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June 10, 2022
Congratulations! Your nonprofit has chosen to enjoy the multiple benefits of energy efficiency, such as lower energy bills, improved comfort and wellness, and a smaller carbon footprint. This guide is designed to help nonprofits like yours make the most of the opportunities afforded by energy efficiency, access incentive programs, and overcome any hurdles along the way.
What does your nonprofit want to accomplish by investing in energy efficiency? Are you motivated by saving money, making your facilities more productive, doing your part to address climate change, or a combination of several reasons? Answering these questions at the start will likely be helpful later when you are talking with your colleagues, donors, and stakeholders about the project. Sharing your goals will help shape the scale and scope of your project, which might be useful when making financial decisions and prioritizing which energy efficiency measures to implement.
Clearly defined goals will also help you communicate your success after the energy efficiency project is complete. Will your investment in energy efficiency make more resources available to advance your core mission? What will the people who work in or visit your facilities think about the results? Is environmental sustainability important to your employees, volunteers, donors and stakeholders?
While energy efficiency is always a good thing, it can be hard to see—many measures are hidden or installed in out-of-the-way places. Knowing what success looks and feels like could help you document and explain all the benefits. High-efficiency LED (light-emitting diode) light bulbs are cool to the touch, offer superior illumination, and last for many years. Programmable thermostats and new heating and cooling equipment can make extra hoodies, sweaters, and under-desk (and very inefficient) space heaters a thing of the past. And nobody in finance or accounting will complain about lower utility bills and less wasted energy. Just be sure that everyone understands that your investment in energy efficiency is the reason why such benefits have followed.
As you set goals, you will discover that you will need support from across your nonprofit, as well as from external stakeholders, to be successful. Your nonprofit may already have an “energy team” of colleagues who are involved in decision-making related to energy efficiency. If not, you will need to assemble one. An energy team could include a facility manager, energy manager, grant writer or development professional, and a representative from finance or accounting.
Every team also needs a leader. The leader will be responsible for communicating the benefits of the energy efficiency project and explaining the rationale for the investment. The professional background of the leader is less important than their ability to plan, follow through, and communicate. The leader should also be empowered to engage with external stakeholders, including auditors, utility managers, and contractors, on behalf of your nonprofit. If you are reading this, you are likely a good candidate to become the leader of the team—someone who will guide the project from start through completion (and beyond).
Energy efficiency projects are beneficial long after the project is “complete.” It can be tempting to focus on the “payback” period—the time it takes energy savings to equal or surpass the cost of the measures. This amount of time is usually measured in years—often between five and 10. It is good to keep this payback period in mind, and you will probably be asked about it a lot, but try not to overemphasize its importance in the overall context of the project and the multiple benefits that will accrue to your nonprofit. Tracking energy savings during and after the payback period will put the energy efficiency project in the proper perspective.
This is especially true when calculating reductions in greenhouse gas emissions. As part of your goal-setting and success-defining exercise, consider leveraging the impressive—and free—ENERGY STAR® Portfolio Manager® benchmarking software tool offered by the U.S. Environmental Protection Agency. In addition to being a big help when benchmarking your nonprofit facilities, Portfolio Manager can help you estimate how much your energy efficiency project contributes to the fight against climate change by calculating direct (and often indirect) greenhouse gas emission reductions. You will be surprised to learn just how good for the environment your energy efficiency project will be.
Now it is time to start crunching the numbers. The best place to start is by gathering at least 12 months of past utility bills and grabbing a tape measure so you can document the current energy performance of your facilities. This process—benchmarking—can match the scope and scale of your project. A more substantial project will require more information-gathering and analysis—key elements of benchmarking—than a simple replacement of inefficient lighting fixtures or old vending machines.
One underappreciated aspect of energy efficiency projects is the way savings are compounded as more and more measures are bundled together. Buildings are machines, and when one system is broken it can mean other systems function less efficiently. Therefore, whole-building retrofits can be extremely cost-effective. Insulation and air sealing improvements are good, but become even better when combined with new heating and cooling equipment and duct sealing. LED light bulbs are good, but become even better when matched with dimmers and occupancy sensors. Extra savings sourced and leveraged from multiple measures can also help “even out” differences in cost-effectiveness and contribute to a very attractive, balanced ratio of costs and benefits.
ENERGY STAR Portfolio Manager is the gold standard of benchmarking software tools. About 25 percent of commercial building space in the United States is actively benchmarked using Portfolio Manager. Every four years, the U.S. Energy Information Administration collects data through the Commercial Building Energy Consumption Survey. Portfolio Manager uses this data to create a baseline to compare to individual buildings. Portfolio Manager helps non-profit organizations such as schools, worship facilities, colleges, universities, and hospitals track and benchmark their energy usage, and set baselines.
