Business growth should include your buildings
Many building owners are seeking ways to replace older equipment, solving comfort issues and operating hurdles, but they struggle to secure proper financing for all these projects. However, with integrated energy performance contracting, your building can become a safe investment, even bottom-line benefit, rather than a source of expense.
Building improvements – most specifically HVAC upgrades – are often seen as an expense unless they directly improve an industrial process or output. The truth is, however, that almost any well planned and implemented building HVAC improvement can become an investment when it leads to substantial energy efficiency improvements. Reducing bottom-line expenses can be just as good for business competitiveness as reaching new markets or increasing your current market share – and with less risk involved, when you work with a partner that contractually guarantees the financial outcomes.
Turning a capital expense into an investment
CAE is a manufacturer of simulation and training technologies for the civil aviation, defense and security, and healthcare markets. The company has over 8,000 employees in 35 countries.
In 2012, CAE’s head office in Montreal launched a public Request for Proposals (RFP) to find a contractor to replace the ageing HVAC equipment in its one- million-square-foot facility. Instead of doing a one-in-one-out replacement, CAE’s management team took the opportunity to ask the bidding companies to address the following goals as part of the retrofit:
- Generate significant energy savings and the highest possible Net Present Value (NPV)
- Optimize the HVAC system
- Simplify operations and maintenance for staff
- Contractually guarantee the project costs, incentives, and energy savings
Comparison between “one-for-one” replacement project and integrated energy performance project
In the end, CAE turned a capital expense into an investment by using an integrated energy performance contracting approach, and the company now highly praises this initiative for creating more value for their business.
“At CAE, optimizing the capital envelope is very important. We invest a lot each year. During a round table, we compare all of the potential projects that could benefi the company, including those submitted internally. The energy efficiency project was quickly selected because its rate of return was advantageous compared to other proposed investments. Moreover, because the savings were guaranteed, the risk level was very low.”
– David Héon, Manager, Facility Services / Health, Safety and Environment CAE
Read David Héon’s interview here.
A complete reconfiguration of the rooftop units
Rather than spend money to replace 149 aging rooftop units as initially planned, the integrated project reconfigured the ventilation system, replacing the 149 units with 38, complete with a heat recovery glycol loop.