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Arguing for a Retrofit? Consider a Corporate Energy Fund

February 25, 2015 By Karen Henry

Energy Fund Energy ManageCreating a corporate energy fund dedicated to holistically evaluating and approving renewable energy installations can help organizations find ways to invest in facility upgrades or retrofits that otherwise might not be approved, according to an article on the Greenbiz website.

When establishing a corporate energy fund, there are a number of things businesses should consider:

  1. Make the fund a reasonable percentage — 10 percent, for example — of the company’s annual energy budget.
  2. Present upgrades or retrofits as investments. Using the word “investment” rather than “spend” will help justify the company’s selected internal rate of return (IRR).
  3. Pool projects to balance rates of return. For example, cross finance higher return projects such as LED retrofits with ones with a longer pay-off period such as boiler upgrades.
  4. Don’t ignore low-hanging fruit. Previous investments, such as LED installations and building automation, should be reviewed regularly as technology evolves.
  5. Set project minimums. This can help weed out weaker proposals.
  6. Offer guidance. Create programs to help facility managers understand what type of improvements and technologies would have the most positive impact.
  7. Consider accounting impacts. Rather than transferring money to the division investing in an improvement, consider funding in the form of budget relief.
  8. Make sure the benefit stays with the facility. Structure projects in a way that doesn’t have a negative impact on a particular facility’s books.
  9. Monitor progress. Verify the specific impact that projects are having using mobile applications and other software.
  10. Highlight the societal impact. Benefits to society and the planet should accompany financial arguments for energy efficiency projects to show their value beyond cost savings.

Photo via Shutterstock.

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