A Business

Case for an
Energy
Management
Solution:
Empowering the
Decision-Makers

Managing a facilitys operations is demanding work.

The energy management space may seem to oer conicting messages at times

with many dierent vendors claiming to deliver similar benets. Fortunately, there

are solutions available that can signicantly lessen the challenges faced by

facilities managers.
There are many types of energy
management systems and many of
them have been around for quite a
while; however, there are new
innovations that deserve exploration
in the eld. These innovations make
device-level energy management
systems a business necessity for
companies that are committed to
energy and operational eciency,
cost reductions and sustainability.
Sometimes enterprise-level
decision-making is not made by
those end users who are responsible
for the infrastructure and systems
that are deployed. The decision-
makers have dierent concerns.
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The decision-makers need data that
provides a way to measure ROI and
enable them to understand the real
nancial opportunities only available
through energy eciency. This way,
they can properly budget, plan, and
distinctly prove their sustainability,
eciency, and cost savings.
As an end-user, wouldnt you
like a way to convince
decision makers to adopt the
solutions that can make the
job easier and ultimately
show better results?
Site-Wide Visibility with Device Level EMS

Increase Energy Eciency

Pinpoint energy waste, identify real-time saving opportunities,
and reduce costs.

Reduce Operational Cost

Improve operational eciencies with improved production
performance and reduce total cost of operations with
granular visibility.

Comply with Regulations

Report accurate data to help comply with energy related
regulations, green initiatives and industry standards.

Optimize Demand Charge

Proactively manage demand charge strategy on the site level -
factoring seasonal, rate, and operational changes.

Prevent Device Failure

Avoid downtime while ensuring eciency and eectiveness by
optimizing preventative and condition-based maintenance
needs.

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Often, we nd that the decision-makers need data about the business
case for energy management in order to approve the project.
When the business case is made, decision-makers will be able to
understand:

How energy management aligns with corporate

priorities

The business costs associated with a device-level

energy management solution

Funding sources for energy management

The ROI of an energy management project

Once they are presented with information that addresses these four
concerns, we have found that corporate decision-makers accept the many
advantages of device-level energy management solutions and expedite
the progress toward implementation.

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 How Device Level Energy Management
Advances Corporate Priorities

Though every company has dierent business priorities, universally,

corporate decision-makers readily take on projects that advance the
corporate agenda.
There is no better way to convince the decision maker than to show
how device level energy management can help achieve goals and
often complement existing systems already in place.
To build a business case for energy management, the rst step is to
understand what the companys priorities are. Only then can the case be
made for energy management as an enabler and facilitator of those
goals.
The Department of Resources, Energy and Tourism commissioned a
report of C-level executives of organizations across a range of industries
to gain their perspectives on the drivers for energy eciency.

The factors that play a role in the

business's eorts to improve
energy eciency
68%
70% 61%
60% 53% 51%
46%
50% 41%
36%
40%
30% 20% 16%
20% 9%
10%
0%

http://eex.gov.au/energy-management/the-business-case-and-beyond/developing-your-business-case-six-strategies/link-your-project-to-current-business-
priorities/

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 DECISION-MAKERS NEED DATA ABOUT THE BUSINESS
CASE FOR ENERGY MANAGEMENT IN ORDER TO APPROVE
THE PROJECT

The Verdanix The State of Global Corporate Energy Management

explored similar questions.
These ndings point to the fact that overall, businesses will invest in
energy management products that save them money and make their
businesses run better.
Also, there may be other priorities (regulations and brand reputation, for
example) that, when addressed with the decision-makers, can foster
further support of the project.
Take action to uncover and understand the managements priorities, and
then seek out ways that energy management can aid them in achieving
their goals.

http://www.verdantix.com/index.cfm/papers/Products.Details/product_id/577/the-state-of-global-corporate-energy-management/-

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The Costs of Device-level Energy Management

Executive decision-makers often nd themselves in a YOUR PROJECTS APPROVAL

DEPENDS NOT ONLY ON THE
conundrum as it relates to implementing a device-level
ACTUAL NUMERICAL COST,
energy management system. While they can see the BUT ALSO ON THE WAY YOU
long term nancial benets of such a system, they are PRESENT THE ALTERNATIVES.

concerned with the up-front capital cost investment or

EXECUTIVES MAY NOT BE AS
contemplate the ecacy of an existing solution that is
EXCITED ABOUT OPTIMIZING
already in place. MAINTENANCE
The cost of implementation varies according to the SCHEDULES . . . BUT THEY
WILL DEFINITELY GET
number of devices, systems, and sites that need to be
EXCITED ABOUT PROJECTS
monitored. We can provide an actual quote based on WITH HIGH RETURNS.
your specic needs.

It will help the decision maker to have actual numbers based on your
particular circumstance.
However, your projects approval depends not only on the actual numerical
cost, but also on the way you present the alternatives. This is a little bit
trickier because while the cost of a new system is a concrete number that is
known ahead of time, the cost of alternatives often isnt.
Obtain the information you need to estimate the costs of not monitoring and
managing energy in your enterprise.

