johnson controls 2010 energy efficiency indicator webcast

2010 North America ResultsMedia Webcast

April 19, 2010

Energy Efficiency Indicator

Introduction and Welcome

Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.

2

C. David MyersPresident Building EfficiencyJohnson Controls

Clay NeslerVice President Global Energy & SustainabilityJohnson Controls

Today’s Agenda

Introducing Johnson Controls and IFMA

Overview of the Energy Efficiency Indicator

Summary of 2010 North America Survey Findings Panel Discussion of Results:

Don Young, International Facility Management Association (IFMA)Peter Molinaro, The Dow Chemical CompanyJennifer Layke, Institute for Building Efficiency, Johnson Controls

Media Question & Answer

3 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.

About Johnson Controls

Building EfficiencyCreating quality indoor environments that are comfortable, safe, energy efficient, and sustainable

Power SolutionsProviding the highest quality, lowest cost automotive batteries to power vehicles of today and tomorrow

Automotive ExperienceDelivering world-class technologies that differentiate vehicle interiors and increase consumer demand

4

200 million vehicles 12 million homes 1 million commercial buildings

130,000 Employees Fortune 100 Founded 1885

About IFMA

World’s largest and most widely recognized international association for professional facility managers, supporting more than 19,000 members in 78 countries

123 chapters and 16 councils worldwide, manage more than 37 billion square feet of property and annually purchase more than US$100 billion in products and services

Don YoungVice President of Communications,

International Facility Management Association

(IFMA)


2010 Energy Efficiency Indicator – North America

What is the Energy Efficiency Indicator?

Who did we survey?

What are their priorities and concerns?

What are their investment plans and financial criteria for making energy efficiency investments?

What practices and technologies are most common?


What is the Energy Efficiency Indicator?

A global survey of decision makers responsible for commercial buildings and their energy use

Examines trends in energy efficiency priorities and practices

Founded by Johnson Controls and the International Facility Management Association (IFMA) in 2007

4th annual survey completed for North America in March 2010

Additional surveys underway in China, France, Germany, India, Poland, Spain, and the United Kingdom, with results to be released at events throughout the summer of 2010


RESPONDENT PROFILEEnergy Efficiency Indicator

2010 North America Results


Who we surveyed: 2 qualifying criteria

1. Must have capital- or operations budget responsibility for their organization’s facilities.

2. Job responsibilities must include reviewing or monitoring energy usage,

and/or

proposing or approving initiatives to make organization’s facilities more efficient.


9

Who we surveyed

10

By Role By Region

9%8%

16%

4%

8%4% 14%

13%

5%

19%

By Industry Sector

C-level Executives

30%

VPs and GMs32%

Facility Managers

27%

Owner/ Proprietors

11%

Healthcare20%

Consulting/Legal9%

Manufacturing7%

Finance7%

Government6%Retail

5%Service

5%

IT/Telcom4%

Media/ entertainment

4%

Other33%

1435 total respondents in North America

Who we surveyed


11


OtherMedia/ entertainment

IT/TelcomService

RetailGovernment

FinanceManufacturing

Consulting/LegalHealthcare

More than 1 million sf500,000 to 999,999 sf100,000 to 499,999 sf

50,000 to 99,999 sfLess than 50,000 sf

Owner/ ProprietorsFacility Managers

VPs and GMsC-level Executives

0 50 100 150 200 250 300 350 400 450 500

33%4%4%

5%5%

6%6%

7%9%

20%

9%11%

21%8%

19%

10%25%

30%28%

Number of Respondents

Roles

Area of Re-sponsibility

Industry Sec-tor

PRIORITIES AND CONCERNSEnergy Efficiency Indicator



Energy efficiency remains a strong business priority

65%... are paying more attention to energy efficiency than last year

84%... Say energy efficiency is a priority for new construction and retrofit projects


…yet enthusiasm has dipped since 2009

14

2007 2008 2009 201040%

50%

60%

70%

80%

90%

100%

77%

88%93%

84%

51%57% 58%

52%

Consider energy efficiency a priority in current/planned construction or retrofit projects Energy management is extremely or very important to our organization


Reducing energy costs is the key driverPublic imaged is also notably high

15

Energy cost savings

Enhanced public image

Government/utility incentives

Greenhouse gas reduction

Attracting, retaining customers

Anticipated regulation

Existing legislation

Attracting, retaining employees

Investor reporting demands

Attracting tenants

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

40%

Extremely significant Very significant Somewhat significant

Not very significant Not at all significant Not Applicable

How significant an influence are the following in your organization's energy efficiency decisions?


Incentives drop in importance while carbon emission concerns become stronger

16

2008 2009 20100%

20%

40%

60%

80%

100%

12% 13% 9%

26% 30%22%

37%36%

31%

14% 12%

16%

8% 5%

9%

3% 4%12% Don't know

Not at all significant

Not very significant

Somewhat significant

Very signif-icant

Extremely significant

How influential are government/utility incentives in your organization's

energy efficiency decisions?

