New Research Reveals Energy Efficiency is Still Important

The third annual Energy Efficiency Indicator (EEI) survey, commissioned by Johnson Controls, targeted professionals responsible for energy management and revealed that energy efficiency has never been more important. It also showed that barriers to investing in energy efficiency include limited funding and uncertainty about future energy prices, government incentives, and energy and climate legislation.

“These findings highlight the fact that business leaders across the United States are increasingly aware of the need for energy efficiency and its potential to reduce operating costs while cutting greenhouse gas emissions,” said C. David Myers, president of Johnson Controls Building Efficiency division. “Economic and regulatory uncertainty, however, are inhibiting organizations from investing in proactive measures.”

According to the EEI results, 71 percent of business leaders are paying more attention to energy efficiency than they were last year, and 58 percent said that energy management was extremely important at their organization. Energy efficiency also rated as the top carbon reduction strategy in the buildings of 45 percent of respondent organizations that are making public carbon commitments. Efficiency is also an important aspect of organizations’ new construction projects, with 38 percent of respondents seeking green building certification and 45 percent planning to incorporate green elements, but not certify their facilities.

Don Young, vice president of communications at the International Facility Management Association (IFMA), which partnered with Johnson Controls to conduct the survey of more than 1,400 North American executives responsible for the managing, reviewing, or monitoring energy use within their organizations, said that “this research recognizes the important role workplace professionals play in controlling operational costs related to energy consumption and making strategic capital investments in high-performing building technologies.”

The study also looked at participants’ views on on-site renewable energy technologies: Business leaders are considering a range of technologies, including wind, solar thermal, solar electric, and geothermal energy sources.

However, the survey results showed that currently, limited capital is causing a decline in investments in energy efficiency and sustainable practices, with a likely 10 percent decrease from last year in the use of facility capital budget to fund energy efficiency projects. Additionally, it showed a 6 percent decrease in the number of respondents planning to make investments using their operational budgets. Twenty-one percent of respondents also cited unattractive paybacks periods as another barrier to investing in energy efficiency, with nearly 50 percent of executives overseeing energy efficiency investments expecting a payback period of fewer than three years.

But because respondents so greatly emphasized the importance of energy efficiency in their building operations, it is likely the hesitation to invest will change with time. “Indications are that as the economy recovers, we will see greater investments in energy reduction and sustainable initiatives,” said Young.

There is, however, a certain amount of market uncertainty about carbon policy, incentives, and energy prices that are also leading to this hesitation to invest in energy efficiency. EEI results showed that 44 percent of business leaders say that incentives are extremely important as they make decisions on energy efficiency, an increase from 38 percent last year, which indicates that incentives from utilities or government will drive further investment. The study also revealed that pending legislation is likely to jump-start further investment in energy efficiency initiatives, as 85 percent of respondents said that they thought legislation mandating energy efficiency and/or carbon reduction is likely within the next two years.

However, there was much less certainty about the future of energy prices. Clay Nesler, vice president of global energy and sustainability at Johnson Controls, said, “We see a wide distribution of views about what will happen to energy prices—ranging from a 100 percent increase to a 60 percent decrease. This uncertainty appears to be another reason business leaders are holding back on investments.”

For more information about the EEI findings, please visit www.johnsoncontrols.com.