Energy Professionals Say Lack of Funding Means Their Energy-Efficiency Proposals Are Rejected, Yet Few Consider Financing Options
Survey by Noesis Energy reveals that companies that offer third-party financing need to better educate energy managers and consultants on their products. Professionals say that projected energy savings are key for both securing approval and demonstrating ROI of energy-efficiency investments.
AUSTIN, Texas, Aug. 21, 2013 /PRNewswire-iReach/ -- According to a recent survey conducted by Noesis Energy, the inability to get funding and uncertainty about the savings estimates are the primary reasons why energy-efficiency projects are not getting approved. Noesis recently surveyed 476 energy managers and energy consultants in the commercial and industrial (C&I) sector to better understand which factors determine whether viable energy projects (i.e. projects that clear internal hurdle rates) get the green light.
Noesis Energy, whose energy measurement and savings website is used by more than 12,000 C&I energy professionals, has observed an insatiable appetite for information about efficiency financing—from oversubscribed webinars on the topic to hundreds of inquiries on the Noesis platform from professionals seeking financing for particular projects. To better understand the market and requirements for efficiency finance, Noesis Energy launched its first annual Energy Project Survey in June of this year.
As part of the survey, Noesis looked at the number of projects proposed, their average size, approval success rate, reasons for not getting approval, the role of financing options, and importance of tracking energy savings to justify and reinforce the investments. Professionals surveyed included corporate managers (such as energy managers, facility managers and sustainability directors), external consultants and auditors, and manufacturers and resellers of energy-efficiency products.
"We see a lot of interest in efficiency financing among users of the Noesis platform, yet not much is known about why some projects aimed at saving energy never get past the proposal stage," said Scott Harmon, CEO of Noesis Energy. "The findings of this survey highlight the perspectives and challenges of professionals in the commercial and industrial sector, so Noesis can determine how to help them get more energy efficiency projects underway."
- More than 50 percent of consultants propose 11 or more energy projects per year, with 32 percent pitching 25 or more projects. This compares with 75 percent of energy managers, who propose less than 10 projects per year.
- Nearly half of the energy projects proposed are valued between $50,000 and $250,000. Taken in conjunction with the number of projects managers and consultants report, these energy professionals are pitching millions of dollars on energy-efficiency expenditures.
- Who gets their projects approved? Energy managers have good success rates, with 36 percent of them securing approval for half or more of their projects, and 75 percent getting approval of at least one in four projects. Consultants do not fare so well, even though they are originating more proposals: half of the consultants surveyed report less than one in four of their projects get the green light.
- Why are projects not approved? More than half the time, "Not budgeted" is the reason these projects do not get internal approval. One-quarter of the projects are derailed by a "lack of certainty" of their estimated savings.
- With funding emerging as the top reason for project rejection, Noesis asked whether third-party financing, such as leases or energy savings agreements (ESAs), was included in the proposal. Only 10 percent of consultants include financing all of the time, while 43 percent never include it. Meanwhile, 60 percent of energy managers do not include financing in their proposals.
- Why not include financing? 56 percent of energy managers say they don't need it because they aim to fund projects internally. For energy consultants, 68 percent said that they don't know enough about financing options, or don't have the time to research and find them.
- Tracking energy performance is becoming more commonplace. The majority of those surveyed require that savings be tracked at least some of the time, with 65 percent of energy managers requiring it most or all of the time.
"This study confirms many of the same themes we hear from our network of Investor Confidence Project (ICP) Allies. Access to financial resources and partners who can help ensure performance is critical to improving confidence in energy savings projections. Limited access to either of these resources poses significant barriers to completing energy efficiency projects," said Matt Golden, senior energy finance consultant at Environmental Defense Fund. "The good news for clean energy project developers is that we also hear from a wealth of investors that they are actively seeking investment quality projects. Success results from connecting the dots, and energy performance protocols and standards can do just that."
To close the gap between projects in need of funding and appropriate financing, Noesis recently announced that it is working with leading energy-efficiency financing firms to jump-start spending on critical energy-saving investments by commercial and industrial businesses. To learn how to participate, visit NoesisEnergy.com.
About Noesis Energy
Noesis Energy puts businesses in control of their energy management costs. By combining big data services, energy analytics and industry expertise, our free and premium data services help energy professionals track energy performance and identify opportunities to reduce usage and costs. Noesis Energy is backed by Black Coral Capital and Austin Ventures, and maintains offices in Austin, Texas and Cambridge, Ontario, Canada. For more information, visit www.noesisenergy.com and follow @noesisenergy. Use our site to find incentives at incentives.noesisenergy.com.
Media Contact: Tim Cox, Noesis Energy, 650-369-7784, firstname.lastname@example.org
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SOURCE Noesis Energy
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