Energy Efficiency Spending Rebounds

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Those looking for signs that the U.S. economy is rebounding can find encouragement in the fourth annual Energy Efficiency Indicator released earlier this month by Johnson Controls. A survey of more than 1,400 North American executives and managers responsible for making investments and managing energy in commercial buildings found that planned investment in energy efficiency is expected to rebound in 2010.

Following a decline last year, the survey found that 52% (up from 46%) are planning to make capital investments in energy efficiency and 60% are planning (up from 55%) to make operating budget expenditures in efficiency programs over the next 12 months. However, a significant number of the business leaders surveyed (38%) said that the largest barrier to making energy efficiency investments is limited capital availability.

“Our research shows attention to energy efficiency is continuing its growth among business leaders,” said Dave Myers, president of Johnson Controls Building Efficiency business. “Commercial buildings consume 18% of the energy and 35% of electricity used in the U.S. each year. A focus on improving energy efficiency in existing buildings is the best way to address carbon reduction goals being set by a growing number of organizations.”

The Energy Efficiency Indicator (EEI), in its fourth year, tracks energy management priorities, practices and investment plans among decision makers responsible for commercial buildings and their energy use. Johnson Controls is currently conducting the survey in other parts of the world including China, France, Germany, India, Poland, Spain, and the United Kingdom, with results to be released at events during the summer of 2010.

The North America research was conducted by Johnson Controls in association with the International Facility Management Association (IFMA) and the American Society of Healthcare Engineering (ASHE). A total of 1435 decision makers were surveyed in North America between February 23 and March 15, including CEOs, CFOs, real estate leaders, and facility managers from a range of organizations including small businesses, global corporations, and the public sector.

“This research helps our members to compare their priorities and energy management efforts with those of their peers,” said Donald Young, vice president of communications for IFMA. “This year’s results demonstrate that workplace professionals not only play a major role in controlling operational costs, but also are among the most important decision makers when it comes to managing an organization’s carbon footprint and public image.”

According to this year’s survey, 65% of business leaders say they are paying more attention to energy efficiency than they were one year ago; 84% of respondents say that energy efficiency is a priority for new construction and retrofit projects planned for this year.

The most important factor influencing energy efficiency decisions is energy cost savings, with 97% of respondents identifying it as significant. Sixty-four percent expect energy prices to rise in 2010. Overall, the average expectation of respondents is a 7% increase in the combined price of energy over the next 12 months.

The next most important factors influencing energy efficiency decisions are enhanced public image (63%), government and utility incentives (62%), and reducing greenhouse gas emissions (62%). This climate concern is growing in importance, up from 57% that considered greenhouse gas reduction a significant factor in 2009.

Seventy-five percent of decision makers believe significant legislation mandating energy efficiency and/or carbon reduction is likely within the next two years, compared to 85% in 2009 and 76% in 2008.

“Interestingly, despite a slight drop in expectations for climate legislation this year, more organizations are setting voluntary carbon reduction goals,” said Clay Nesler, vice president, Global Energy and Sustainability, Johnson Controls. “Organizations are using a variety of strategies to meet these commitments, but the vast majority identify energy efficiency in buildings as their top climate strategy.”

When asked what specific energy efficiency improvements have been implemented over the past 12 months, the most popular are those with low capital cost and/or a rapid return on investment. The survey shows that 72% switched to energy efficient lighting; 63% trained facilities staff; 61% educated building occupants to save energy; 56% made set point adjustments; 40% installed occupancy or daylight sensors; and 33% upgraded building controls.

Executives were also asked this year to predict what energy-related technologies would see the greatest improvement in performance-to-price ratio over the next 10 years. The top picks were lighting (51%), smart building technology (44%), solar PV (38%), electric and plug-in hybrid vehicles (28%), and nuclear power (22%).

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2 Responses

  1. Peter says:

    It is encouraging to read that companies are more and more keen on improving energy efficiency. As an architect, I have found that it is the schools, or public buildings, that more often embrace “green” infrastructure without hesitation. To see increasing numbers in businesses’ application of energy-efficient improvements and implementation is great – and fascinating to see how the motivation (good press vs cost-savings, etc) is broken down.

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