Today’s Presentation ADDRESSES ONE OF THE BIGGEST  CHALLENGES FACING ENERGY     EFFICIENCY PROJECTS             ©Kingport ...
Who We Are?A strategic consulting firm that provides results-focused strategicplanning and implementation to maximize reso...
So you want to know……                                        How to Sell Energy                                        Eff...
Copyright and PermissionsCopyright in all content on this site is owned by EmergingTechnologies Associates, Inc. and Kingp...
Today Starts the Journey!     ©Kingport DBA Resource Productivity Associates, 2011   5
©Kingport DBA Resource Productivity Associates, 2011   6
©Kingport DBA Resource Productivity Associates, 2011   7
First Let’s……..©Kingport DBA Resource Productivity Associates, 2011   8
How Do We Bridge The Gap?      ©Kingport DBA Resource Productivity Associates, 2011   9
Points to Ponder• What is the “real” goal of the project?              ©Kingport DBA Resource Productivity Associates, 201...
Besides……..©Kingport DBA Resource Productivity Associates, 2011   11
It’s Really About……….            http://www.sdkcm.org   ©Kingport DBA Resource Productivity Associates, 2011   12
Leading To……©Kingport DBA Resource Productivity Associates, 2011   13
How are Sustainability andEnergy Efficiency Connected?                                  Sustainable energy                ...
Typically, the death of aproject is based upon…..      ©Kingport DBA Resource Productivity Associates, 2011   15
http://www.edi-nc.com/edi/news/Energyefficiency.asp      ©Kingport DBA Resource Productivity Associates, 2011   16
It Takes MONEY!http://blog.broadcastengineering.com©Kingport DBA Resource Productivity Associates, 2011   17
Therefore…….    http://happyhypnosis.net©Kingport DBA Resource Productivity Associates, 2011   18
What is the Investment Worth?              http://www.rms.net       ©Kingport DBA Resource Productivity Associates, 2011  ...
http://www.meetingarchitecture.com©Kingport DBA Resource Productivity Associates, 2011               20
Executives Look For………               http://rethinkhr.org    ©Kingport DBA Resource Productivity Associates, 2011   21
©Kingport DBA Resource Productivity Associates, 2011   22
How do I effectively “sell” and makecredible presentations of projects to theFinance Team and Senior Management?          ...
ENERGY STAR®Provides the Foundation    ©Kingport DBA Resource Productivity Associates, 2011   24
http://www.automatedbuildings.com©Kingport DBA Resource Productivity Associates, 2011   25
To Create….©Kingport DBA Resource Productivity Associates, 2011   26
©Kingport DBA Resource Productivity Associates, 2011   27
Financial Justification of Projects– According to US EPA, “30% of energy bills is used  to pay for energy waste” in the ty...
http://www.millennialliving.com©Kingport DBA Resource Productivity Associates, 2011   29
Utilities: Largest Controllable       Operating Expense                                        Growing Impact on Cash Flow...
Leading The Team      http://askmarklittle.com/ ©Kingport DBA Resource Productivity Associates, 2011   31
Create the Culture ©Kingport DBA Resource Productivity Associates, 2011   32
http://www.masternewmedia.org©Kingport DBA Resource Productivity Associates, 2011   33
Decision-Making Process             In Whole Building Design• Define project goals:   –    energy                - histori...
Cost Effectiveness• Every owner wants a cost-effective building. But  what does this mean?• Is it the lowest first-cost st...
Costs and benefits of alternative decisions?Process is in three steps in large scale projects:  1. Utilize cost management...
Assess RISK!                                 Performance risk a huge                                 component of any deci...
Credibility©Kingport DBA Resource Productivity Associates, 2011   38
Dealing with Skepticism• MYTH: Buildings need  to use all that energy.  Energy reduction  would require big  sacrifices.• ...
