Energy-At-Risk Financial Analysis Tool

If your business is considering energy-efficiency improvements, you need a meaningful way to identify the financial benefits and savings of such a project. Use our Energy-At-Risk Financial Analysis Tool to help make the business case to management for energy-saving measures.

Best of all, it’s absolutely free.

This financial modeling tool provides the information and support you need to green-light your energy-efficiency project within your organization. The tool is specially designed to quantify your potential energy savings which can translate into real dollars for your bottom line.

The metrics calculated include:

• Simple payback periods
• ROI
• Break-even analysis
• Opportunity cost of not doing the project

Each worksheet provides pros and cons of the individual financial metrics and the formulas used to calculate your project’s results.

To access the tool, training and an example project, see Additional information.

When you use our Energy-At-Risk Financial Analysis Tool, you:

• Get a value-added, decision-making tool at no cost.
• Quantify potential savings and financial gains of energy-efficiency projects.
• Can choose from a range of metrics and identify what works best for your project.
• Can build a better business case to management for a project.

Once you’ve submitted the proper inputs, the modeling tool automatically calculates the project’s potential results. The workbook contains nine different economic metrics:

• Simple Metrics:
  • Simple payback
  • Return on Investment (ROI)
  • Life Cycle Cost
• Measures that incorporate the time-value of money
  • Net present Value
  • Internal Rate of Return
• More sophisticated metrics that look at the cost of not implementing a particular energy efficiency measure
  • Conserve-or-Buy
  • Energy at Risk
  • Break Even Analysis

The tool produces a summary page that displays all metrics and compares them to your financial performance targets provided. This provides a broader perspective on project performance however it’s best to focus on the metrics that are most important to your business.

1. Enter input for the green boxes under the O&M and Capital tabs. Enter the simple inputs for your project such as energy use, capital costs and operating and maintenance costs. There also is a section to enter the financial performance targets, too.
2. The modeling tool automatically calculates the project’s financial performance results. The workbook contains nine different economic metrics.
3. Each worksheet provides pros and cons of the individual financial metrics and the formulas used to calculate your projects results. Decide which metrics best fit your project and situation based on this information.
4. See the summary page that displays all metrics and compares them to your financial performance targets provided.
5. Finally, label your analysis, record project specifications or note key assumptions (under the Cover tab).

Refer to the tool and other resources to help you better understand the process, interpret results, overcome challenges and assist in making a case to upper management. A simple example project for pump optimization is also included.