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Research predicts rebound in energy efficiency spending

Tue, 05/18/2010 - 5:24am
Jennifer Layke, Director of the Institute for Building Efficiency, Johnson Controls
Despite tight budgets and limited capital availability, North American business executives and managers are putting their faith behind the value of energy efficiency. Recent research shows commercial buildings consume 18 percent of the energy and 35 percent of the electricity used in the U.S. each year. And with energy prices expected to rise, executives are worried about not only their carbon footprint, but also their bottom lines. Energy efficiency has never been more important.

A recent survey of more than 1,400 North American decision makers responsible for managing investments and energy use in commercial buildings reinforced the strategic value of green. In fact, 65 percent say they are paying more attention to energy efficiency than they were one year ago.

Johnson Controls, in association with the International Facility Management Association (IFMA) and the American Society of Healthcare Engineering (ASHE), conducted the North American Energy Efficiency Indicator (EEI) survey in March of 2010. Now in its fourth year, EEI tracks energy management priorities and the practices and investment plans of CEOs, CFOs, real estate leaders and facility managers from a range of organizations including small businesses, global corporations and the public sector.

Planned capital and operating investments on energy efficiency on upswing
The research found that planned energy efficiency investments across North America have rebounded since 2009, motivated primarily by cost reduction, public image, government and utility incentives, and climate change concerns.

Fifty-two percent of respondents (up from 46 percent in 2009) plan to make capital investments in energy efficiency, and 60 percent (up from 55 percent) plan to use their operations budgets to improve energy efficiency in their buildings the next twelve months. However, barriers remain. The largest barrier to making energy efficiency investments is limited capital availability followed by issues with insufficient payback and savings uncertainty.

High level of interest in low cost investments and rapid ROI
With those barriers in mind, it is not surprising to find that technologies with low capital costs and/or rapid returns-on-investment have garnered the highest levels of interest among decision makers. Over the past twelve months, 72 percent reported pursuing more efficient lighting at their facilities. And when asked to predict what energy-related technologies will see the greatest improvement in performance-to-price ratio over the next 10 years, the top picks were lighting (51 percent), smart building technology (44 percent), and solar photovoltaic electricity systems (38 percent).

Building efficiency is the top priority for those seeking to decrease their carbon footprint
More North American businesses are making public commitments to reduce their greenhouse gas emissions, yet that trend has yet to hit the mainstream. Fourteen percent set and publicized carbon emission reduction targets, up from 12 percent of respondents last year. Among those who have prioritized their strategies to reduce their carbon footprint, a large majority point to improving energy efficiency in their buildings as their top climate solution.

As business leaders continue to keep a watchful eye on energy prices and economic conditions, it has become clear that the financial storm has not forced all commercial leaders to take cover. In fact, 32 percent have invested more in energy efficiency as a result of the recession, perhaps to become leaner and more competitive over time by reducing their electricity bills.

How do these results compare internationally? Johnson Controls’ Institute for Building Efficiency, a new initiative providing information and analysis of technologies, policies, and practices for efficient, high performance buildings and smart energy systems around the world, will explore trends, practices and priorities for global commercial building executives and managers. In the summer of 2010 the results from the international Energy Efficiency Indicator will be released, which is currently being conducted in eight major languages in countries across Europe and Asia.

The full results of the North American EEI study are available online. Visit http://www.institutebe.com for more information.
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