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April 16, 2008: Survey Reveals Increased Interest in Energy Efficiency, but Limited Action

April 16, 2008
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MILWAUKEE - According to the second annual Johnson Controls Energy Efficiency Indicator survey, nearly three-quarters (72 percent) of organizations are paying more attention to energy efficiency than they were just a year ago. However, the percentage of companies expecting to make energy efficiency improvements, as well as their planned investment over the next year, has remained constant.

“It’s one thing to be aware of a problem, and another to take steps to solve it,” said Clay Nesler, vice-president of global energy and sustainability for Johnson Controls. “But as energy prices continue to rise, our research indicates that the combination of economic pressure and environmental awareness will motivate people to make smart investments that have a big payoff in the long term.”

Johnson Controls commissioned the survey of 1,150 North American executives, with the research conducted in March 2008. The research identified energy management decision-makers and asked how their organizations were responding to rising energy costs and environmental issues. Members of the International Facility Management Association were included as survey respondents.

The company noted it may be that the full impact of rising costs is yet to be acted upon by industry. In last year’s survey, 79 percent of respondents said they expected energy costs to rise, and the average anticipated increase was 13.25 percent. According to the Energy Information Administration, however, the reality was that while crude oil prices jumped about 30 percent between the first and fourth quarters of 2007, commercial natural gas and electricity prices were flat.

In this year’s survey, 80 percent of respondents believe that natural gas and electricity prices will rise an additional 13.79 percent over the next year.

While interest in energy efficiency and energy management has increased significantly from last year, related investments have remained steady. The most significant growth in energy efficiency measures include replacing inefficient equipment before the end of its useful life (41 percent, up 13 percent from 2007) and switching to energy efficient lighting (78 percent, up 11 percent). Also, 88 percent claim that energy efficiency is a design priority in construction and retrofit projects, up 11 percent from just a year ago.

“Businesses are starting to move beyond the low-hanging fruit and make more significant energy efficiency investments,” said Nesler. “It appears that, with more energy efficient design in future development, we’ll see a broader, farther reaching approach to the way in which companies react.”

For 53 percent of respondents (up 5 percent), environmental responsibility is an equal or greater motivator for investing in energy efficiency than cost reduction. Seventeen percent cited environmental responsibility as the stronger motivator, up from 13 percent in 2007. Thirty-six percent (about the same as last year) said they were equally motivated by environmental responsibility and cost savings.

Some expectations for the coming years include the following:

• Nearly 40 percent believe it is extremely or very likely that, within the next two years, legislation will mandate energy efficiency and/or carbon reduction.

• Nearly one-third (31 percent) believe that green buildings will be extremely or very important in attracting and retaining future employees.

Executives surveyed appear increasingly open to investments in renewable energy. In response to a new question this year, 38 percent said that solar electric panels was being either included or considered in their new construction or retrofit projects, and 24 percent said they were including or considering solar thermal panels for their projects. One possible explanation is that a significant percentage of executives (38 percent) said their companies felt it was extremely or very important to minimize dependence on traditional energy sources such as gas, oil, and electricity.

For more information, visit www.johnsoncontrols.com.

Publication date: 04/14/2008

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