Dealing with Objection•   MYTH: We don’t have the time or    money to focus on energy    efficiency right now.    FACT: Sa...
Who Participates in ENERGY STAR Building & Plants?• 6,200 buildings  earned the Star in  2008 and 9,000 in  2009, 50% jump...
2009 Staggering Growth!• Energy performance of 120,000 buildings  with 14 billion square feet have been  measured.• 5,000 ...
How Do I Assess Building       Energy Performance?• How do you know how efficiently a building is  operating?• What is Ene...
How To Start An   Energy Management Plan?• Compare against other buildings• Track energy savings over time• Monitor energy...
ENERGY STAR® - The “Whole Building”• Assessing a Building Energy Performance  – ENERGY STAR benchmarking  – Establishing a...
What is Energy Performance?• Energy: Gas, Electricity, Oil,                                      • Building and Operating ...
Four Pillars of a Building:                  The Systems•   Lighting•   Plug Load•   HVAC•   Building Envelope•   Their in...
Accessing ENERGY STAR  ©Kingport DBA Resource Productivity Associates, 2011   48
The Typical Office©Kingport DBA Resource Productivity Associates, 2011   49
The Typical Plant©Kingport DBA Resource Productivity Associates, 2011   50
Prioritizing Projects1. Use ENERGY STAR Staged Approach2. Estimate energy savings and financial  value of:  – Single measu...
Rating and Narrow Down Projects        With First Screening ProcessOnce an energy performance baseline rating is establish...
©Kingport DBA Resource Productivity Associates, 2011   53
How do I Prioritize Projects?                                                          Behavior       7-28.1%             ...
The Critical Component• Financial crisis continues• Energy Efficiency Project Financing is available  for projects that me...
Where is The Money, Honey?• We have no budget!• How do I finance 100% of the projects?                                    ...
Cash Flow is King! Why?      Businesses and governments cannot exist without      cash flowMoney has to grow to allow to p...
Today’s Dollar isBetter than Tomorrow! Why?    ©Kingport DBA Resource Productivity Associates, 2011   58
Net Present Value Analysis• .                                                           All payments are added and        ...
Sources of Financing• Internally Generated Cash Flow   – Higher rental income   – Lower utility bills and related labor   ...
Cash Financed Projects1. Benchmark2. Maximize Operations & Maintenance Savings3. Identify and sequence LOW cost improvemen...
ENERGY STAR METHODOLOGYIdentify and sequence LOW cost         improvements      ©Kingport DBA Resource Productivity Associ...
Operating Budget vs.              Capital Budgeting• What if no leasing policy?• Use your operating budget to fund project...
25%9.4%   ©Kingport DBA Resource Productivity Associates, 2011   64
Leases• Types:  1 . Operating Leases = rent equipment  2 . Capital Leases – own for $1 buyout• 100% of equipment costs, ha...
Leasing - Benefits•   Reduces first cost hurdles•   Common vehicle in financing projects•   Quick turnaround time•   Flexi...
Utility Incentive Programs•   Utility Financing program•   Savings by Design•   Rebates & Incentives•   Demand Response201...
Utility Rebates vs. IncentivesIncentives  • up to 50 % of project cost including labor  • takes longer due to Measurement ...
Permanent Load Shifting“Shift & Save”- store thermal cooling capacity during  off-peak hours and/or partial-peak hours in ...
San Diego Gas & Electric            On Bill Financing• 0% interest loan● Loan = total project cost – incentive/rebate● Mon...
SDG&E On-Bill Financing• Business Customers :   - Loan from $5,000 to $100,000 per meter   - Max five year term.• Governme...
On Bill Financing©Kingport DBA Resource Productivity Associates, 2011   72
SDG&E – RadissonRancho Bernardo Case Study                  Replace 153 guest                  room PTAC’s and            ...
Energy Savings EstimatesVending Machine Energy Savings Calculator               ©Kingport DBA Resource Productivity Associ...
