Savings to Include in Your Financial Summary
Yesterday, we discussed the costs that should be included in your financial summary. Today, we’ll dive into the savings portion of the equation:
Utility tariff: Which utility tariff did you use to calculate the savings? I’m always surprised to see financial summaries that fail to take into consideration off-peak, on-peak, and critical-peak power pricing. In some territories (such as parts of the Pacific Northwest), this is not as relevant since utilities there may charge the same amount per kilowatt-hour regardless of the time of day or year. However, in many other regions (such as parts of California), you could see an almost twenty-to-one difference between off-peak-power pricing and critical-peak-power pricing. You have to be really careful to take into consideration when exactly the savings you are projecting will occur and what the cost per kilowatt-hour is at that particular time.
The start of the savings: When are the savings going to start for your prospect? If the implementation process is long, the savings may not start for many months – and this has an effect on the financial landscape of the project.
Interaction between the measures: If you're putting in a more efficient lighting system, that's one thing. However, what if you were to layer on lighting controls that decrease the time that those lights would be illuminated by 50%? You have to make sure that measure interactions are taken into account.
Savings: In keeping with yesterday’s blog on calculated costs, you need to consider who will be benefitting from the calculated savings. Is it the landlord? Is it the tenants? Is it both? The landlord and the tenants should both understand how the leases are written, what loads are connected to which meters, who pays for those meters, and ultimately, how the savings will be allocated after the retrofit.
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