Selling Energy Efficiency Projects

1. Selling Energy Efficiency Projects Michael Taylor, KEMA

2. Energy Efficiency vs Sustainability • Energy efficiency, the key and foundation to energy sustainability, “is using less energy to provide the same level of energy service.” • “We’re in the midst of another megatrend like technology explosion of 30 years ago. This time the issue is sustainability.” Dan Esty, professor and director of the Center for Environmental Law and Policy at Yale University • Sustainability is a new way of thinking about an age-old concern: ensuring that our children and grandchildren inherit a tomorrow that is at least as good as today, preferably better. US Environmental Protection Agency.

3. EIA Reports Show Importance of Energy Efficiency • Since 1980, U.S. energy use per capita (energy intensity) has remained relatively stable and is forecast to decline through 2030. • Improvements in energy efficiency from higher CAFE standards and more stringent lighting standards contribute to the decline in energy use per capita. • Energy intensity is forecast to decline in all the end-use sectors (base case scenario), as a result of structural changes and efficiency improvements.

4. Allure of Renewable Energy • Solar is a visible, green action • Doesn’t make sense without efficiency • Efficiency reduces demand, renewable provides new supply • Energy efficiency (EE) + renewable energy (RE) = sustainable energy • “If energy use grows too fast, renewable energy development will chase a receding target.” (Eckhardt, Eldridge, Frederick, Prindle, May 2007)

5. Selling to Various Personality Types • If you are able to quickly identify the personality style of the customer, you will know the "hows" and "whys" of what to say to meet their needs. • Once they feel that you truly understand them and feel an emotional connection, they will come up with the logical reasons to buy from you.

6. Identifying Buyer Personality Types • Dominant Driver: Goal oriented, leader, results driven • Ego/Expressive: Thinks “self” -- how something affects them or organization • Complacent/Amiable : Values friendship, must be honest with them • Stable/Analytic: Feeds off numbers, statistics, specifications

7. Look around your client’s office: What’s in their office is important to them.

8. Personality Types: Dominant Driver • They thrive on the thrill of the challenge and the internal motivation to succeed. • Drivers are practical folks who focus on getting results. • They can do a lot in a very short time. • They usually talk fast and are direct and to the point. • Often viewed as decisive, direct and pragmatic.

9. Personality Types: Ego Expressive • Very outgoing and enthusiastic, with a high energy level. • They are also great idea generators, but usually do not have the ability to see the idea through to completion. • They enjoy helping others and are particularly fond of socializing. • They are usually slow to reach a decision. • Often thought of as “a talker,” overly dramatic, impulsive, and manipulative.

10. Personality Types: Complacent Amiable • They are dependable, loyal and easygoing. • They like things that are non-threatening and friendly. • They hate dealing with impersonal details and cold hard facts. • They are usually quick to reach a decision. • Often described as “a warm person” and sensitive to the feelings of others, but at the same time wishy-washy.

11. Personality Types: Stable Analytic • They are known for being systematic, well organized and deliberate. • These individuals appreciate facts and information presented in a logical manner as documentation of truth. • They enjoy organization and completion of detailed tasks. • Others may see them at times as being too cautious, overly structured, someone who does things too much “by the book.”

12. Know Your Product or ServicesKnow Your Client Knowledge builds confidence, confidence builds enthusiasm, and enthusiasm sells!

13. Be Where Your Customers AreKeep Up on Events and Study Your Client’s Business • ASHRAE (American Society of Heating, Refrigeration, and Air-Conditioning) • IES (Illuminating Engineering Society) • IFMA (International Facility Management Association) • BOMA (Building Owners and Managers Association ) • Local Chambers of Commerce • Read! Read! Read! • Crain’s Chicago Business • Tons of industry journals available: every industry offers a journal you should subscribe to • Real Estate Chicago magazine Who are your client’s clients?