2009 20100%

20%

40%

60%

80%

100%

7% 5%

15% 20%

35% 37%

21%23%

17% 11%5% 4%

Don't know

Not at all significant

Not very significant

Somewhat significant

Very signif-icant

Extremely significant

How significant are greenhouse gas emission reductions in your organization's energy

efficiency decisions?


Real estate leaders believe energy prices will climb again after falling in 2009

17

Average expected change in energy prices

during 2010 = 7% increase

0%

20%

40%

60%

80%

100%

Cum

ulat

ive

Dis

tribu

tion

Do you believe the combined price of the energy that your facilities use will. . .

64% believe prices will in-crease over the next 12

months


Despite lowered legislation expectations, more organizations setting carbon goals

18

2008 2009 20100%

20%

40%

60%

80%

100%

11% 16% 9%

28%35%

27%

37%

34%

38% Somewhat likely

Very likely

Extremely likely

How likely is significant legislation mandating energy efficiency and/or

carbon reduction within the next 2 years?

76%85%

75%

2007 2008 2009 20108%

9%

10%

11%

12%

13%

14%

15%

16%

11%

12% 12%

14%

Does your company/organization have a publicly stated carbon-reduction goal?


Many lack carbon strategies; those with strategies choosing building efficiency first

Supply chain carbon reductions

Carbon offset purchases

Real estate portfolio consolidation

Alternative transportation fuels

Energy efficiency in vehicle fleet

Renewable power purchases

Onsite renewable energy

Telecommuting, virtual meetings

Energy efficiency in buildings

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

1%

1%

1%

2%

3%

4%

4%

5%

38%

What is your organization's top strategy to reduce its carbon emissions?

40% either don’t know or have not yet prioritized among strategies


19

INVESTMENT PLANS & FINANCIAL CRITERIAEnergy Efficiency Indicator



The recession had a mixed impact on investment

21

As a result of the recession…

41% invested less,

27% invested at historically consistent levels, and

32% invested more in energy efficiency

…over the past 12 monthsEnergy Efficiency Indicator – North America 2010

Copyright 2010 Johnson Controls, Inc.

Overall rebound in plans to invest in energy efficiency

22

2007 2008 2009 201040%

60%

80%

57% 56%

46%

52%

64%61%

55%

60%

capital expenditures operating expenditures

Percentage planning to make energy efficiency investments over the next 12 months with…


Construction and retrofit starts plans also increasing

23

2009 20100%

5%

10%

15%

20%

25%

30%

35%

40%

16%

22%22%

30%

new construction retrofitsPercentage currently undergoing or planning to undergo

over the next 12 months


Large and public organizations are most likely to invest in efficiency; Retail sector lags


0%

20%

40%

60%

80%

100%

0.517770034843206

0.251811594202899

0.50.603833865814696

0.793258426966292

0.5869565217391290.619047619047620.714285714285715

0.256756756756757

0.674740484429068

0.301045296167248

0.465579710144928

0.309090909090910.246006389776358

0.137078651685393

0.2717391304347820.190476190476191

0.226190476190476

0.486486486486487

0.211072664359862

0.1811846689895470.282608695652174

0.1909090909090910.1501597444089460.069662921348314

8 0.1413043478260870.1904761904761910.059523809523809

50.256756756756757

0.114186851211073

Don't Know

No

Yes

Do you expect your organization to make energy efficiency improvements financed with capital expenditures over the next 12 months

Capital budgets and incentives are primary funding source; Use of financing is rare


Facilities capital budget

Grants or tax credits

Energy savings performance contract

Energy or climate set-asides in capital budget

Power purchase agreement (PPA)

Traditional debt financing

Shared savings agreement

Utility on-bill financing (OBF)

Capital or municipal lease

PACE/tax lien financing

Energy efficient mortgage

0% 10% 20% 30% 40% 50% 60%

52%

20%

14%

9%

8%

7%

5%

3%

3%

1%

1%

Which options will your organization consider to pay for energy efficiency and renewable energy projects over the next 12 months? (Select all that apply)?

N = 1427

Budget levels and expected impact remain consistent

26

2007 2008 2009 20100%

2%

4%

6%

8%

10%

12%

7.3%8.2%

7.6% 7.8%

5.2%6.2%

5.5% 5.5%

capital budgetoperating budget

What percentage of your facilities-related budgets will be invested in

energy efficiency over next 12 months?


2007 2008 2009 20100%

20%

40%

60%

80%

100%

Don't know

More than 10%

5% to 9%

1% to 4%

Less than 1%

By how much do you expect energy improvements put in place over the

next 12 months to reduce your energy consumption?

