for the person above them.

That proposal must be worded so that to NOT sign on the dotted line would be a very bad financial decision.

Hope it can help you as well as it has served me.

Hal

Attachments:

BUILDING A CASE.doc, 728 KB

Replies to This Discussion

Permalink Reply by Hal Skinner on July 6, 2011 at 8:56am

The fact that we told them and showed them how we were going to drop their cooling and heating costs in their 200,000 sq ft plant by over 50%, then we did, that certainly helped. We gave them something to feel and see to demonstrate our product and service.

http://www.ct-texas.com

Permalink Reply by Doris Ikle on July 6, 2011 at 9:15am

Hal, you are absolutely right that "a proposal must be worded so that to NOT sign on the dotted line would be a very bad financial decision". For the residential sector, where we are faced with consumers rather than investors, an energy report must show that the customer can either continue paying for wasted energy, or make improvements that cost less than the wasted energy. The data we use is to compare the monthly energy savings (at today's prices) for the group of improvements recommended, with the monthly cost for financing the improvements (including interest charges). By comparing one year's savings to one year's costs rather than comparing one year's savings to the total costs, the relevant comparison becomes evident. As a result, the implementation rate soars from about 20% to 80%.

Permalink Reply by Hal Skinner on July 6, 2011 at 9:29am

Hi Doris.

We always note the fact that a reduced load on the heating and cooling system also extends the life of the AC / heating unit. If we can get the unit load reduced to the point that it will cycle off and on where it does not now, we just extended the life of whatever that unit had left by 100%. We also try and find out how much it would cost to have a newer unit installed and what it would mean to them to put that expense off for 5 years, 10 years, etc.

On residential we try to establish a rough annual dollar amount. We then draw that out to 3 years savings, 5-years and then however many years before they expect to retire. "Could you use an extra 150 grand in 15 years when you retire? Would that amount allow you to retire a year or two earlier?" That one always gets their gears churning.

http://www.ct-texas.com

Permalink Reply by David Eggleton on July 6, 2011 at 12:31pm

Many owners do see their houses as investments (not so easy these days). And it might be possible to convey some of these ideas (entitled Everyone Invests) to others.

Permalink Reply by tedkidd on July 7, 2011 at 10:47am

Nice article Hal.

A question to ask is; "are you making the investment anyway?"

Sometimes, by not investing you are spending money that could be put to more productive use.

Let me ask a question: If your window was open in January, and it cost $1 to close it, would you make the investment? If it cost $100, would you make the investment? If it cost $1000?

This is exactly what I do, I help people understand what windows they can close for $1, $100, and $1000. They decide what to do with the information. If you let me look at your energy history I can get an idea what window you've got open.

Permalink Reply by Barry NewDelman on April 2, 2013 at 2:38pm

I do not know if this still an active discussion, since it goes back to July 2011. However, I think it's important for me to indicate to those who have interests that I totally agree with this or that building owners when asked to improved their energy use the excuse that they did not have the necessary funds to make the necessary improvements, and in most instances that is true

I represent a company that in operates in the deregulated states throughout the country and represents all the alternate retail. Electric suppliers that are licensed in that particular state.

We have been successful in 99% of our negotiations in reducing the cost of energy upwards of 35% at absolutely no cost to you or the property owner. This then allows the property owner to use this annual savings for reinvestment in other capital expenditures for energy updates.

Take a lookat the following two links and if you have an interest in savings your client significant dollars with abolutly NO invesment give me a call. @ 888.859.1480

http://ow.ly/h4yxc

http://ow.ly/jGn0w

Permalink Reply by Bijou Lulla on April 13, 2013 at 12:49am

Has anyone done a case study post installation - on the benefits that were perceived before investment and the actual benefits that materialized post the Energy Efficient retrofit? Will be happy if you share some details with us.

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