Energy efficiency paradigm shift

Energy efficiency looks like restructuring

investCompanies invest to increase their revenues, to grow. Sometimes they invest to reduce production costs, into more modern machine tools for instance. Generally, such investments aim to increase production capacity at the same time, in order to get more revenues.

Energy efficiency does not match this business model. It corresponds to investment to reduce overhead costs in particular. It can also reduce production costs, when energy consumption is a main cost factor.

Reducing overhead costs… does it remind you of something? Yes! Restructuring a company, thanks to eliminating and scaling back production, employee layoffs, and salary and benefit reductions, for instance.

Wrong message to investors

reduce_billTherefore, on the balance-sheet, energy efficiency does not show a good image of the company. Communication efforts from management have to be deployed to explain to shareholders the interest of energy efficiency and its advantages over other possible investments. But, as shareholders want more, not less, they generally prefer growth. Energy efficiency then competes with difficulty against other type of investments.

The word to spread to shareholders

Spread_wordOnce an investment in Energy Efficiency is done, energy costs directly decrease without harming incomes and results, thus enabling more financial resources to be made available every year, for many years to come. Energy Efficiency is a mark of confidence in the future, providing a good basis for sustainable growth.

Return on investment is higher for the companies which are the worst in energy efficiency. With high specific consumption, it is easy to significantly reduce energy consumption with simple and cheap solutions. Oddly, it is then economically less interesting to invest in Energy Efficiency in environmentally conscious companies than in energy guzzler ones. It is then normally easier to convince the later. Then, just do it!

Gauthier Dupont
Dupont Energy Consulting GmbH