Energy Savings Estimates      ©Kingport DBA Resource Productivity Associates, 2011   75
Energy Savings EstimatesTransparent Assumptions                                                       Assumptions are     ...
FEMP Single Measure Calculator     ©Kingport DBA Resource Productivity Associates, 2011   77
Energy Savings Estimates       ©Kingport DBA Resource Productivity Associates, 2011   78
Energy Savings Estimates           Continued        ©Kingport DBA Resource Productivity Associates, 2011   79
Energy Savings Estimates                                             ContinuedThis cost calculator is a screening tool tha...
FEMP Life Cycle Cost Tool   for Large System      ©Kingport DBA Resource Productivity Associates, 2011   81
FEMP Life Cycle Cost Tool   for Large System  ©Kingport DBA Resource Productivity Associates, 2011   82
FEMP Life Cycle Cost Tool   for Large System  ©Kingport DBA Resource Productivity Associates, 2011   83
FEMP Life Cycle Cost Tool   for Large System       ©Kingport DBA Resource Productivity Associates, 2011   84
DOE Endorsed SingleMeasure Calculator©Kingport DBA Resource Productivity Associates, 2011   85
Project Financing Checklist Check for savings from Operations and Maintenance  procedures? Is the project eligible for u...
Project Financing Checklist (Cont’d) Is project eligible for EPACT 2005 tax deductions? Has project sponsor applied for ...
http://www.iamaceo.com©Kingport DBA Resource Productivity Associates, 2011   88
Letter Attachment toBuilding Upgrade Value Calculator       ©Kingport DBA Resource Productivity Associates, 2011   89
Letter Attachment toBuilding Upgrade Value CalculatorTherefore, we recommend and request approval for these energy efficie...
Locate Calculator on ENERGY STAR©Kingport DBA Resource Productivity Associates, 2011   91
Locate Financial Calculator on ENERGY STAR                                          Financial Value Calculator            ...
©Kingport DBA Resource Productivity Associates, 2011   93
Step 1 - Input Data ©Kingport DBA Resource Productivity Associates, 2011   94
Step 2 - Choose Savings Level      ©Kingport DBA Resource Productivity Associates, 2011   95
Step 3 - Estimate Cash Flow      ©Kingport DBA Resource Productivity Associates, 2011   96
Step 4 - View Potential Returns               Run what if’s       ©Kingport DBA Resource Productivity Associates, 2011   97
Compare Today and Tomorrow Dollars!                                                               Tomorrow’s $:Today’s $: ...
Building for Environmental andEconomic Sustainability(BEES)                                               Resource Product...
A Critical Piece of The Puzzle                       CASH FLOW       http://www.jmorganmarketing.com       ©Kingport DBA R...
Create Cash Flow ©Kingport DBA Resource Productivity Associates, 2011   101
The Value of ENERGY STAR     ©Kingport DBA Resource Productivity Associates, 2011   102
Reduce Consumption            Reduce Operating Expenses  7%                                                               ...
THE BUSINESS CASE:      WHY THIS IS WORTH YOUR TIME• Managing energy use is good business  – strengthens the bottom line a...
©Kingport DBA Resource Productivity Associates, 2011   105
Look Out from the Microscope       ©Kingport DBA Resource Productivity Associates, 2011   106
ChecklistDetermine the “real” goal  Tie to corporate goals and profitabilityUnderstand the corporate financial requirem...
Checklist (cont’d)Create a strategy and TEAMDetermine savings using third party tools  ENERGY STAR  FEMPAnalyze any a...
Checklist (cont’d)Consider options on how to finance projects  Self using savings – operating budget  Utility programs ...
Mission Accomplished?   ©Kingport DBA Resource Productivity Associates, 2011   110
Thank You!Daryl DeJean          daryldejean@gmail.com        ©Kingport DBA Resource Productivity Associates, 2011   111
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How to Sell Energy Efficiency Products

