What is the typical ROI for an energy efficiency project?
Energy efficiency projects help you reduce the energy you consume each month (kWh) and/or lower your monthly peak demand (kW), thereby lowering your utility costs. Oftentimes, these projects offer additional returns by reducing maintenance or replacement costs as well as providing better control and increasing the life of equipment. In addition, enhanced lighting has been known to boost productivity and sales, although the direct economic benefits are more difficult to measure.
Nonetheless, an energy efficiency project will improve your bottom line. It will pay for itself over time and can help generate the future capital needed for additional improvements. It is also an excellent hedge against rising energy costs. The typical return on investment (ROI) is 15 to 30%, although some projects may yield an ROI of more than 100% depending on existing equipment, current utility rates, and available incentives.