{"id":534502,"date":"2010-04-19T13:33:26","date_gmt":"2010-04-19T17:33:26","guid":{"rendered":"http:\/\/blogs.edf.org\/innovation\/?p=1737"},"modified":"2010-04-19T13:33:26","modified_gmt":"2010-04-19T17:33:26","slug":"five-barriers-to-energy-efficiency-savings-%e2%80%93-and-how-smart-companies-can-overcome-them","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/534502","title":{"rendered":"Five barriers to energy efficiency savings \u2013 and how smart companies can overcome them"},"content":{"rendered":"

\"\"<\/a>Here\u2019s a business conundrum for you: energy efficiency saves serious money, cuts carbon pollution, requires low tech solutions, and is a known quotient, having been around since the 1970s. So why are so many companies still not taking the necessary steps to identify and eliminate these inefficiencies?<\/p>\n

\u201cWhat we learned in Econ 101 doesn\u2019t hold true when it comes to energy efficiency \u2013 the notion of perfect markets, where information flows freely and people are maximizing their value,\u201d notes Environmental Defense Fund\u2019s Gwen Ruta<\/a>. \u201cInstead, it\u2019s as if companies across the globe are walking around with a hole in their pocket with coins dribbling out nonstop.\u201d<\/p>\n

How is it that smart companies who are vigilant about monitoring the bottom line, stock price, customer satisfaction and much more let this wasteful \u201cdribbling\u201d occur? This question launched a robust discussion at a Fortune Brainstorm Green<\/a> session last week titled \u201cA Trillion Dollar Opportunity: The Hunt for Energy Efficiency.\u201d Gwen Ruta was joined on the panel by Gretchen Hancock, Project Manager for Corporate Environmental Programs at GE; Bill Weihl, Google\u2019s Green Energy Czar and Beth Trask<\/a>, Deputy Director of EDF\u2019s Innovation Exchange<\/a>. GE and Google have made huge strides around energy efficiencies in past years, with still more work to do on the horizon and still some barriers of their own to break down.<\/p>\n

So what are the main barriers to energy efficiency and how can companies try to overcome them?<\/p>\n

Barrier #1: Information overload and lack of focus.<\/span> <\/strong>There\u2019s a ton of information out there about energy efficiency – and what companies should do to reap the savings – but it\u2019s diffuse and challenging to wade through. Companies need help focusing in on the right tools and content and prioritizing where and how to begin. <\/strong>GE conducts through regular energy \u201ctreasure hunts\u201d inside a given company where selected employees come together for a jam-packed three-day working session to identify energy efficiency savings at a chosen manufacturing site. The results are impressive \u2013 each treasure hunt typically identifies opportunities to reduce energy spent by 20% – and proves that when people have the information, data and focused time to spend on this challenge, huge savings can be found.<\/p>\n

Barrier #2: Structural limitations.<\/span><\/strong> This is a big one. Companies of all sizes suffer from a siloed approach to business, where business units and operational departments are managed by separate budgets, performance timelines, product cycles and more. Finding energy efficiency savings requires employees throughout the company to share information and make trade offs in order to achieve strong results. For example, there may be an increase in cost to the R&D budget around energy efficiency efforts, but balanced by a result in savings that will show up in the facilities management budget. Most likely, these two divisions communicate rarely and have little in common \u2013 including different bosses who may not communicate well among themselves, either. Why would one take on a cost for the other to reap the savings? Google takes a \u201ctotal cost approach\u201d that is geared to precisely avoid this problem. And GE\u2019s treasure hunts bring cross-functional teams together over the three-day activity which by definition helps break down silos. According to Gretchen Hancock, the more people from different departments are involved, the better the results of these treasure hunts are.<\/p>\n

Barrier #3: The solutions are small and diffuse, not few and mighty.<\/strong><\/span> <\/strong>There is no single \u201cgee whiz\u201d step that companies can take to ensure they are reaping all the benefits of energy efficiency for their organizations. It takes time for companies to unearth where and how they can save both cash and carbon through energy efficiency. Some employees may be attracted by bigger, more appealing sustainability projects or cost savings efforts that are being considered or launched by their company. To avoid this problem, the hunt for energy efficiency savings should be institutionalized throughout companies as a continuous process, not one-off events. Energy efficiency savings should be one of the metrics that business units are evaluated on, and therefore, regularly measured and reported on.<\/p>\n

Barrier #4: Cultural resistance within companies.<\/span> <\/strong>As Gretchen Hancock noted, some companies hear the phrase energy efficiency and think, \u201cDidn\u2019t we tackle this problem in the 1970s?\u201d In companies where innovation and excellence is the expectation and the norm, executives may believe that the \u201clow hanging fruit\u201d of energy efficiency is either too low-tech to consider or has been dealt with decades ago. But the fact is that energy efficiencies exist where even super bright executives might not expect to find them. Aging equipment can cause inefficiencies, new technology enables new savings and employees need to be trained and retrained on efficiency issues and practices.<\/p>\n

Barrier #5: Those super-short ROI expectations.<\/span><\/strong> We all know how Wall Street expects speedy ROI for corporations across the board. As a result, public companies have a strong disincentive to invest in processes, products or technologies where recouping the costs may take anywhere from 1 to 5 years. This short-term thinking leads to short-term strategies, and serious money being left on the table<\/p>\n

There are other ways companies can encourage energy efficiency savings<\/a>. One way is to engage the supply chain and provide incentives to find the energy cuts in various ways. Another potentially powerful strategy is to use social influence and competition to ensure results \u2013 having different office locations \u201crace\u201d to find the biggest savings, engage local schools to help with the hunt for energy efficiency in their communities, among other things. Once we see how quickly those coins can add up, we\u2019re all likely to join in the race.<\/p>\n

What other powerful ideas can companies consider as they embark on the hunt for energy efficiency?<\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Here\u2019s a business conundrum for you: energy efficiency saves serious money, cuts carbon pollution, requires low tech solutions, and is a known quotient, having been around since the 1970s. So why are so many companies still not taking the necessary steps to identify and eliminate these inefficiencies? \u201cWhat we learned in Econ 101 doesn\u2019t hold […]<\/p>\n","protected":false},"author":4273,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-534502","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/534502","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4273"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=534502"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/534502\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=534502"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=534502"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=534502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}