Getting commercial building owners to undertake pricey energy retrofits can be a struggle. Many owners see only the price on the estimate and dismiss the long-term cost savings and benefits that the project will bring with it.

To get the maximum amount of cooperation in energy retrofitting efforts, it’s important to employ a strategy that utilizes both upfront and performance-based incentives. Here’s why:

Upfront Incentives Save Sticker Shock

Offering upfront incentives for energy retrofits, such as tax credits and grants, takes away some of the hefty price tag that’s often a barrier for many building owners.

Say a project to seal and revamp a building’s HVAC system is estimated to cost $2 million. The building owner doesn’t have that kind of cash right now, and even talk of how much money they’ll save over the life of the new HVAC system isn’t enough to convince them to finance the project.

But there’s a grant program that will cover $500,000 right off the bat, and the building owner is eligible for a tax credit in the year the project is completed that’s worth an additional $250,000. This automatically takes the price tag down to $1.25 million, something that may be much more manageable for the owner and a number that’s a lot easier to show a quick return on investment for.

But stopping with upfront incentives leaves a lot of bargaining power on the table.

Performance-Based Incentives Stretch Out the Benefits

Setting performance-based incentives to energy retrofit projects not only give building owners a reason to complete projects, but they also make it more likely they’ll undertake the most environmentally impactful projects.

If you say that the owner will receive some sort of monetary incentive if they reduce energy usage by 1% each year, the owner is incentivized to not only make the improvements, but to ensure they’re continually working the way they’re supposed to. This will make it more likely the owner will perform any necessary maintenance and potentially undertake new upgrades to improve the energy efficiency of the building.

Energy Auditing Software for All Buildings

Whether you’re looking to undertake a small audit of one building or need to check performance across a large suite of properties, EMAT Field Auditor can help. Our cloud-based software allows you to quickly and accurately gather data, take photos, and analyze results all from a smartphone or tablet. Call today for a demo!

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