Converting America’s commercial and industrial base to a higher standard of energy efficiency is not going to happen because it is “the right thing to do.” Frankly, if businesses are going to adopt new energy technologies projects are going to require both excellent ROI and virtually no impact on cash flow.
The market is full of technologies that will cut energy expenses, many by a substantial percentage. But the hurdle that stands in the way of energy projects is the upfront investment required. Companies do not want to commit to any project regardless of the ROI if it requires a cash outlay or increased bank debt.
To increase the adoption of energy efficiency technologies developers and contractor are going to have to solve not only their customer’s energy problem but also the cash flow problem. In short there is not only an energy problem there is a finance problem.
What to do?
To increase the ability of businesses to engage in energy projects, project proposals are going to have to include an appropriate financing program that will link the savings generated by the project with the project payment schedule. Some flavor of Lease Financing or a Shared Savings Agreement, that enables the customer to coordinate the monthly payment schedule with the monthly savings will help get beyond the issue of upfront costs.
Such a financing arrangement will go a long way towards helping the commercial and industrial sectors afford energy projects with good ROI’s.
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