The electrical contractor’s energy services goal should be to develop a comprehensive plan to help its customers identify and achieve their electricity-reduction and sustainability goals. The development and execution of this plan can be distilled down to an 11-step energy services project-delivery process.
Energy project proposal
The purpose of the 11-step process is to help the electrical contractor meet customer needs in an organized and holistic manner. This process addresses not only the customer’s basic concern about rising energy costs and saving energy but also handles project funding, execution and performance verification.
The project process starts with Step No. 1, which is gaining an understanding of how the customer currently uses the building. Understanding the customer’s business operations is a prerequisite for any energy services project; to be successful, the project must complement the customer’s business and enhance its bottom line. Only after the electrical contractor understands its customer’s business can it effectively assess building energy use and sustainability in Step No. 2 through a comprehensive energy and sustainability audit. In other words, reducing light levels in a production area may result in energy savings for the customer, but resulting productivity losses, increased errors and waste, and other negative effects may dwarf these savings.
Steps No. 3 through No. 5 follow from the first two and focus on identifying, analyzing and defining project opportunities that make up the energy project. The opportunities for saving energy and improving sustainability identified in Step No. 3 need to be analyzed in Step No. 4 from a technical, operations and financial standpoint. The outcome of Step No. 4 should be a list of project opportunities that are ordered in terms of ease of implementation, impact on operations, initial cost and estimated return on investment. Any energy project undertaken by the customer is going to require an investment in terms of money and other limited resources, so the customer needs to be able to rank the possible projects to determine those that it wants to undertake at this time. Remember, the customer is often deciding between the energy services project and other competing business opportunities—such as purchasing a new piece of production equipment—that are also vying for the company’s scarce resources.
Energy project funding
Step No. 6 addresses funding the energy project, and it is a critical one for both the customer and the electrical contractor.
It is where the electrical contractor typically hands the customer a proposal and walks away, assuming that the customer will figure out how to fund the proposed energy services project. Remember, energy is not the customer’s business, and the customer is usually not aware of all of the possible government, utility and other incentives that may be available or know how to take advantage of them. Similarly, the customer may assume he or she has to either have the cash on hand or be able to borrow the funds in order to proceed with the project. Again, the electrical contractor can show the customer alternative ways of financing the project through manufacturers and distributors as well as alternatives to outright project ownership, such as leasing or purchase agreements.
Energy project execution
Once the customer approves the energy services’ project proposal, the electrical contractor can begin work. Project execution is the part of the energy services project delivery with which the electrical contractor is most familiar and encompasses Steps No. 7 through No. 10. Step No. 7 is an outgrowth of the electrical contractor’s design/build services and involves the design and specification of the energy project. Step No. 8 involves the procurement of the needed materials and equipment for the installation. The actual installation takes place in Step No. 9.
Step No. 10 involves the commissioning and closeout of the energy services project, which is critical to the project’s success. Commissioning involves not only ensuring that all of the equipment and systems operate properly but also demonstrating to the customer that the installed systems perform as promised. Documenting system performance may also be required for the owner to qualify for government, utility and other incentives. Step No. 10 should also include system training and providing the customer with the system’s technical documentation, warranty information and record drawings. This point is also where the electrical contractor should introduce the customer to its service department and offer service capabilities if this customer is not already a regular service customer.
Energy project performance verification
Step No.11, the final one in the energy services project-delivery process, verifies energy project performance after project commissioning and closeout. In this step, the electrical contractor arranges with the customer to review the results of the energy project six months or a year after project completion to ensure that the systems installed continue to work as planned and the customer is realizing the energy savings that it expected. This review is not only important for customer relations but also provides the electrical contractor an opportunity to learn and improve its performance on future projects. This step can also lead to additional energy services project opportunities with the customer, as shown by the flow chart feedback loop between this final step and Step No. 3, which is to identify new energy and sustainability opportunities for the customer.
I will cover the individual steps in this process in more detail during the coming year. I hope that this 11-step energy services project-delivery process will help you develop an effective strategy for entering or expanding your market as well as help you identify the organizational knowledge, skills and abilities that you will need to successfully participate in this emerging market.
This article is the result of a research project, “Energy Roadmap: Electrical Contactor’s Guide for Expanding into the Emerging Energy Market,” sponsored by ELECTRI International Inc. (EI). The author thanks EI for its support.
GLAVINICH is director of Architectural Engineering & Construction Programs and an associate professor in the Department of Civil, Environmental and Architectural Engineering at the University of Kansas. He can be reached at 785.864.3435 and firstname.lastname@example.org.