ACHRNEWS

April 27, 2010: Energy Efficiency Investments Expected to Increase

April 27, 2010

MILWAUKEE - According to a survey of decision makers responsible for managing commercial buildings, planned energy efficiency investments across North America are expected to rebound in 2010.

Known as the Energy Efficiency Indicator (EEI), the survey was fielded in March 2010. More than 1,400 business leaders responded to the EEI, which was commissioned by Johnson Controls Inc. and the International Facility Management Association (IFMA).

Clay Nesler, vice president of global energy and sustainability for Johnson Controls’ Building Efficiency unit, said the EEI results show that energy efficiency is receiving more attention from the CEOs, CFOs, real estate leaders, and facility managers who were surveyed. “Sixty-five percent of those surveyed say they are paying more attention to energy efficiency than they were a year ago.”

When it came to prioritizing energy efficiency, Nesler said, “We observed a dip this year.” In 2010, 84 percent considered it a priority, compared to 93 percent in 2009.

But investment is still expected to go up in 2010. Fifty-two percent of respondents plan to make energy efficiency improvements financed with capital expenditures compared to 46 percent in 2009. Additionally, 60 percent (up from 55 percent in 2009) plan to make operating budget investments in energy efficiency improvements over the next 12 months.

While enthusiasm for energy efficiency remains high, respondents said limited capital availability (38 percent) is the greatest barrier to capturing the potential energy savings, followed by issues with insufficient payback (21 percent) and savings uncertainty (16 percent).

Over the last 12 months, 41 percent reported investing less in energy efficiency as a result of tough economic times, but 32 percent invested more in energy efficiency, and 27 percent invested at historically consistent levels.

The most important factor driving energy efficiency, according to survey respondents, is energy cost savings. When considering energy efficiency investments, 44 percent require a simple payback of less than three years. Significantly, 64 percent believe energy prices will climb again during 2010, and the average expectation among respondents is a 7 percent increase.

The survey found that the likelihood of investment depended on organizational size and industry sector. Small businesses and organizations are much less likely to invest in energy efficiency compared with large businesses. Government and education organizations are more likely to invest, while the retail sector particularly lags behind.

“In summary, it appears that investment in energy efficiency is expected to increase in 2010,” Nesler said. “Even in the absence of federal climate legislation, the key drivers will be energy cost concerns, public image, climate leadership goals, and government incentives.”

For more information, visit www.johnsoncontrols.com.

Publication date: 04/26/2010