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This seminar focuses on using a nationally recognized third-party tool and resources to "validate" energy efficiency projects and successfully get projects funded. The focus will be the demonstration of how to use this unbiased tool to illustrate to clients the financial impact and benefits of your energy efficiency projects.

Topics include -

executive level financial considerations

the role of benchmarking in getting project funding
incentives as enabler
high impact, proven financial lingo to get funding
effectively presenting projects for funding


Learning Objectives

1. Tools and resources to support energy efficient project funding

2. Benchmarking and project funding

3. Impact of incentives on overall project funding

4. The lingo of finance executives

5. High impact presentation of projects

6. The value of energy efficiency projects to the organization

Published in: Technology, Business
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How to Sell Energy Efficiency Products

  1. 1. Today’s Presentation ADDRESSES ONE OF THE BIGGEST CHALLENGES FACING ENERGY EFFICIENCY PROJECTS ©Kingport DBA Resource Productivity Associates, 2011 1
  2. 2. Who We Are?A strategic consulting firm that provides results-focused strategicplanning and implementation to maximize resource productivityto meet sustainability goals of our clients.We have provided seminars and speeches to over 1,000 busybusinesspeople—from management level to CEO—on how toincrease resource productivity in their companies.We help companies develop a comprehensive strategy toresource productivity in their organizations to building a moresustainable financial future, serving as their resourceproductivity coach to meet their objectives. ©Kingport DBA Resource Productivity Associates, 2011 2
  3. 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. 4. Copyright and PermissionsCopyright in all content on this site is owned by EmergingTechnologies Associates, Inc. and Kingport DBA ResourceProductivity Associates. No materials from this presentationmay be reproduced, stored, altered or further distributedwithout our prior written permission. Requests for permissionshould be sent in writing to our headquarters office at theaddress below. Kingport DBA Resource Productivity Associates P.O. Box 5475 Santa Barbara, CA. 93150 ©Kingport DBA Resource Productivity Associates, 2011 4
  5. 5. Today Starts the Journey! ©Kingport DBA Resource Productivity Associates, 2011 5
  6. 6. ©Kingport DBA Resource Productivity Associates, 2011 6
  7. 7. ©Kingport DBA Resource Productivity Associates, 2011 7
  8. 8. First Let’s……..©Kingport DBA Resource Productivity Associates, 2011 8
  9. 9. How Do We Bridge The Gap? ©Kingport DBA Resource Productivity Associates, 2011 9
  10. 10. Points to Ponder• What is the “real” goal of the project? ©Kingport DBA Resource Productivity Associates, 2011 10
  11. 11. Besides……..©Kingport DBA Resource Productivity Associates, 2011 11
  12. 12. It’s Really About………. http://www.sdkcm.org ©Kingport DBA Resource Productivity Associates, 2011 12
  13. 13. Leading To……©Kingport DBA Resource Productivity Associates, 2011 13
  14. 14. How are Sustainability andEnergy 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. 15. Typically, the death of aproject is based upon….. ©Kingport DBA Resource Productivity Associates, 2011 15
  16. 16. http://www.edi-nc.com/edi/news/Energyefficiency.asp ©Kingport DBA Resource Productivity Associates, 2011 16
  17. 17. It Takes MONEY!http://blog.broadcastengineering.com©Kingport DBA Resource Productivity Associates, 2011 17
  18. 18. Therefore……. http://happyhypnosis.net©Kingport DBA Resource Productivity Associates, 2011 18
  19. 19. What is the Investment Worth? http://www.rms.net ©Kingport DBA Resource Productivity Associates, 2011 19
  20. 20. http://www.meetingarchitecture.com©Kingport DBA Resource Productivity Associates, 2011 20
  21. 21. Executives Look For……… http://rethinkhr.org ©Kingport DBA Resource Productivity Associates, 2011 21
  22. 22. ©Kingport DBA Resource Productivity Associates, 2011 22
  23. 23. How do I effectively “sell” and makecredible presentations of projects to theFinance Team and Senior Management? ©Kingport DBA Resource Productivity Associates, 2011 23
  24. 24. ENERGY STAR®Provides the Foundation ©Kingport DBA Resource Productivity Associates, 2011 24
  25. 25. http://www.automatedbuildings.com©Kingport DBA Resource Productivity Associates, 2011 25
