Resources for Building the Business Case for Energy Efficiency

By Better Buildings Beat Team on Sep 28, 2021

Implementing a robust energy efficiency plan across an organization requires buy-in from leadership – especially when it comes to funding. Balancing costs of upgrades to support energy efficiency with competing priorities for funding is most successful when presented with a clear and compelling case.

Advocates for efficiency should be prepared to answer the following questions before approaching financial and leadership teams at their organization about proposed energy efficiency projects:

  • What are the expected energy and cost savings over time?
  • How does the project align with organizational goals?
  • What are the upfront costs and how can they be paid?
  • How will operations be impacted?
  • What are any associated risks and benefits?

Communicating Energy & Cost Savings: Successful Examples from Better Buildings Partners

Justifying investment in energy efficiency can be most effectively communicated to financial decision-makers when speaking in financial terms. Better Buildings partner USAA’s Building Upgrade Value Calculator can convert expected savings to meaningful metrics for financial team members. The Energy to Finance: Understanding the CFO and Translating Metrics presentation from the Retail Industry Leaders Association provides further guidance on communicating the value and impact of sustainability initiatives from a financial perspective.

Facing a lack of buy-in for energy efficiency projects despite prior successes, partner Kohl’s Department Stores embedded financial team members in the energy team to establish relationships and more effectively communicate the benefits of efficiency proposals. This case study examines how the energy team executed more fiscally-palatable projects to demonstrate financial savings.

Finance officers and other departments may also be concerned that investing in energy efficiency will divert funds from competing needs. Better Plants partner 3M recognized the working knowledge of production staff and asked for their suggestions to inform sustainable improvements that aligned with organizational goals without disrupting operations. In addition to creating a better-informed approach, 3M reported better employee retention and satisfaction as well as increased trust in management. 3M’s Energy Manager explains how the company achieved its goals and measured success in the 2021 Summit session: Making the Case for Energy Efficiency.

Considering the Risks & Benefits

Increasing energy efficiency can improve resilience by reducing overall energy demands during power disruptions, especially when paired with on-site generation, and help mitigate impacts contributing to major climate and weather events. Prioritizing resilience is also increasingly considered a necessary measure for attracting investors and protecting the value of the property and company. DOE compiled information on the investor perspective, CFO communications, and risk measurement in a fact sheet on Building the Financial Business Case for Resilience. NREL’s REopt Lite tool helps building managers evaluate and optimize renewable energy and storage projects and analyze resilience. Explore more strategies from Better Buildings partners to model and improve resilience here.

Commercial building owners and managers can find more information about making the case for energy efficiency in this toolkit. Organizations can read about project financing options here. Visit the Better Buildings Solution Center to find out more.