How to Fund Facility Improvements With No Upfront Costs
A recent survey of executives from 145 companies from a range of sectors and locations revealed that most businesses approach energy as a cost to manage, rather than an opportunity to reduce risk and create value. Why? In some cases, this may be because company leaders don’t feel they have the expertise to make strategic improvements. Other times, it’s because the company’s funding is earmarked for other projects or priorities, rather than improvements that could fund energy efficiency upgrades.
In those cases, the challenge is clear: Without upgrades, companies may continue to run inefficient lighting, electric motors or energy management control systems. However, this can keep costs and consumption high. But completing the upgrades that have the potential to drive down costs and consumption can require significant upfront funding.
How can you escape this paradox? Let’s take a closer look.
Hurdling the Roadblock
There are many reasons to modernize equipment: boost productivity, increase quality, improve safety, consume less energy, emit less carbon — the list goes on and on.
The list of reasons for not completing those upgrades tends to be shorter. However, for most companies, it’s just as convincing. Often, the list contains just one item: capital.
Funding is a common roadblock many company leaders encounter when it comes to making upgrades that could benefit their businesses down the road. It’s not always that companies lack the funding; rather, company executives often have more immediate needs that require that capital. But because there are many benefits to be gained from those facility upgrades, is there another way?
Constellation’s Efficiency Made Easy® (EME) program allows companies to upgrade equipment at no upfront cost to the company, including:
- Electric motors and drives
- Building automation gear
- HVAC cycling technology
- Energy management control systems
This unique award-winning solution provides an opportunity to pay for these conservation measures through monthly charges that appear on a company’s competitive energy supply bill from Constellation. This type of solution empowers company leaders to use funding for more immediate expenses, while giving them the flexibility to make upgrades that can provide long-term benefits.
Capital Flexibility in Action
The town of Essex, Massachusetts faced challenges that many companies can relate to: high costs and a strict budget. The town is in a region known to have among the highest electricity rates in the lower 48 states. It was operating under a tight budget and was struggling to upgrade its government buildings to become more energy efficient — which would, in turn, help lower their energy costs.
Through Constellation’s EME program, Essex was able to implement energy efficient lighting, controls and other measures at no upfront costs. That allowed the town to stay within budget, while creating opportunities to lower energy costs in the future.
In the end, Essex immediately lowered the town’s electricity usage by 14 percent and reduced energy expenses by $19,000. Overall, the town realized 10-year positive cash flows.
You can see the parallels between the town of Essex and companies in almost any industry. Constellation’s EME program provides two distinct advantages: Your business maintains the ability to use current funding for more immediate needs, while allowing you to make upgrades to your facilities that will benefit your company in the long run.