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16 May 2011 03:05:22

Lack of funding: main barrier for energy efficiency improvements

New Energy Efficiency Indicator survey for Europe shows companies place increasing priority on energy management, but they struggle with funding.

In a context of rising energy costs and expected government mandates on energy efficiency, executives in Europe are placing a high priority on energy management in buildings, but struggling with funding, according to a survey.

This is the conclusion of Johnson Controls’ fifth annual Energy Efficiency Indicator survey for Europe that reveals the main drivers and barriers related to energy efficiency improvements that companies and institutions in six countries are facing. The Energy Efficiency Indicator survey for Europe was produced after interviewing 857 private and public sector executives from France, Germany, Italy, Poland, Spain and the United Kingdom.

The executives said that the main factors driving energy efficiency efforts are cost savings, government discounts and energy security. Last year, apart from cost savings, the other two main influencers were carbon reductions and existing government policies. More executives are now aware of rebates and other external funding opportunities, which will be vital for companies looking at HVAC, window and other improvements.

The Johnson Controls report says "Most managers use internal capital or operating budgets to pay for improvements. However, budgets are being cut across Europe, pointing to a bottleneck in funding for energy efficiency improvements. Cost-neutral and cash-flow-positive instruments to realize energy efficiency opportunities either are not available or are not being used by managers to the same extent as their own budgets. The result is a conundrum in which organizations may want to pursue energy efficiency and meet their reduction targets, but are stalled as they look to shrinking budgets as the only means to pay for projects."

Energy management becomes vital with rising energy prices

Organizations that received funding from utilities, financial institutions and other outside sources were more likely to introduce energy efficiency improvements with heating, ventilation, air conditioning and control equipment than companies relying only on internal budgets (55%, compared to 47%). And, while 36% of organizations that sought external funding have made roof, insulation, window, weather stripping and other building enclosure improvements, only 19% of those that use their own budgets made similar improvements.

Organizations that were able to get external funding were also more likely to take up on-site renewable energy projects and install smart building technologies focuses on real-time energy monitoring.

Also, more executives this year (66%) than last (55%) said that energy management is either extremely or very important to their organizations, with a large majority of the executives surveyed thinking that energy prices will go up over the next 12 months (79%), and 78% of the executives saying that governments will create energy efficiency or carbon reduction mandates in the next two years.

The Johnson Controls report showed lesser-cited barriers to energy efficiency, including uncertainty about savings or performance from projects, lack of technical expertise on evaluating project s and lack of awareness about opportunities.

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