Energy Efficiency: Transaction vs. Consultative Approach

Tell me if this scenario sounds familiar. You’ve been tasked with managing the energy portfolio for a building. Your company may be a manufacturer, hospital, school or commercial real estate property. Regardless of your specific operation, the common thread is that you likely have a very small operating budget, minimal staff, and host of ongoing issues that land on your desk.

You want to be proactive; planning for future issues before they arise, but the resources you are given forces you to be reactive.

As I meet with clients in varying industries, I continually hear this same narrative. To add insult to injury, many of these managers express the challenge of juggling additional responsibilities outside their defined position. Obviously, this further strains their budget, time, and personnel.

Building Construction

This struggle sets the stage for two opposed energy management methods, transaction versus consultative.

A transaction sale can be categorized by solutions that are specific to equipment failure or end of life. You would see this for example with an old boiler or HVAC unit. After decades of operation, they simply stop working. This requires the consumer to engage in a point of sale transaction.

Usually, the replacement comes with a premium cost because of the urgency. In many cases, this could easily erase whatever capital budget you had planned to use for energy efficient upgrades.

Contrary to a reactive transaction is a more proactive consultative approach. We can simplify this with two specific examples.

In the first example, your energy advisor can help you address the unique pain points your facility must deal with. A common one I often come across are issues with facility lighting. It may surprise you to learn that with older lighting technology, you will experience over time lumen degradation. This is a fancy way to say your fixtures aren’t emitting as brightly today as they did when first installed.

(A simple solution for this is to install an LED fixture. Prices for LED solutions have come down dramatically and have become more economical. The life of an LED fixtures last substantively longer than outmoded CFL solutions.)

The second example is the purest form of energy consultation. In this instance, your energy advisor would work alongside you to draft a comprehensive energy management plan. This includes identifying all existing pain points, categorizing remaining equipment life, and producing an analysis on potential retrofit costs and payback periods. This latter portion should factor available incentives and rebates as well as creative or alternative financing mechanisms.

This enables you to prepare, well into the future, for all contingencies and eventualities. You can include capital improvement projects in annual budgets, factor in the energy savings, and ultimately avoid untimely failures that can dramatically disrupt production.

For many dealing with complex energy issues, transaction selling has become the norm. Emerging resources in the market can help you better plan, prepare and manage energy portfolios. Leveraging an advisor can enable you to develop a more structured approach and avoid the roller coaster that has been your energy management strategy to date.

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