Savings to Include in Your Financial Summary


Yesterday, we discussed the costs that should be included in your financial summary. Today, we’ll dive into the savings portion of the equation:

savings to include in your financial summary

Utility tariff: Which utility tariff did you use to calculate the savings? I’m always surprised to see financial summaries that fail to take into consideration off-peak, on-peak, and critical-peak power pricing. In some territories, this is not as relevant since utilities there may charge the same amount per kilowatt-hour regardless of the time of day or year.  However, in many other regions (such as parts of California), you could see a difference of 10-to-1 (sometimes as high as 20-to-1!) between off-peak-power pricing and critical-peak-power pricing. You have to be really careful to take into consideration exactly when the savings you are projecting will occur and what the cost per kilowatt-hour will be at that particular time.

The start of the savings: When are the savings going to start for your prospect? If the implementation process is long, the savings may not start for many months – and this has an effect on the financial landscape of the project.

Interaction between the measures: If you're putting in a more efficient lighting system, that's one thing. However, what if you were to layer on lighting controls that decrease the time that those lights would be illuminated by 50%? You have to make sure that measure interactions are taken into account.

Savings: In keeping with yesterday’s blog on calculated costs, you need to consider who will be benefiting from the calculated savings. Is it the landlord? Is it the tenants? Is it both? The landlord and the tenants should both understand how the leases are written, what loads are connected to which meters, who pays for those meters, and ultimately, how the savings will be allocated after the retrofit.

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Posted by Mark Jewell

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