Discussing P&L Benefits Effectively


Energy efficiency can affect many line items on a company’s Income Statement (also known as the “Profit and Loss Statement” or “P&L”). If you look at the full picture through the lens of business acumen, you’ll see how effective it can be to discuss the potential P&L benefits of your efficiency project with your prospects. The following list gives you an idea of the types of line items that you may choose to discuss: 

 Discussing P&L Benefits Effectively

  • More sales: If you install attractive LED lighting in a grocery store, for example, the store will likely see an increase in grocery sales.
  • Less payroll: If your efficiency solution increases productivity (as we have discussed in previous blogs), employees may be able to do more work in less time.
  • Less repairs/maintenance: A new, high-efficiency product usually requires less maintenance than an old, soon-to-fail one.
  • Less scrap: You may recall a story I told about the aluminum windows and doors manufacturer that reduced scrap rate by 25%, effectively turning a 4.2-year payback (calculated using only the energy savings) into a 39-day payback (calculated using the aluminum scrap savings as well).
  • Lower utilities: Of course, your efficiency solution will probably have a positive effect on the utility bill, so this one will be included in virtually every case.
  • Higher rental rates: With all of the added benefits of efficiency, your prospect may be able to increase rental rates without deterring potential tenants.
  • Better tenant retention: An efficient building can be more comfortable, more attractive, and require less maintenance. All of these factors help retain existing tenants who might otherwise choose to move to a building that features the high-end amenities you are offering to your prospect.
  • Better tenant attraction: As in the case above, an efficient building is more comfortable and attractive than an inefficient one. Add in an ENERGY STAR® or LEED® certification and you’ve got yourself a recipe for tenant attraction.
  • Less need for Cap Ex Reserves: This is a topic that warrants further discussion, so stay tuned for more on this next week!

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Posted by Mark Jewell