  26. 26. To Create….©Kingport DBA Resource Productivity Associates, 2011 26
  27. 27. ©Kingport DBA Resource Productivity Associates, 2011 27
  28. 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
  29. 29. http://www.millennialliving.com©Kingport DBA Resource Productivity Associates, 2011 29
  30. 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. 31. Leading The Team http://askmarklittle.com/ ©Kingport DBA Resource Productivity Associates, 2011 31
  32. 32. Create the Culture ©Kingport DBA Resource Productivity Associates, 2011 32
  33. 33. http://www.masternewmedia.org©Kingport DBA Resource Productivity Associates, 2011 33
  34. 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. 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. 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. 37. Assess RISK! Performance risk a huge component of any decision Address RISK OF FAILURE UP FRONT©Kingport DBA Resource Productivity Associates, 2011 37
  38. 38. Credibility©Kingport DBA Resource Productivity Associates, 2011 38
  39. 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. 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. 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. 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. 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. 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. 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. 46. What is Energy Performance?• Energy: Gas, Electricity, Oil, • Building and Operating Nuclear, Coal CharacteristicsConverted 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. 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
  48. 48. Accessing ENERGY STAR ©Kingport DBA Resource Productivity Associates, 2011 48
  49. 49. The Typical Office©Kingport DBA Resource Productivity Associates, 2011 49
  50. 50. The Typical Plant©Kingport DBA Resource Productivity Associates, 2011 50
  51. 51. Prioritizing Projects1. Use ENERGY STAR Staged Approach2. 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. 52. Rating and Narrow Down Projects With First Screening ProcessOnce an energy performance baseline rating is established, the next steps areto set improvement goals. The ENERGY STAR guide below helps you interpretthe 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
  53. 53. ©Kingport DBA Resource Productivity Associates, 2011 53
  54. 54. How do I Prioritize Projects? Behavior 7-28.1% 3.5- 15.2% O&M Lighting 9.4 - 25%Controls Equipment7.3 – 22.9% 3.5 – 15.9% ©Kingport DBA Resource Productivity Associates, 2011 54
  55. 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. 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. 57. Cash Flow is King! Why? Businesses and governments cannot exist without cash flowMoney has to grow to allow to pay for goods and services ©Kingport DBA Resource Productivity Associates, 2011 57
  58. 58. Today’s Dollar isBetter than Tomorrow! Why? ©Kingport DBA Resource Productivity Associates, 2011 58
  59. 59. Net Present Value Analysis• . All payments are added and brought back to today’s dollars ©Kingport DBA Resource Productivity Associates, 2011 59
  60. 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. 61. Cash Financed Projects1. Benchmark2. Maximize Operations & Maintenance Savings3. Identify and sequence LOW cost improvements 7 to 28 % on energy bills helps pay for measures! ©Kingport DBA Resource Productivity Associates, 2011 61
  62. 62. ENERGY STAR METHODOLOGYIdentify and sequence LOW cost improvements ©Kingport DBA Resource Productivity Associates, 2011 62
  63. 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. 64. 25%9.4% ©Kingport DBA Resource Productivity Associates, 2011 64
  65. 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. 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. 67. Utility Incentive Programs• Utility Financing program• Savings by Design• Rebates & Incentives• Demand Response2010-2012 Energy Efficiency Portfolio approved by the California Public Utilities Commission (CPUC) ©Kingport DBA Resource Productivity Associates, 2011 67
  68. 68. Utility Rebates vs. IncentivesIncentives • up to 50 % of project cost including labor • takes longer due to Measurement & Verification • pre-inspection • larger lighting projectsRebates • quick & simple • submit invoice • ideal for small projects ©Kingport DBA Resource Productivity Associates, 2011 68
