According to a survey conducted by Noesis Energy, the primary reasons why energy-efficiency projects are not getting approved are i) the inability to get funding; and ii) uncertainty about savings estimates.
Noesis’ recent Energy Project Survey, which received responses from 476 energy managers and energy consultants in the commercial and industrial sector, found that energy managers have good success rates, with 36 percent of them securing approval for half or more of their projects, and 75 percent getting approval of at least one in four projects. But consultants do not fare so well, even though they are originating more proposals. Half of the consultants surveyed report less than one in four of their projects get the green light.
For those projects not approved, more than half the time, “not budgeted” is cited as the reason. One-quarter of the projects are derailed by a “lack of certainty” of their estimated savings.
Other survey highlights:
- More than 50 percent of consultants propose 11 or more energy projects per year, with 32 percent pitching 25 or more projects. This compares with 75 percent of energy managers, who propose less than 10 projects per year.
- Nearly half of the energy projects proposed are valued between $50,000 and $250,000. Taken in conjunction with the number of projects managers and consultants report, these energy professionals are pitching millions of dollars on energy-efficiency expenditures.
- With funding emerging as the top reason for project rejection, Noesis asked whether third-party financing, such as leases or energy savings agreements, was included in the proposal. Only 10 percent of consultants include financing all of the time, while 43 percent never include it. Meanwhile, 60 percent of energy managers do not include financing in their proposals.
- Why not include financing? 56 percent of energy managers say they don’t need it because they aim to fund projects internally. For energy consultants, 68 percent said that they don’t know enough about financing options, or don’t have the time to research and find them.
- Tracking energy performance is becoming more commonplace. The majority of those surveyed require that savings be tracked at least some of the time, with 65 percent of energy managers requiring it most or all of the time.
To close the gap between projects in need of funding and appropriate financing, Noesis launched a matchmaking service to connect building managers and owners wanting to invest in energy-efficiency projects with financing companies that specialize in loans for such projects.
Noesis’ first annual Energy Project Survey conducted in June and July looked at the number of projects proposed, their average size, approval success rate, reasons for not getting approval, the role of financing options, and importance of tracking energy savings to justify and reinforce the investments. Professionals surveyed included corporate managers (such as energy managers, facility managers and sustainability directors), external consultants and auditors, and manufacturers and resellers of energy-efficiency products.