A panel discussion at a recent Fortune Brainstorm Green session resulted in a list of five key roadblocks to energy efficiency, reports Environmental Defense Fund (EDF). Panelists included Google’s Green Energy Czar Bill Weihl, and Gretchen Hancock, project manager for corporate environmental programs at GE.
The number one barrier is information overload and a lack of focus, which means companies need to focus on the right tools and prioritize where and how to begin. As an example, GE cites it conducts regular “treasure hunt” sessions to identify energy-efficiency savings at a specific manufacturing site, which typically yields opportunities to reduce energy by 20 percent.
Another big barrier is structural limitations where business units and departments are managed by separate budgets, performance timelines, product cycles and other factors, leading to communications issues and a lack of common goals. Google’s strategy is to use a “total cost approach,” while GE’s treasure hunts bring together cross-functional teams, said EDF.
The third barrier is the amount of “small” energy-efficient solutions because there is no single step a company can take to ensure that it is reaping all the benefits of energy efficiency, said EDF. The group recommends that the search for energy-efficiency projects should be a continuous process rather than one-of events.
A recent Verdantix study indicates that an energy-efficiency plan should include investments with a short payback period, such as installing lighting controls, in combination with larger energy efficiency projects such as voltage power optimization that deliver bigger cash and carbon savings.
Cultural resistance within companies are another barrier, which could result in executives believing that the “low hanging fruit” is either low-tech or it had been dealt with years ago.
The fifth barrier is expectations for a fast return on investment (ROI), which can discourage companies from investing in processes, products or technologies that take one to five years to recoup the costs.
Supporting the trend that companies are looking for a speedy ROI, survey respondents to Johnson Control’s recent Energy Efficiency Indicator (PDF) study indicate that the most popular energy-efficiency improvements implemented over the past 12 months are those with low capital costs and/or a rapid ROI.
As examples, 72 percent of respondents switched to energy-efficient lighting; 63 percent trained staff; 61 percent educated building occupants to save energy; 56 percent made set point adjustments; 40 percent installed occupancy or daylight sensors; and 33 percent upgraded building controls.
However, the survey of North American executives and managers also reveals that the biggest barrier to making energy-efficiency investments is limited capital. The survey also finds that 52 percent (up from 46 percent) plan to make capital investments in energy efficiency and 60 percent plan (up from 55 percent) to make operating budget expenditures in efficiency programs over the next twelve months.
The most important consideration is cost savings, according to 97 percent of respondents. Other factors impacting energy-efficiency decisions include enhanced public image (63 percent), government and utility incentives (62 percent), and reducing greenhouse gas emissions (62 percent).