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Funding Energy Management Projects
Once the decision-makers are on
board with energy managements
eect on the corporate agenda and
understand the actual costs involved,
as well as the opportunity costs of not
managing energy, they may still face
a funding issue.
Viewed from their perspective,
decision-makers still need to nd
the funds to pay for the
implementation.
In presenting the business case, oer
these funding alternatives:
1. Opex: The operational expenditure
budget line item may be relevant
since energy management is an
ongoing operating expense.
2. Capex: The capital expenditure
budget line item may be used for
the equipment part of the cost of
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implementing an energy
management system.
3. Business investment funds:
Investments in infrastructure that
fuels growth can be allocated to
this line item.
4. Rebates and incentives: By
implementing energy eciency
solutions, your company may
qualify for various rebates and
incentives from the national, state,
and local governments and utilities
where business operations are
located.
5. Grants and loans: Programs are
available that provide grants and
low-interest loans (like the UKs
Energy Saving Trust and
ESCO and PACE in the US).
The Cost of Not Managing Energy
Line items to present to the decision maker

O-hours consumption
Inecient energy proles
Unmonitored BMS overrides
Scheduled preventative maintenance
Repair of failed devices
Unnecessary retrots
Forfeited incentives and rebates
Insucient production rates and quality
Decient overall equipment eectiveness (OEE) items
Lack of visibility into critical systems

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Return on Investment

Possibly the most important factor to obtaining approval for your energy
management project is the ROI you can present to your decision makers.
Keep in mind that executives may not be as excited about optimizing maintenance
schedules or improving environmental impact reports as you are, but they will
denitely get excited about projects with high returns.

Taking a granular approach and focusing energy eciency on devices

instead of full buildings or select oors and zones results in greater ROI in a
much shorter payback period.

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Arm Your Decision-makers with Charts, Stats and Figures
About Investment Returns
There are many dierent levels of energy management. The rst levels,
the enterprise and building levels, are relatively easy to optimize. We all
have a meter and get a bill, but there is an inherent problem.
The utility bill gives you limited data to work with, which is certainly not
enough to pinpoint maintenance issues or to help your enterprise operate
better. Also, the data is typically 45 days old and it doesnt tell you how to x
demand and power factor charges. Utility Bill Processing is the shotgun
approach to energy management.
The next level of energy management is called submetering. Some
sustainable-leaning organizations use submetering to assist maintenance on
a category level. For example, many large retail chains only submeter their
main power and its refrigeration systems. At the main, the information can
guide them to problems with power factor, and it can help them better
understand when their utility is marking their time of greatest demand.
As for refrigeration, with submetering, a retail chain can inform their
maintenance crews when refrigeration is starting to work improperly but
cant pinpoint the cause.
Because traditional submetering is expensive to buy, install and maintain,
the submeters are rarely installed at the asset level, which is the best
level of energy management.
When you submeter every motor, compressor, chiller and electronic device
that is critical to the smooth operation of your business, you get data-
backed insights that improve your operations and increase your prots.

Imagine measuring the energy

prole of every asset that really
mattered in your operation.

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Maintenance
Preventative maintenance is often a
signicant line item for businesses. Maintenance Cost per
And while preventative maintenance Horsepower for General
is certainly less expensive than Industrial RotaAng
corrective maintenance, there is a far Machinery
better way.
PREDICTIVE
By monitoring the energy proles of PREVENTATIVE
equipment, we are able to transition CORRECTIVE (REACTIVE)
from preventative maintenance to 0 2 4 6 8 10 12

predictive maintenance. We do so Dollars/Horsepower/Year

by using the energy data to predict

equipment failures and service only
the devices that require service.
According to Doug Plucknette, a How much is
Reliability Centered Maintenance
(RCM) expert, The key to RCM was
preventative
abandoning the philosophy of
maintenance costing
preserve-equipment in favor of
preserve-function. Simply put, your company?
equipment became the means to an
end, not the end in itself.

With predictive maintenance, companies are alerted to impending equipment

failure. By eliminating unnecessary scheduled preventative maintenance
performed on equipment that is not in need of service, companies reduce the
maintenance expense and eliminate resource-intensive down time.

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The Business Case Summed Up
For corporate decision-makers to buy into an energy management
solution implementation, they need to be presented with a solid
business case. That is, they need a distinct understanding of how such a
project aligns with their goals, well-dened business costs analysis,
exploration of funding sources, and evident ROI.

Once all of these are established and understood, decision makers may
also be interested in some of the ancillary benets of energy management:
superior reputation and brand loyalty from sustainability initiatives,
employee engagement and commitment, media and analyst interest in
green enterprises, and maybe even a personal sense of accomplishment
for reducing the companys carbon footprint.

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 Panoramic Power, the leading provider of device level energy
management solutions, enables businesses to optimize their energy
consumption and improve system level performance and facility
operations. Using an aordable real-time wireless sensor technology and
a cloud-base analytics solution, companies across a wide range of
industries gain critical and continuous insights into their energy usage and
are able to optimize operations, processes and maintenance resources.
To learn more about energy management solutions and corporate
sustainability, visit www.panpwr.com or subscribe to our blog at
www.panpwr.com/blog

Panoramic Power
44 W. 28th Street; 8th Floor New York, NY, 10001
Phone: +1-646-794-4240
Mail: info@panpwr.com