What Kind of Green Do You Mean?
July 5, 2010
It used to be that “green” was slang for money - that cold hard cash, those Andrew Jacksons and Benjamins - green represented that ever-important dollar. But nowadays it seems that everyone only uses the term “green” to mean eco-conscious or environmentally sustainable.
What’s becoming increasingly evident, though, is that people only choose to be environmentally green when it’s good for the green in their pocketbook.
We’ve recently highlighted a few reports in Newsline about surveys commissioned by Johnson Controls of decision-makers who are responsible for managing commercial buildings. These Energy Efficiency Indicator (EEI) reports have shown that there is strong interest and enthusiasm among these individuals - across North America and the world - in investing in energy efficiency for new and existing buildings.
But even more telling is what survey respondents reported as the greatest factors influencing them toward and pushing them away from investing in energy efficiency. In both cases, their answer was money.
More specifically, North American respondents ranked saving money on energy costs (97 percent) as the most significant factor influencing their decisions about investing in energy efficiency.
In order of priority, the other factors weren’t even close. Next in the rankings were enhanced brand/public image (63 percent), government/utility incentives (62 percent), and greenhouse gas emissions reduction (62 percent).
I think translating those numbers into everyday conversation would sound like: “If we invest in energy efficiency, our No. 1 priority is to save money. And oh yeah, improving public image and helping the environment are nice, too. Plus, qualifying for rebates is good - although, really, that’s just another way of saving money.”
Maybe there are times when a desire to be cleaner and greener trumps cost savings, but these are certainly not those times. And this is made even clearer by the survey’s report about the greatest obstacles to investment in energy efficiency.
Survey respondents reported limited capital availability as the greatest obstacle to investment (38 percent), followed by concerns about insufficient payback (21 percent) and savings uncertainty (16 percent). Did you catch that? On the flipside, the top three barriers were also all related to money.
So saving money on energy costs is the most attractive reason to consider investing in energy efficiency. But commercial building managers are worried about having enough money to begin with. And they’re apprehensive about how long it will take to recoup that money and whether the estimated savings will really arrive.
According to the EEI, the surveys over the last three years have consistently shown that nearly one-half of respondents need a simple payback period of less than three years for their investment. So, most people need to be convinced that their investment will pay for itself in three years.
Although only commercial building managers were surveyed in this instance, it could be easily argued that these same perceptions and trends apply in the residential arena. I’ll go out on a limb and venture to say that homeowners are at least as likely as building managers to be worried about money.
SELLING ENERGY-EFFICIENT EQUIPMENTBased on these trends, the logical approach to selling energy-efficient equipment is to continue to build a better case for how it saves money. Working to increase customers’ confidence in the ability of energy-efficient technologies and equipment to save them money down the road will only serve to increase their desire to invest. And it’s also clear that those savings need to be demonstrated before it gets too far down the road.
When you can prove that certain behaviors, habits, patterns, equipment, etc. are actually going to save money within a relatively short period of time, you’ll get the attention of businesses and individuals. And, hopefully, you’ll be able to turn their attention into investment in newer, cleaner, more efficient technologies, products, and equipment.
Because when it comes down to it, right now the green in their wallet beats any other green out there.
Publication date: 07/05/2010