  69. 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. 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. 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
  72. 72. On Bill Financing©Kingport DBA Resource Productivity Associates, 2011 72
  73. 73. SDG&E – RadissonRancho Bernardo Case Study Replace 153 guest room PTAC’s and switch to T-8’s ©Kingport DBA Resource Productivity Associates, 2011 73
  74. 74. Energy Savings EstimatesVending Machine Energy Savings Calculator ©Kingport DBA Resource Productivity Associates, 2011 74
  75. 75. Energy Savings Estimates ©Kingport DBA Resource Productivity Associates, 2011 75
  76. 76. Energy Savings EstimatesTransparent Assumptions Assumptions are crucial in your Management presentation ©Kingport DBA Resource Productivity Associates, 2011 76
  77. 77. FEMP Single Measure Calculator ©Kingport DBA Resource Productivity Associates, 2011 77
  78. 78. Energy Savings Estimates ©Kingport DBA Resource Productivity Associates, 2011 78
  79. 79. Energy Savings Estimates Continued ©Kingport DBA Resource Productivity Associates, 2011 79
  80. 80. Energy Savings Estimates ContinuedThis cost calculator is a screening tool that estimates a products 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. 81. FEMP Life Cycle Cost Tool for Large System ©Kingport DBA Resource Productivity Associates, 2011 81
  82. 82. FEMP Life Cycle Cost Tool for Large System ©Kingport DBA Resource Productivity Associates, 2011 82
  83. 83. FEMP Life Cycle Cost Tool for Large System ©Kingport DBA Resource Productivity Associates, 2011 83
  84. 84. FEMP Life Cycle Cost Tool for Large System ©Kingport DBA Resource Productivity Associates, 2011 84
  85. 85. DOE Endorsed SingleMeasure Calculator©Kingport DBA Resource Productivity Associates, 2011 85
  86. 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. 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
  88. 88. http://www.iamaceo.com©Kingport DBA Resource Productivity Associates, 2011 88
  89. 89. Letter Attachment toBuilding Upgrade Value Calculator ©Kingport DBA Resource Productivity Associates, 2011 89
  90. 90. Letter Attachment toBuilding Upgrade Value CalculatorTherefore, we recommend and request approval for these energy efficiency measures to improveMark Twain House & Museum ’s overall performance. We look forward to speaking with you.Sincerely,Daryl DeJeanEmerging Technologies Associates Inc. ©Kingport DBA Resource Productivity Associates, 2011 90
  91. 91. Locate Calculator on ENERGY STAR©Kingport DBA Resource Productivity Associates, 2011 91
  92. 92. Locate Financial Calculator on ENERGY STAR Financial Value Calculator Scroll down to the bottom of the page 92 ©Kingport DBA Resource Productivity Associates, 2011 92
  93. 93. ©Kingport DBA Resource Productivity Associates, 2011 93
  94. 94. Step 1 - Input Data ©Kingport DBA Resource Productivity Associates, 2011 94
  95. 95. Step 2 - Choose Savings Level ©Kingport DBA Resource Productivity Associates, 2011 95
  96. 96. Step 3 - Estimate Cash Flow ©Kingport DBA Resource Productivity Associates, 2011 96
  97. 97. Step 4 - View Potential Returns Run what if’s ©Kingport DBA Resource Productivity Associates, 2011 97
  98. 98. Compare Today and Tomorrow Dollars! Tomorrow’s $:Today’s $: $111,601 ©Kingport DBA Resource Productivity Associates, 2011 98
  99. 99. Building for Environmental andEconomic Sustainability(BEES) Resource Productivity Associates is a member of ASTM committee developing worldwide standard ©Kingport DBA Resource Productivity Associates, 2011 99
  100. 100. A Critical Piece of The Puzzle CASH FLOW http://www.jmorganmarketing.com ©Kingport DBA Resource Productivity Associates, 2011 100
  101. 101. Create Cash Flow ©Kingport DBA Resource Productivity Associates, 2011 101
  102. 102. The Value of ENERGY STAR ©Kingport DBA Resource Productivity Associates, 2011 102
  103. 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. 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
  105. 105. ©Kingport DBA Resource Productivity Associates, 2011 105
  106. 106. Look Out from the Microscope ©Kingport DBA Resource Productivity Associates, 2011 106
  107. 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. 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. 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
  110. 110. Mission Accomplished? ©Kingport DBA Resource Productivity Associates, 2011 110
  111. 111. Thank You!Daryl DeJean daryldejean@gmail.com ©Kingport DBA Resource Productivity Associates, 2011 111
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