14. “People aren’t interested in you. They’re interested in themselves” – Dale Carnegie 1. Am I defining my customers the way they think about themselves? 2. Am I looking at life from their point of view? 3. Am I thinking about ways to bring my services to them, rather then expecting them to come to me?

15. Using What You Know “So when I went fishing, I didn’t think about what I wanted. I thought about what they wanted. I didn’t bait the hook with strawberries and cream. Rather I dangled a worm or a grasshopper in front of the fish and said: “Wouldn’t you like to have some of that?” - Dale Carnegie

16. A Look at the Numbers: A Lighting Example • Lighting system upgrade: $35,000.00 Less Smart Ideas incentive: ( 7,500.00) Net investment: $27,500.00 • Monthly electric bill: $10,000.00 Savings achieved by upgrade: ( 2,000.00) Net electricity bill with upgrade: $ 8,000.00 • Return on investment analysis: $2000.00 x 18 months of savings: $36,000.00 $1527.77 x 18 monthly payments: 27,500.00 Net savings over investment period: $ 8,500.00 $472.23 savings x 18 months

17. The Results • The customer gets a new lighting system with better performance and lower maintenance costs. • The customer covers the monthly payments from the savings. • The energy upgrade creates positive cash flow because the savings of $2,000/month continue for the full life of the lighting measure!

18. How the Savings Continue • At a measure life of five years, the monthly utility bill savings that continue from month 19 to month 60 represent an additional $84,000: $2,000 savings x 42 months = $84,000 16 hours a day x 7 days/week x 52 weeks = 5,824 hours/annually 5,824/year x 5 years = 29,120 hours (average life for a 4-ft T8 lamp) • A $27,500.00 investment made today pays for itself from savings in 18 months and yields an additional $84,000 in savings over the life of the system.

19. The Bottom Line? • Total savings over 60 months represents $92,500: $472.33 x 18 months + ($2,000 x 42 months) = $92,500 total savings • Even if electricity costs increased at 5% annually, the customer still realizes nearly $70,000 in savings over this operating period.

20. Profit Dollar Protection Has Just Occurred! • The $92,500 represents pure profit for the client. • How many widgets do they have to sell to achieve $92,500 in profit, with no affiliated costs of doing business? • Lowering operating costs in this way brings the $92,500 directly to the company’s bottom line over the life of the energy measure. • There is no better way to make a company owner smile. Profit is realized from making the right decision about energy efficiency without having to make or sell any more product!

21. Lighting Example and the Cost of Delay • Now assume this client does NOT go with the lighting system upgrade. • Missed savings potential over the 1.5 years is $36,000 in added electric bill costs, assuming no utility cost increases. $2,000 lost savings x 18 months = $36,000 • Assume the lighting system upgrade will cost an additional 10% more to purchase in 1.5 years. This represents an additional $3,500 in added purchase costs by delaying this purchase. • By NOT proceeding with the cost-justifiable energy efficiency option, this client in effect is adding a monthly cost of $2,194 to their electric bill $39,500 divided by 18 months = $2194/month Maintaining status quo and not implementing robust efficiency options in a business is a bad decision with significant savings consequences!

22. Why Upgrade Now? Current energy cost – Proposed energy cost 365 = Daily cost of waiting

23. Asset Valuation • Building energy performance labeling, benchmarking, and disclosure laws that require a building owner to disclose the building’s energy use and benchmark it against a relevant peer group on a periodic basis (annually) or at the time of sale, lease, or financing. • Washington D. C. • Washington State • Austin, Texas, • New York City • Seattle Washington • San Francisco • (Illinois in committee under consideration to report in 2012)

24. Sell, Sell, Sell!

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26. ComEdSmartIdeas@KEMA.com Program questions (888) 806-2273 Fax: 1-630-480-3436 Outreach Team 630-480-3434 www.ComEd.com/bizincentives Program information Application forms Policy and Procedures Manual For More Information

27. Thank you!