Businesses like efficiency, but hold back

By Elisa Wood

May 7, 2009

“It’s the economy, stupid,” the famous line of political strategist James Carville, seems even more relevant now than when he uttered it during Clinton’s 1992 campaign. A recent survey on executives’ attitudes shows that energy efficiency hasn’t escaped the shadow of recession, despite strong support for the resource.

Johnson Controls and the International Facility Management Association asked 1,400 business executives in April what they think of energy efficiency. They like it. A lot.

Seventy one percent said they pay more attention to energy efficiency than they did a year ago; 51 percent see energy management as extremely or very important; 45 percent plan to use efficiency as their top strategy to reduce carbon dioxide emissions.

Yet, the survey also found businesses holding back on making investments. The problem? “Economic and regulatory uncertainty,” says C. David Myers, president of Johnson Controls Building Efficiency division, in a May 6 news release.

Energy prices have dropped significantly over the last year. But businesses apparently do not feel confident enough about the future to prepare to take the savings and invest it in energy efficiency — in preparation for the next jump in energy prices. In fact, the survey revealed a likely 10 percent decrease from last year in the use of facility capital budgets to fund energy efficiency projects. It also showed a six percent drop in the number of businesses planning to use their operation budgets to invest in efficiency.

Not surprising, nearly half of those interviewed cited lack of capital as a barrier to pursuing efficiency. However, if Washington plays it right, efficiency investment should rebound once the economy does. Business leaders believe incentives from utilities or government will drive the investment, according to the survey. Eighty-five percent expect either legislation mandating energy efficiency or carbon reduction within two years.

Businesses are understandably hesitant to risk capital until they know the specifics about an energy efficiency portfolio standard and carbon requirements now under debate in Congress. Perhaps the slogan for this point in history should be: “It’s about the economy, stupid…and Washington.”

More information on the survey is available at: http://www.johnsoncontrols.com/.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.