How to Get Buy-In for Your Energy Project

Tips To Sell Your Energy Projects
Eric Woodroof, Ph.D.
888-563-7221
©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com

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

Our Clients

Promotional Discount Code
ECAP
20% off (this week)

Selling Energy Projects Agenda
2016 Tax Benefits
Non-Utility Benefits
Real Estate Value Improvement
Reward vs Penalty

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

Value of Tax Benefits
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

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…

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

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©2016 EnergyCAP, Inc. ▪ www.EnergyCAP.com
Selling Energy Projects Agenda
2016 Tax Benefits
Non-Utility Benefits
Real Estate Value Improvement
Reward vs Penalty

Question: What is an “Actionable” ROI?
(aka: Hurdle Rate)
10% ~ 10 year Payback

Example: Two Identical Buildings
Operating Costs
$1 M/year$1 M/year
A B

We Retrofit “B”
Reduce Op. Costs by $200k/year
Operating Costs
$800K/year$1M/year
A B

Is “B” worth more?
Operating Costs
$800K/year$1M/year
A B

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)

Another Tip:
Simple Payback vs ROI

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”.

Psychology:
Reward vs Penalty

Consider this reward:

Penalty

How do you present?
Reward vs Penalty

Thank you
888-563-7221

Utility Bill Data Helps You Get Buy-
in For Energy Projects
Steve Heinz, PE, CEM, CMVP
Founder & CEO
EnergyCAP, Inc.

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

National Benchmarking – ENERGY STAR

Organizational Benchmarking

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

Cost Avoidance Reporting

©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.

How to Get Buy-In for Your Energy Project

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