Energy efficiency can affect many line items on a company’s Income Statement (also known as the “Profit and Loss Statement” or “P&L”). If you look at the full picture through the lens of business acumen, you’ll see how effective it can be to discuss the potential P&L benefits of your energy solution with your prospects. The following list gives you an idea of the types of line items that you may choose to discuss:
More sales: If you install attractive LED lighting in a grocery store, for example, the store would likely see an increase in grocery sales.
Less payroll: If your efficiency solution increases productivity (as we have discussed in previous blogs), employees may be able to do more work in less time.
Less repairs/maintenance: A new, high-efficiency product usually requires less maintenance than an old, less reliable one.
Less scrap: You may recall a story I told about the aluminum windows and doors manufacturer that reduced scrap rate by 25%, effectively transforming the simple payback of their lighting retrofit from 4.2 years (calculated using only the energy savings) to 39 days (calculated using the aluminum scrap savings as well).
Lower utilities: Of course, an efficiency solution should have a positive effect on the utility bill, so this one will be included in virtually every case.
Higher rental rates: With all of the added benefits of efficiency (not only lower operating costs but also greater convenience, comfort and/or control), your prospect may be able to increase rental rates without deterring potential tenants.
Better tenant retention: An efficient building is more comfortable, more attractive, and requires less maintenance. All of these factors help retain existing tenants who might otherwise choose to move to a building that features the high-end amenities you could now be offering your prospect.
Better tenant attraction: As in the case above, an efficient building is more comfortable and attractive than an inefficient one. Add in an ENERGY STAR® or LEED® certification and you’ve got yourself a recipe for tenant attraction.
Less need for Cap Ex Reserves: This is a topic that warrants further discussion, so stay tuned for more on this tomorrow!