After entering the required information—at least an address, construction date, floor area, occupancy, and 12 months of utility bills—into a data collection worksheet, you will be able to evaluate your building on a scale of one to 100. A score of 75, for example, means your building is in the top quartile of energy efficiency in its building category (and eligible for an ENERGY STAR rating). Lower scores mean your facilities have a greater opportunity to benefit from energy efficiency.
In addition to gathering the information required for benchmarking, you should also note the make, model, fuel source, and age of the heating and cooling equipment and appliances installed in your facilities. Potential savings can be found across the entire facility, so count everything that consumes energy: refrigerators, televisions, vending machines, computers and more. This will also help you begin to make plans for end-of-life replacements and have more productive consultations with the auditors and contractors who will help you define the project scope and access any available incentives.
All of the information collected to benchmark your facilities will also help you evaluate, measure, and verify the project’s savings over time. Portfolio Manager can help you with this step, too. A sound plan for evaluation, measurement, and verification (EM&V) is important when accessing utility incentive programs and is directly and closely related to your earlier goal-setting and success-defining exercise.
A comprehensive profile of energy consumption across your facilities will help you survey the range of potential opportunities for savings that will eventually be distilled into the scope of your project. This is where an energy efficiency professional might be helpful. Your local utility is likely a good source of information about which certifications and qualifications are important to consider when choosing an auditor or contractor to help you develop a cost-effective selection of energy efficiency measures (i.e., the project). Many states and utilities also offer free or low-cost energy audits.
According to ASHRAE (formerly the American Society of Heating, Refrigerating and Air-Conditioning Engineers), there are three types of audits: walk-through analysis (a.k.a., “Level 1”), energy survey and analysis (“Level 2”), and detailed analysis of capital-intensive modifications (“Level 3”). Most nonprofits will likely find a Level 1 or 2 audit sufficient to develop a cost-effective energy efficiency project. Nonprofits with especially energy-intensive operations across several facilities or high financial thresholds to justify investments might need a Level 3 audit.
The menu of energy efficiency measures that results from an audit can be a lot to process. Some factors to consider when selecting the optimal combination of measures to implement include your goals, as well as the difficulty, timing, and, of course, cost of the installation. Some measures might be high-priority equipment replacements that your facility needs to operate. Some measures could be easier to install after others, or at certain times of the year. Some measures might generate energy savings that you can leverage and use to pay for other measures installed later in the project.
Although a cost-effective energy efficiency project will generate savings over time that surpass the up-front costs, incentive programs can make a good thing even better. Many utilities offer rebates for high-efficiency lighting fixtures, heating and cooling equipment, appliances, and controls. An audit can help you understand what incentives might be available. ENERGY STAR offers several online tools to help make financial sense of energy efficiency projects, including its Rebate Finder. The Database of State Incentives for Renewables & Efficiency® (DSIRE®) is another comprehensive collection of rebate and financing programs.
No- or low-cost financing programs designed especially for energy efficiency projects could help you avoid upfront costs by allowing payments over time that are offset by monthly energy savings. On-bill financing programs, in particular, offer the additional convenience of a single monthly payment for energy and energy efficiency retrofits. The U.S. Department of Energy’s Better Buildings Financing Navigator is a great place to start when surveying potential financing options. In addition to providing descriptions and comparisons of specialized programs like on-bill financing and traditional loans, it can also help you find providers in your area.
Many nonprofits find ways to implement energy efficiency projects by combining rebates with a blend of internal resources (e.g., operating or capital funds) and financing. To the extent your project will rely on internal resources, your earlier work to set goals, define success, and identify savings will be especially critical. A clear, specific plan for how your nonprofit can justify the investment and afford to implement the energy efficiency measures that define your project is essential.
Congratulations! After all your hard work, your nonprofit is realizing the multiple benefits of energy efficiency. Energy bills are lower. Comfort, wellness, and productivity are improved. And your nonprofit is doing its part to address climate change.
Energy savings will continue to accrue over time, even after your project is paid for and complete, which requires ongoing EM&V. These post-project efforts started when you first benchmarked your facilities using Portfolio Manager. Now, you will be able to demonstrate the benefits of energy efficiency to your colleagues, donors, and stakeholders and provide assurance that the investment of time, energy, and money was worth it. And the next time a savings opportunity from energy efficiency arises, you will be even better prepared to make the most of it.
Communicating the success of your project is the final step. Be sure to recognize the contributions from your colleagues because without them your nonprofit would still be back at the beginning. Everyone who offered brain power, creative thinking, leadership, and decisiveness along the way deserves some of the credit for a job well done.
Your nonprofit is an important part of your community, so be sure to extend gratitude to the donors, stakeholders, auditors, utility managers, and contractors who helped make the energy efficiency project possible. No need to be shy. ENERGY STAR offers some helpful guidance about developing and implementing an effective communications plan. Take to social media, talk with other nonprofits, publish an online case study, and mention the benefits of energy efficiency as much as possible.
Congratulations! And good luck with what comes next for your nonprofit!
Read all of our resources on energy efficiency for nonprofits.
Author: Miguel Yañez-Barnuevo
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