How ESCo Engineers can Increase Project Size by 20X
I’ve been in the energy efficiency engineering business for quite some time. I have also trained and mentored energy efficiency engineers. I find that inexperienced engineers tend to be afraid of asking dumb questions; and experienced engineers tend to think they know all the answers. Both conditions limit the value that engineers can create for their companies and for the customer.
An Energy Service Company or ESCo will usually follow a proven project development or sales process that goes something like this:
Utility Bill Audit;
Detailed Engineering Study; and
The difference between a $2,000,000 project that solves many of your customer’s facility challenges; and a $100,000 lighting retrofit is the approach taken in the third step of this process (Feasibility Study).
There are three approaches taken by most engineers.
The rookie engineer will use a prescriptive approach. They use a checklist of equipment to inventory, they’ll take pictures of nameplate information, of major equipment and control systems. They’ll use their limited knowledge to duplicate what has been done in the past. They’ll focus only on energy savings and create a $100,000 scope.
The $100,000 project results in 10% energy savings of $25k/year for a 4.0 year payback.
The builder is an engineer who has been around a while. He has witnessed or experienced various energy efficiency retrofits and is looking for those opportunities. A builder uses their experience and applies what he/she knows to the current customer. This effort will often result in a $500,000 scope.
The $500,000 project results in 20% energy savings of $50k/year plus $20k/year in operational savings for a 7.0 year payback.
The developer is a curious engineer. He/she asks open-ended questions of the customer to better understand the customer’s bigger picture. These questions expose key problems that must be solved. If the ESCo solves these problems, they’ll be the hero. As the developer connects: 1) utility bill data with; 2) the customer’s story; and 3) what they see in a site visit; they create a unique and comprehensive project scope that reaches $2,000,000. This method of development is called triangulation.
The $2,000,000 project results in 30% energy savings of $75k/year; abundant operational savings; and payback is immaterial because the project solves many problems.
How Does the Developer Do it?
I quickly became a developer energy efficiency engineer and have trained others to do the same. Why? Because a $2,000,000 project that solves multiple problems is a much better accomplishment than a $100,000 project that saves a little energy.
Experienced engineers think they know the answers, and the customer doesn’t know anything. They think they are hired for their expertise and must demonstrate that expertise to this ignorant customer.
Rookie engineers are reluctant to ask questions because they don’t want to look like a rookie. They do what senior engineers tell them to do because they believe they don’t have enough experience to know what to do on their own.
A developer engineer is curious. Curious people ask open-ended questions and then engage in the discussion that follows. An open-ended question cannot be answered with a yes or no. Here are a few examples:
“What is your greatest facility problem?”
“What will allow you to do your job better?”
“What would you like to accomplish with a project like ours?”
The answers to these questions can be anything. The follow up questions are just as important. Let’s say that the customer says, “We don’t have enough staff.” As the answer to “What is your greatest facility problem?” You must stay curious and not dismiss this topic as out-of-bounds for an energy project. This follow up question is called “probing”. A good probing question to this specific answer is “What could you accomplish with added staff?” or “What has prevented you from adding more staff?”
The challenge with open-ended questions is that they add more time to a conversation. If you want to complete the feasibility study in a short time frame, you’ll miss out on valuable answers.
At some point, you do need to gain closure on your open-ended questioning conversation. If we take the staffing issue, a closing question would be, “Would an automation system be a good solution to your staffing needs?” Closing questions are close ended… they can only be answered with a yes or a no.
In the energy efficiency world, there are many avenues to achieve cost savings and improved operations. Here are a few of those avenues that must be included at the feasibility stage of an audit:
Know the utility environment of that location.
Understand how utility rates impact the customer’s utility bill.
Consider the life of equipment to be replaced.
Comfort trumps energy savings.
Reliability and safety trumps comfort.
Connect solutions to environmental goals of the organization.
Consider alternative energy generation strategies (micro-grids, solar, generation, etc.)
This list covers a few of the items that are often missed by the Rookie or the Builder. Frankly, this list is much longer. I will delve into many of these topics in future blog posts. Please stay tuned.