Archive for January, 2011

Continuing with energy strategy

January 25, 2011

So one day you get the idea that you need to figure out how you are doing on energy usage. “I have a large car dealership / small industrial building / large manufacturing plant / apartment community / retail store / – you get the picture.
Your energy bills have always been high but you have told yourself it’s just a cost of doing business. Now you have a nagging feeling that you are giving money to the energy companies that you could be putting into your kids college education fund. So how do you even begin to evaluate the bills for your business?
Will you call a solar company to evaluate installing their solar panels on your building?
Will you call an insulation company to evaluate the efficiency of your insulation?
How about a door company? Are the doors in your building energy efficient?
Ground water heat pump company? Can you even use that in a downtown building?
There is a laundry list of methods and products to conserve, and even create, energy.
You ask yourself, what will I get in return for spending my hard-earned dollars?
What if I spend X amount of dollars on solar panels, doors, insulation, heat pumps…?
What if I could have invested in just one of them and received a 20% return on my investment and not the others which would only return 2-5%.
How do I know that they are out for my best interests and not their own, by selling me on their products and their services?
There is one way to feel easy that you are getting the best advice. Call a company that has no dog in the fight. A company that will say, Brand A out performs Brand D; invest in this and receive 33% IRR and not in this, as it is already pretty efficient and spending the money will only get you a 2% IRR.
A company that will only ask for 15 minutes with you on the phone in order to determine whether or not you should set a meeting to discuss it further.
A company that will show you a list all that should be considered for your building(s), the cost of installation, the payback in months or years and the Internal Rate of Return on those investments.
Would all of that be worth a phone call?
GreenPoint Partners was hired by the owner of a modest-sized manufacturing company to do an energy efficiency evaluation of his plant. He followed the suggestion of having his building manager accompany  him and the GreenPoint Partners evaluator on the tour. Before the evaluation was even finished the owner had his manager go to work on one of the recommendations; one that was simple, quick and seemingly obvious; but nobody had ever thought of doing it. That small change saved the owner a lot of energy, and that translated to a lot of money saved.

That little story paints a nice picture of what GreenPoint Partners can do for you but it should not be considered as the full report. There were many recommendations made to the owner and they all had good returns on investment.

If all of this makes sense to you go to the website for GreenPoint Partners, above. I am affiliated with them but I would not have affiliated with them if I was not comfortable with their ethics and abilities.

Increase your net operating income…

January 4, 2011

…without raising rents.

The world is fast becoming aware of energy savings; especially in the United States where even the Pentagon has put out a mandate that all branches of the service cut energy usage. Others taking a hard look at energy efficiency are not necessarily the ones who first come to mind; lenders, communities, and of course end users, be they owners or tenants – especially tenants with long term leases. Your customers may also be judging you based on their sense of social responsibility. Any edge you can gain over the competition is a good one.

So where do you begin? My suggestion is to hire a professional firm, with no product to sell, that can give you a thorough audit and written report showing itemized recommendations, the estimate of cost for each renovation, and the estimated payback time. That requires a company with a team of experts in various disciplines; such as solar, energy efficiency, engineering, incentives, alternative heating and cooling, finance, competing products…and the list goes on.

Finally, the report should contain the IRR (internal rate of return) for each of their recommendations or findings. That way you can say, okay, I like this one that gives me a 20% IRR, but this one with a 3% IRR is not worth the disruption. Further, they can suggest strategies such as picking the one with the greatest rate of return and using that savings to fund the other recommendations.

Take a look at this company’s web site. They are a fine example of what I am talking about and since I personally know some of the founders and key personnel it is one company that I can highly recommend. They will not take you further down the road if they cannot show a 10% IRR, overall.