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How to Get Buy-In for Your Energy Project

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Are you looking for ways to “sell” your projects to stakeholders? Discover the tax advantages, often-missed energy management benefits, and unique opportunities that can help frame your proposal. This slideshare will give you the answers you need when the questions start coming.

Webinar content includes:

2016 Tax Advantages
Non-Utility Benefits
Real Estate Value Improvement
Reward vs Penalty
Quantifying Energy Savings
Q&A

Published in: Software
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How to Get Buy-In for Your Energy Project

  1. 1. Tips To Sell Your Energy Projects Eric Woodroof, Ph.D. 888-563-7221 ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  2. 2. Eric Woodroof, Ph.D. 400 Energy Audits $150 Million in Savings >25% ROI CEM Instructor Certification Boards (CEM, CRM, PCF) Past President of AEE- 87 Countries Associate Editor: EE Journal Buildings Youngest Member- Energy Managers Hall of Fame ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  3. 3. Our Clients ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  4. 4. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  5. 5. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  6. 6. Promotional Discount Code ECAP 20% off (this week) ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  7. 7. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Selling Energy Projects Agenda 2016 Tax Benefits Non-Utility Benefits Real Estate Value Improvement Reward vs Penalty
  8. 8. TAX Deductions/Rebates 2016 Year Only Case Study Project Cost: 120,000 Utility Rebates: -18,000 Fed Tax Credit: -63,000 310 Tax Deduction: -49,000 NET COST: -10,000 PLUS $27,000 per year Savings ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  9. 9. Value of Tax Benefits ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Normal Cost: 120,000 Savings: 27,000/yr 22% Return/Yr Over 10 Years: You Save $2 for every $1 With Some of the Tax Benefits Cost: 39,000 Savings: 27,000/yr 69% Return/Yr Over 10 Years: You Save $7 for every $1
  10. 10. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Selling Energy Projects Agenda 2016 Tax Benefits Non-Utility Benefits Real Estate Value Improvement Reward vs Penalty
  11. 11. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  12. 12. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com People are like Buildings… “Don’t Over-Eat” Beyond Lower Food Costs: Live Longer Less Medical Bills “Don’t Waste Energy” Beyond Energy $ Savings: Equipment Runs Less (lasts longer) Less Maintenance (Material & Labor) Other Benefits…
  13. 13. Additional Benefits of Energy Conservation Reduced maintenance material costs Reduced maintenance labor costs Permanently avoided capital investment Avoided procurement costs Avoided purchases of carbon offsets Enhanced image, public relations and recognition Reduced sales taxes/environmental penalties Improved building value ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  14. 14. Via Example Application, we calculate: Additional Benefits (most are annual) % Improvement to Energy Savings Reduced maintenance material costs 4.8% Reduced maintenance labor costs 6.2% Permanently avoided capital investment Avoided procurement costs Avoided purchases of carbon offsets 10% Enhanced image, public relations and recognition Reduced sales taxes/environmental penalties 10% Improved building value Total Additional Value from this ECM % Additional Value Improvement Beyond Energy Savings of $75,000/year 31% ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  15. 15. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  16. 16. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  17. 17. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Selling Energy Projects Agenda 2016 Tax Benefits Non-Utility Benefits Real Estate Value Improvement Reward vs Penalty
  18. 18. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Question: What is an “Actionable” ROI? (aka: Hurdle Rate) 10% ~ 10 year Payback 20% ~ 5 year Payback 33% ~ 3 year Payback
  19. 19. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Example: Two Identical Buildings Operating Costs $1 M/year$1 M/year A B
  20. 20. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com We Retrofit “B” Reduce Op. Costs by $200k/year Operating Costs $800K/year$1M/year A B
  21. 21. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Is “B” worth more? Operating Costs $800K/year$1M/year A B
  22. 22. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Increased sale value = (Annual Savings) x (Simple Payback Criteria) = $200k x 5 = $1 Million in increased sale value and Green Buildings have higher rent and occupancy (30% higher)
  23. 23. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Another Tip: Simple Payback vs ROI
  24. 24. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Compare: Simple Payback = 4 Yrs Customer Thoughts: I have to wait 4 years; How long will equipment last? What is my planning horizon? ROI = 25% per year Customer Thoughts: Wow, that is more than my 401k!! Wow, that is better than our company’s return! Even if I financed it at 10%, I would still get a 15%, which is better than “doing nothing”.
  25. 25. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Selling Energy Projects Agenda 2016 Tax Benefits Non-Utility Benefits Real Estate Value Improvement Reward vs Penalty
  26. 26. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Psychology: Reward vs Penalty
  27. 27. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Consider this reward:
  28. 28. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Penalty
  29. 29. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com How do you present? Reward vs Penalty
  30. 30. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Selling Energy Projects Agenda 2016 Tax Benefits Non-Utility Benefits Real Estate Value Improvement Reward vs Penalty
  31. 31. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  32. 32. Thank you Eric Woodroof, Ph.D. 888-563-7221 ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  33. 33. Utility Bill Data Helps You Get Buy- in For Energy Projects Steve Heinz, PE, CEM, CMVP Founder & CEO EnergyCAP, Inc. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
  34. 34. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com 1. Identifies inefficient buildings National and organizational benchmarking provides identification and corroboration Increases the confidence of decision-makers in energy management investments But benchmarking alone is not granular enough for most project-level decisions
  35. 35. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com National Benchmarking – ENERGY STAR
  36. 36. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com National Benchmarking – ENERGY STAR
  37. 37. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Organizational Benchmarking
  38. 38. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Organizational Benchmarking
  39. 39. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Organizational Benchmarking
  40. 40. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com 2. Verifies success of prior projects M&V (IPMVP-compliant Measurement & Verification of savings) increases the confidence of decision-makers in energy management investments An ESCO may have proprietary “black box” M&V process; EnergyCAP provides owner-operated validation of cost avoidance
  41. 41. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Cost Avoidance Reporting
  42. 42. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Cost Avoidance Reporting
  43. 43. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Cost Avoidance Reporting
  44. 44. ©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com Cost Avoidance Reporting
  45. 45. ©2015 EnergyCAP, Inc. ▪ @energycap ▪ #energyleader ▪ www.EnergyCAP.com Steve Heinz, PE, CEM, CMVP Steve.Heinz@EnergyCAP.com Founder & CEO EnergyCAP, Inc. Thank you for attending today’s webinar.

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