Motivating Business Leaders to Improve Profitability Through Energy Efficiency

The Executives for Energy Efficiency project, initiated in January 2003 and culminating its first phase in July 2003, is a New York state-based study of corporate receptiveness to energy efficiency implementation. The mission of this project is to develop a strategy that will “motivate New York business leaders to improve business performance through energy efficiency.” This project is coordinated by the New York State Energy Research & Development Authority, the U.S. Department of Energy, and the Alliance to Save Energy. Download the Report

This effort secured the advice and direction of a Steering Committee of business stakeholders from New York State. Through a series of meetings, discussions, and case study analyses, this project articulated a set of common hurdles to the implementation of energy efficiency initiatives. These hurdles are listed in the table (below). Each hurdle is defined by a business issue, presented here with a suggested strategy for overcoming that hurdle. In this analysis, the business issues include tariff concerns, the organizational design and pursuit of efficiency initiatives, and the cost-benefit and risk perceptions associated with project evaluation.

HURDLES TO BUSINESS ENERGY EFFICIENCY
Segment	Defining Business Issue	Critical Success Factor	Stragegy or Approach
1	Lacks organizational stability	Needs management stability, vision, champion	Ensure success by screening early program participants
2	Investment bias for core business	Responsive only to episodic energy crises	Step up program media/outreach during crises
3	Fixation on energy PRICE; oblivious to EXPENSE	Lowering of energy prices/tariffs	“Risk buster” tariff for qualified projects
4	Lacks technical appreciation	Needs case studies, proven precedents	Establish cadre of demonstration providers
5	Defers to production/business climate risks	Needs metering, documented hard data	Coalitions of first-movers to pool data, risk
6	Jaded by energy “snake oil” from the past	Secure sponsors/providers with prestige	State to pre-qualify energy service companies (ESCOs), architectural & engineering consultants, and similar service providers
7	Conservative capital investment criteria	Availability of guarantees and financing	Apply SBC funds to debt pools, guarantees, tax credits
8	Sensitive to fuel price/tariff risk	Ensure tariff/price stability	“Risk buster” tariff for qualified projects
9*	Company compelled to adopt energy efficiency	Company edict, vision, or culture paves the way	Recognize, award, and promote to industry peers

SOURCE: Executives for Energy Efficiency Steering Committee & Staff
*Segment 9 does not represent a “hurdle,” but recognizes the proactive pursuit of efficiency.

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