Energy Efficiency is Gaining a Seat at the Corporate Table

efficiencyThe benefits of energy efficiency – and the software that increases effectiveness of such efforts — are obvious. That’s why it seems strange that getting organizations to adopt even simple measures is a struggle.

But the times are changing. A good example of the progress energy intelligence software (EIS) is making was a deal announced last week between EnerNOC and Longo Brothers Fruit Markets, a 31-store chain in the Toronto area. “What is interesting about these types of deals is that more and more business decision makers are viewing energy as a controllable expense that can really be a competitive differentiator,” said EnerNOC Senior Director of Marketing Sarah McAuley.

Making money is difficult. The alternative – spending less of what you do have – generally is a bit easier. “When you think about grocery stores and similar industries and the razor thin margins they operate on where, saving a dollar of energy is the equivalent of selling [something like] $25 worth of groceries,”McAuley said. When think of energy through that lens suddenly it is a lot more compelling to think of new and interesting ways to be more strategic about how you are managing this major cost input into our business.”

It is not clear cut, however. While it is common sense to take companywide steps such as ensuring that equipment is turned off when not needed and LEDs installed, it is not always done. McAuley pointed to studies that show that economic justification in the form of quick return on investment (ROI) and other metrics is high for energy projects – but that they still struggle to get buy-in from executives.

Why, then, has it taken so long for energy efforts to move to the top?

One reason, McAuley said, is simply that managing energy on a corporation-wide basis is not as easy as suggesting that everyone power down their PCs before heading home. One obstacle is that the nomenclature describing power is unfamiliar to those who sign off projects. “People who are really responsible talk about ‘kilowatts” and “kilowatt hours’ and ‘BTUs,’ she said. “The people who do budgets talk in dollars. There is a disconnect.”

While projects can be fairly simple, it is easy to underestimate the complexities of rolling them out in a nationwide or multinational organization. A company with facilities in different states and regions of the country has to deal with what can be a bewildering set of rules and regulations. Furthermore, many of the financial benefits from energy efficiency programs come from utility rebates. Thus, organizations would have to determine how to deal with each on a case-by-case basis. “Energy is really complicated,” McAuley said.

The tide is changing, however. The higher profile that energy efficiency is getting is forcing executives to deal with its complexity. McAuley says that investors want to know what organizations are doing to drive efficiency and millennials choosing between employment opportunities look favorably at companies that take the issue seriously. C-level executives may not be too resistant: After all, they are just as likely to favor efficiency and, at the end of the day, the pot of gold at the end of the rainbow is savings and a healthier bottom line.

McAuley says that the sectors that are most responsive to this point are most responsive to this point are real estate, manufacturing, food retailers and, in general Fortune 1,000 companies that manage geographically dispersed holdings.

The bad news is that energy efficiency still is struggling to get a seat at the corporate table. There is plenty of upside, however, as software emerges that remove the obstacles that have slowed down progress and organizations see that both their images and bottom lines will benefit by being proactive.

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