Electrical Testing
Selling Energy Savings

Selling Energy Savings

Be as specific as possible about the benefits of energy-saving strategies you are proposing.

You proposed installing power factor correction capacitors on some large motors and variable speed drives on others. Management looked at the price tag and said no, despite the fact that these aren’t particularly expensive improvements.

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Many decision-makers seem to think that buying a few LED screw-in lamps is about as big an investment as they care to make in energy savings. What can you do about this? Let’s look at some common barriers to acceptance and what you might do to overcome them.

  • They’ve heard it all before. To many decision-makers, “energy savings” sounds the same no matter what it is. And if it costs more than light bulbs, they cringe. Always frame the proposal in specifics.
  • You weren’t specific enough. Saying you can “improve energy efficiency” with a $3,500 project isn’t very compelling. Saying you can reduce energy consumption by 11% is more specific. Saying you will reduce stress on a critical motor that drives a $150,000-per-hour production line while also reducing energy use by $1,800 a year is even more compelling.
  • You’re barking up the wrong tree, or the wrong budget. Many energy projects get proposed as part of the construction budget, and the benefits go to the operations budget. You need to develop a list of benefits for each pool of stakeholders, and show them what they gain. That’s why, for example, adding in the part about the $150,000-per-hour production line is so effective.
  • You’re pitching to the tenant or to the owner. This is similar to the previous issue. Contractors often face this with commercial occupancies. The tenant wants lower energy bills, but doesn’t want to pay for improvements on a leased building. The owner doesn’t save money by paying for those improvements. But what if the owner received a rent increase equal to 80% of the energy savings? The tenant effectively gets a 20% reduction in rent. Pitch a win-win like this to both parties, and you become persuasive. You can use the same approach for industrial budget barriers.
  • It’s more than they can handle. Sticker shock, regardless of the ROI, can tank even a really solid proposal. Develop three levels of energy savings (good, better, best), with the appropriate price tags. In our motor example, you could make your real proposal seem less expensive by creating a “best” proposal that also includes upsizing the feeder and branch circuit conductors.
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