How Do I Prove the Value of Energy Management to My CFO?
It’s estimated that the average office building spends about 29 percent of its operating budget on utilities, namely electricity and natural gas. As the facility manager for your company, it is likely that you have thought about which building components consume the most energy, how energy consumption impacts overhead and more importantly, where energy might be wasted.
You already recognize that energy costs can be decreased, but convincing executive decision-makers to allocate some of the company’s budget for energy efficient endeavors is no easy task.
Their focus is on maximizing profitability and unfortunately, they don’t always view energy as an investment or recognize its payoff. Nonetheless, it’s your job to run the most efficient facility possible, which will require convincing the CEO or CFO that investing in an energy management solution is not only impactful, but necessary to keep operating costs down, asset value up and occupant comfort reasonable. To get the message across, it’s going to take some gusto. Here’s how to show your CFO or CEO the value of energy management.
1. Lead With the Bottom Line
If you want adequate time to fully pitch your case, you must quantify the benefits of energy management upfront. It is estimated that 30 percent of commercial buildings’ energy costs are wasted. It is also estimated that with an energy management solution, businesses can save as much as 10-percent in energy expenses annually, according to Energy Star.
Take your case a step further and do the math. Find out what your company spent on energy last year and calculate the potential savings. Hard facts are sure to capture your executive decision-maker’s attention.
2. Explain How it Works
Energy management tools and solutions provide data integration, automation and real-time visibility into consumption, materials, waste, energy and carbon emissions; enabling facility managers to identify trends and implement strategic operational changes to decrease waste. With greater insight into how a facility consumes its energy, managers can set savings goals and monitor energy usage to ensure those goals are met and perpetuated.
3. Assure ROI Measurability
Energy management services, products and solutions not only make ROI measurability possible, but also easy. Instead of using estimates to project ROI, energy management tools offer exact data from which to gauge the success of your energy strategy.
Additionally, by choosing the right provider to work with, your company will have the option of bundling its commodity and energy efficiency solution. By rolling the cost of their energy efficiency project into a power contract, they can simultaneously reduce consumption and spend.
4. Cover the Peripheral Benefits
Energy management strategies don’t require fixture replacements or retrofit projects that can be costly, messy and disruptive. In addition to overall energy bill savings, an energy management solution will also act as a diagnostic tool, identifying mechanical issues before they become larger problems. Lastly, achieving sustainable energy efficiency could qualify your company for LEED certification and certain tax deductions, contributing even further to cost savings and bottom line health.
To bring your case to a close, remind your executive decision-makers that the more optimized a process is, the greater the potential for cost savings. A building’s energy distribution is no exception to the rule.