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Unveiling the True Cost of Energy Retrofits

With billion-dollar energy budgets and rising electricity and gas rates, energy efficiency projects and renewable installations are becoming top of mind for energy, facility, and real estate leaders. Energy efficiency projects can be a large undertaking for organizations with one building – let alone hundreds ­­– and often prove to be a massive burden on internal resources and teams. This means understanding the true cost of ownership associated with these projects is essential to make informed decisions and maximize return on investment.

Navigating a Complex Process... For Every Site

Below are high-level stages, and potential steps at each stage, of a large-scale energy efficiency or renewable equipment installation. The blue action icons highlight some of the challenges that organizations face at each stage. In the following sections, we'll expand on some of these steps to highlight savings opportunities.

The main stages of a program are: Plan, Fund, Implement, Measure, verify, & report, and Maintain.

Financing Incentive Collection & Rebating Collection:

One of the biggest deterrents companies face for a decarbonization project is allocating budgeted capital given competing core investments. While there are several financing options for these types of projects, it can be difficult to optimize financial results given the complexity of navigating potential financial solutions, available incentives, rebates, and monetization of tax credits. There are thousands of potentially different rebate incentive programs across the country. Because of this, it’s a large administrative burden with no guaranteed outcome to navigate the project incentives, apply for them, and then collect the funds. The Investment Tax Credits (ITC), for instance, are federal incentives for solar energy systems.

Companies would need to have an internal process for monetizing these incentives and collecting the rebates. Opposed to financing an energy systems program on their own – or cobbling consultants, banks, and third-party utility data businesses – companies can now partner with Redaptive to manage the entire process and guarantee collection, which isn’t always certain. Combined, we've boosted customers' savings by over 9M by capitalizing on available rebates on their behalf.

Prioritizing Energy Programs Across Your Portfolio to Align with Objectives:

Prioritizing energy programs across a company portfolio requires a clear objective, a strategic mindset, and a holistic approach. If you don’t have a strategic advisor, you’ll need to conduct a comprehensive portfolio analysis, including auditing buildings, cataloging assets (i.e., HVAC, lighting, solar, EV charging infrastructure), and performing benchmarking studies. How do you know, for example, whether to prioritize an HVAC project at one portfolio building in Florida or a lighting project at a building in California? Redaptive can assist with the development of key metrics to compare the outcomes of projects to align with customer objectives. A common example is solving for a cost per metric ton of CO2 avoided and prioritizing projects based on this metric.

Unlike most Energy-as-a-Service  (EaaS) providers, Redaptive has a team of engineers to evaluate the technical feasibility and scope of each project. And, by analyzing energy consumption patterns and comparing building profiles, you can identify areas for improvement and prioritize projects based on specific goals and objectives. Redaptive brings an extensive network of best-in-class vendors and contractors or we can leverage an organization's existing vendor relationships. This strategic approach ensures that resources are allocated efficiently and maximizes the return on investment.

Programmatic Audits:

Identifying energy savings opportunities across a portfolio of buildings requires a programmatic approach. By streamlining the auditing process, organizations can identify common energy program measures that can be implemented across multiple buildings. This approach optimizes resource allocation, maximizes cost savings, and delivers consistent sustainability improvements. In an Energy-as-a-Service model, organizations can leverage the scalability and flexibility inherent to that program.

Normally an audit can cost between $0.10 and $0.15 a square foot. If you have a 1 million-square-foot facility an audit could cost $150,000. And, of course, if you have multiple buildings, you’re dealing with millions of dollars of auditing costs. But there is an easier and less expensive path than your standard audits. Redaptive can perform virtual audits with on-site customer personnel to determine potential opportunities. Experts can estimate what the outcomes could be before an actual audit is completed. This allows customers to reduce costs and to draft indicatives much more quickly.

RFI & RFP Development & Analysis:

Engaging vendors and contractors are an essential part of the energy program. An Energy-as-a-Service provider can play a vital role in the laborious Request for Information (RFI) and Request for Proposal (RFP) processes to reduce resource burden and select the best vendor for the project. Redaptive helps organizations obtain competitive bids and pricing from a diverse range of suppliers, ensuring a comprehensive analysis of the total cost of ownership. Redaptive can leverage its network and expertise to facilitate the selection of vendors based on factors such as expertise, experience, and cost-effectiveness— fostering collaboration and ensuring successful energy programs.

Supplier Negotiations:

Negotiating with suppliers is a critical step in optimizing the cost of energy programs. Redaptive can bring their negotiation expertise to the table, fine-tuning bids and negotiating pricing to ensure competitive pricing while maintaining quality standards. Their provider’s industry knowledge contributes to reducing costs and ensuring that energy programs and projects proceed smoothly, aligning with the cost-effective solutions offered by Energy-as-a-Service.

Construction & Implementation:

The construction and implementation phase is where energy programs become a reality. An Energy-as-a-Service provider should excel in managing the construction and implementation of retrofit projects, focusing on your safety requirements, and minimizing disruptions. By working closely with contractors, the provider needs to ensure seamless project delivery while keeping absorbing risk from potential cost overruns. The comprehensive project management and coordination provided by Energy-as-a-Service mitigate risks and optimize the implementation process, delivering cost-effective and sustainable outcomes.

ESG Performance and Reporting Measurement:

As part of ongoing customer service and warranty, sustainable outcomes should be at the forefront of every one of your energy program’s projects. Ongoing data collection and analysis is critical for evaluating the long-term cost-effectiveness and environmental impact of retrofits. Not every EaaS provider can assign a skilled representative to leverage their expertise to implement robust reporting and measurement systems that align with a customer's goals. These insights enable continuous improvement, support ESG reporting requirements, and provide a basis for setting future sustainability goals. Redaptive ONE, for instance, pulls water, gas, and electric use, building insights, and performance measurement using best-in-class meters. Additionally, dedicated customer success experts to analyze the data to give actionable insights to customers so programs are continually improved. 

Do all EaaS companies have the same model?

There are a lot of solutions providers that label themselves as EaaS; indeed, the term is often informally used as an umbrella term to describe a new way of approaching energy efficiency programs. A “true” EaaS company will take financial ownership and risk of the assets in question while providing continuous energy measurement data in order to maximize your savings. Redaptive goes a step further by giving data-based guidance to estate and facility leaders to determine the projects that will have the biggest impact across a portfolio. Additionally, the Redaptive ONE platform highlights building insights, gives performance data, and aggregates data for ESG reporting to support the leadership team. Ultimately, having support in project funding, program development and implementation, and the data to make continual improvements enables businesses to scale and optimize their buildings.

The chart compares options of financing and implementing an energy retrofit including leasing the finances, working with a building intellegence or data provider, project developers, Energy-as-a-Service companies that provide funding, versus Redaptive's offer which includes financing, project implementation, and data.


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