An objective function is a quantitative metric that captures the desired program outcome, which a Green Bank seeks to maximize. Every green bank must have a clearly defined objective function in order to define goals, track progress, design effective programs.

1. The Objective Function
Tracking Program Performance and Aligning
Outcomes with Strategic Goals

2. Objective function measures program performance,
aligns programs, goals
Objective
Function
A quantitative metric that captures
the desired program outcome,
which a Green Bank seeks to maximize.
• Purpose of objective function is to clarify what you
are trying to accomplish
• Must be a formula that enables you to focus on
maximizing a particular outcome
• Objective function aligns program with strategic goal
2

3. Objective function is maximize clean energy per dollar
Clean Energy Produced or Energy Saved
Dollars Spent, Held, Financed
• Generate/save more energy, objective function goes up
• Spend fewer public dollars, objective function goes up
X kWh
produced
$1 at Risk
or
Y MMBtu’s
or $Y saved
$1 at Risk
3

4. CEFIA residential solar objective function increasing
over time
Total CEFIA solar incentive dollars and annual kwh per dollar
4

5. Quantitative tracking enables green bank management
• Design programs aligned with green bank goals
– Provides guideposts that help program managers ensure all
elements are oriented toward a unifying goal
• Measure program outcomes, effectiveness
– Serves as a measurement tool to track program success over time
and compare effectiveness between programs
• Make informed decisions about dollar allocations
– Shows how dollars should be used within a product structure or
between products to maximize the desired goal
5

6. Compare programs across organizations
• CEFIA can demonstrate that its program was far more efficient than
the utility-run REC program
6

7. Objective function tracks progress and compares
program effectiveness
• Only by tracking program performance can a green
bank know if it is meeting strategic goals
• Objective function is easily-understood ratio that
shows how much clean energy you get per dollar
• Can be used to compare performance of programs
and guide decisions for allocating dollars
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8. Green Bank Academy
Washington, DC February 6-7, 2014
www.greenbankacademy.com