3 reasons why your Energy Proposals are never approved
Before I start doing an energy audit, I normally ask my clients if there are any previous energy audits reports and if I can have access to them. My primary reason often is to find out whether any of the recommendations proposed by my predecessor auditors have actually been implemented. I try to find out whether the audit made any impact. In many occasions, from my analysis, none of the recommendations previously proposed ever get implemented.
So why do companies invest in doing an energy audit only to let the audit report gather dust on the shelves? Why is it so difficult to even implement the no-cost energy conservation measures? From my experience and research, I think it boils down to three things;
- Trust– Most companies simply do not trust the energy proposals in the audit report. Some numbers look too good to be true. I mean, where else do we find investments with less than a 2 year payback or even less? But are most of these savings true? Sure they are true. I have come to find out that most companies really waste a lot of energy and some of them just can believe it when you show them the waste. Energy is not a visible product. There are ways to make it visible but most of the time not through the energy audit report.
- Poor Selling – The energy efficiency world is field dominated with technical engineering professionals. These are people who have high technical skills in engineering math and engineering technology. Selling is not a natural strength in this industry. Most energy proposals are therefore loaded with technical engineering calculations of kWh savings and functionality of engineering technology. This is not the language of CEOs and CFOs. The people who approve projects (CFO’s) do not want to understand kWh, BTUs and engineering technology. CFOs are only keen to make informed investment decisions, they are not focused on engineering efficiency technology. So if your 64 page technical audit proposal is on the CFOs desk, you can probably count on it gathering dust if it’s not structured in the right language that the CFO understands.
- Budget – Lack of budget. Most energy efficiency decisions are not factored in the budget. Energy efficiency projects are normally unanticipated until when you present your proposal. The CFOs will normally be constrained by budget as a lot of projects are competing for the funds. Actually the biggest hurdle to approval of energy efficiency proposals is normally lack of capital.
So is there a way you can circumvent these challenges and get your energy audit proposals approved? Sure there is. We shall discuss that in our next post.