Why is the reality of energy efficiency so bleak?

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Courtesy of Vital Efficienci Ltd.

Considering that making money and creating wealth is the primary objective in every business, one would expect companies to squeeze out every bit of profit from their operations by making them efficient and technologically advanced.

However, the reality of energy efficiency seems to be still a bit bleak and most companies are so preoccupied with external factors that contribute to top-line growth, that they often neglect operational improvements and energy efficiency - two opportunities with huge potential to boost the bottom line.

There is no shortage of reasons for a company to look at energy efficiency projects with utmost urgency, regardless of its stance on going green. In simple words, energy efficiency and operational improvements pay.

Moreover, government and utility providers across the nation provide rebates that make energy efficiency projects financially appealing to companies. In the past, companies used to complain that getting facilities and plants audited for energy efficiency was a cumbersome process. This argument, though possibly true a few years ago, does not fly anymore.

What should companies do to join the energy efficiency train?
•Knock on the right door: Companies simply need to knock on the right door for help. One of the first steps in taking control of the energy consumption of your organisation is to understand the energy use within their premises by undertaking a Energy Assessment. This will help you identify the opportunities for improving energy efficiency. Envido’s expert Energy Assessors will assess current performance and identify priority areas for action, with the best return.

•Jump on the bandwagon while you can: Time is running out. Under the CRC energy efficiency scheme, any company in the UK with a half hour electricity meters installed at the end of 2008 has to report its electricity meter details to the Government by September 30. Otherwise, they face fines of at least £500. The Environment Agency, which is running the CRC Energy Efficiency scheme, had forecast that around 20,000 companies would need to disclose their energy use and 5,000 would need to join the scheme. The number of declarers seems to be accelerating, but there’s still hasn’t reach the predicted 20,000 marks.

•Get with the (business) times: Many companies continue to rely on simple payback methods for capital budgeting and are, at times, unwilling to invest in projects that have a payback period that is longer than 1 to 2 years. Though easy and intuitive, this does not account for time-value of money, nor does it consider the cash flow that may occur after the payback period. Yet, plenty of companies still dutifully follow this method. The end result is that many, otherwise profitable, green projects simply never happen.

Fortunately, many Companies are making significant progress in their sustainability efforts and are willing to walk an extra mile to capture the gains of energy efficiency projects. Increased awareness among consumers motivates companies to move in the right direction as well. Hopefully, this trend will continue to spread like wild fire, leading to meaningful, positive impacts on our entire planet.

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