Our friends at EDF have just produced a report called “Breaking Down Barriers to Energy Efficiency” and was highlighted in a recent blog post on Fast Company. Make sure to read the blog and download the report.
SIS has found these three barriers to be true in our partnerships with mid-tier manufactures and industrial facilities.
Barrier #1: Lack of clear accountability
One of the most common challenges cited by companies was lack of clear accountability for energy performance.
Without that function written into a senior manager’s job description, many companies are unable to perform critical functions like setting energy strategy, identifying and prioritizing energy-saving investments, leveraging internal capital, and tracking actual energy savings.
SIS leads by example by embedding performance measures into our energy projects which sets the stage for our customers to then embed that accountability into their own organization.
Barrier #2: Lack of comprehensive energy data
Many companies struggle to collect and aggregate the energy data needed to build a strong business case for energy investments. Key challenges include ensuring that data is collected with sufficient frequency, specificity, and consistency to effectively identify opportunities and verify savings after projects are completed.
We leverage “paid-from-savings” model to insure that in each project our customers install smart meters or sub-meter their systems. The power of data and transparency is an unmatched catalyst for improvements.
Barrier #3: Shortsighted financial criteria
Energy-efficiency projects often face financial hurdles for accessing investment capital. While many projects pay back in the one to three years required by most companies, others can deliver much bigger savings over four to 10 years. By making decisions based on simple payback or ROI alone, companies leave money on the table by prioritizing short-term returns over longer-term value creation.
Our “do-nothing-math” is a very strong motivator for customers. In pointing out these figures we can move the client from a simple payback discussion to a more holistic discussion with metrics such as IRR.
Energy management should be treated no differently than any other waste reduction or efficiency efforts such as Lean and Sig Sigma. In fact, addressing these issues and formalizing a program around energy management can put your organization on the path to ISO 50001 certification.