How To Justify Energy Efficiency Projects To Upper Management

OTHER PARTS OF THIS ARTICLEPt. 1: Demand Response: No Cost Way To Reduce Energy BillsPt. 2: Perform an Energy Audit As a First Step To SavingsPt. 3: Overlooked Opportunities Provide Big Energy SavingsPt. 4: The Next Big Thing In Energy EfficiencyPt. 5: This Page

How can facility managers more effectively sell the financial justifications of the projects they want to do?
CEOs and CFOs do not care about the nuts and bolts of an energy improvement, only its financial performance. The energy savings projects have to compete for operating or capital dollars. Many companies have been doing more with less, so wasting money and time is not an option. Your reputation is associated with the project, so the numbers have to be right.

The best approach is to use ultra conservative savings forecasts and provide measurement & verification (M&V) of the actual results. The M&V needs to be planned based on how you are going to measure the results.  If your project actual performance is 150 percent of the projected performance, then your changes of getting approval of the next energy efficiency project has improved. No one wants to tell the CEO that the project only produced 50 percent of the projected savings or, worse yet, you cannot prove the actual savings based on the utility bills. Successful energy management is a patient and long-term game.
Responses provided by Richard Lubinski, president, Think Energy Management LLC.

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  posted on 4/2/2012   Article Use Policy

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