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‘Massive’ Amount of Capital Not Spent for Intelligent Buildings

March 16, 2015 By Linda Hardesty

CleantechA white paper published by the Cleantech Group says that based on discussions at its Buildings Get a Brain summit in January, there is a massive amount of capital to go around, but it is not being massively deployed for intelligent buildings.

The Buildings Get a Brain White Paper also finds there are numerous existing financing models for building equipment, but it’s unclear why there’s not more investment in building technologies.

According to the white paper, many new building technologies are asked to prove stringent ROIs that are not always asked of other corporate investments or expenses. This is a complex issue related both to legitimate technology performance uncertainty as well as to inefficient decision-making processes within buyer organizations. On the latter front, the typical sales conversation for building systems entrepreneurs seems incredibly disjointed and is recounted by several Summit participants roughly as follows:

1. Buyer claims that management of occupant comfort is both the biggest concern and the biggest use (and often waste) of time.

2. Seller offers optimization platform that delivers energy cost savings while simplifying the process of keeping occupants comfortable.

3. Buyer rejects offering on notion that ROI is not quick enough despite not having quantitative evaluation metrics to justify the existing manual, time-consuming systems and operating rhythms currently being used in the first place.

The root causes of this situation are not necessarily straightforward, but include a threat of obsolescence felt by operations and maintenance personnel, overly stringent ROI demands from mid-level or senior finance staff that are removed both from day-to-day operations and from C-suite strategy, and real technological integration challenges and capital risks, says the white paper.

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