Investment criteria also holds steady;44% require less than 3 year payback

27

2008 2009 20100%

20%

40%

60%

80%

100%

83% 83%87%

43% 44% 44%

5% 6% 4%

Less than 10 years

Less than 3 years

Less than 1 year

What is the longest payback period you would allow for a significant energy

efficiency investment?


2008 2009 20100%

20%

40%

60%

80%

100%

15%

44%

14%

How does that compare to what would have been allowed 5 years ago?

Don’t Know

Allowed longer payback 5 years ago

Allowable payback hasn’t changed

Will allow longer payback today

28

Limited internal capital is the greatest barrier to energy efficiency

3.2 Average maximum payback period for energy efficiency

44% require a 3 year payback or less

Other (specify)

Inability to finance (credit rating, col-lateral, balance sheet)

Dedicated attention, ownership

Buy-in from senior leaders

Landlord/tenant split incentives

Technical expertise

Uncertainty of savings/ROI

Insufficient payback/ROI

Lack of capital budget

0% 5% 10% 15% 20% 25% 30% 35% 40%

3%

3%

4%

5%

5%

6%

16%

21%

38%

What is the top barrier to capturing energy savings for your organization?


PRACTICES & TECHNOLOGIESEnergy Efficiency Indicator



Most popular efficiency measures implemented over the past 12 months

72% switched to more energy efficient lamps, ballasts, or lighting fixtures

63% educated facilities operations staff

61% educated building occupants

56% adjusted HVAC schedules/setpoints

40% installed occupancy or daylight sensors


30

Green buildings are accumulating;Renewable energy on the radar

33% seeking green building certification for new construction projects

12% have at least one green certified building, up

from 8% in 2009

31% considering solar PV, 20% considering

solar thermal, 14% considering geothermal in new construction and retrofit projects


Green building goals staying constant

32

2008 2009 2010 2008 2009 20100%

20%

40%

60%

80%

100%

34% 38% 33%20% 17% 18%

48% 45% 52%

59% 64% 60%

12% 14% 13%18% 16% 20%

5%3% 2% 3% 3% 2%

don't know

no goal for green buildings

green elements, but not cer-tified

certified to a recognized green standard

What are your goals with respect to green buildings?

New Construction Retrofit Projects


Consideration levels for renewable energy technologies fall in 2010


Solar elec...

Solar the...

GeothermalWind

Biomass

Hydrop...0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

31%

20%

14%13%

7%5%

2008 2009 2010

Which renewable energy technologies is your organization considering or utilizing in construction or retrofit projects?

High expectations for lighting and smart building technologies


Lighting technologies

Smart building technology

Solar photovoltaics (PV)

Electric and plug-in electric vehicles

Nuclear power

Concentrating solar power (CSP)

Stationary electric energy storage

Carbon capture and storage for power plants

0% 10% 20% 30% 40% 50% 60%

51%

44%

38%

28%

22%

18%

6%

3%

Which technology do you expect to have the greatest performance-price ratio improvement over the next ten years (select up to 3)?

Observations & Conclusions

Efficiency spending is starting to reboundEnergy cost concerns, public image, and climate leadership goals are driving investment. Larger organizations are more likely to make efficiency investments.

Buildings efficiency is top carbon strategy Despite lowered legislation expectations, more organizations setting voluntary GHG goals

Capital availability remains a strong barrierOrganizations rely primarily on internal capital budgets for efficiency & renewable energy investments rather than seeking external financing


For more complete EEI results see online press kitGo to johnsoncontrols.com media

press materials press kits

Building Efficiency 2010 Energy Efficiency Indicator

36

http://johnsoncontrols.mediaroom.com/index.php?s=112

Includes link to

webcast archive


http://johnsoncontrols.mediaroom.com/index.php?s=112

Panel Discussion


37

Peter MolinaroVice President , Federal and State Government Affairs, Dow Chemical Company

Jennifer LaykeExecutive DirectorInstitute for Building EfficiencyJohnson Controls

Don YoungVice President of Communications, International Facility Management Association (IFMA)

Media Q&A


38

Questions can be submitted to the panel by clicking “ask question” below

APPENDIXAdditional Detailed Findings


Who we surveyed


9%8%

16%

4%

8%4% 14%

13%

5%

19%2007 2008 2009 2010

0200400600800

1000120014001600

12491146

1365 1435

North American EEI Respondents


40

Energy management more important to larger organizations and varies by sector

41

0%

20%

40%

60%

80%

100%

0.1540069686411150.0851449275362320.10.1853035143769970.233707865168539

0.1521739130434780.1714285714285710.2198581560283690.081081081081081

10.166089965397924

0.369337979094077

0.2717391304347820.409090909090909

0.4376996805111820.429213483146068

0.4021739130434780.3904761904761910.397163120567376

0.324324324324325

0.41522491349481

0.37630662020906

0.451086956521739

0.4545454545454550.341853035143770.285393258426966

0.3913043478260870.3619047619047630.333333333333333

0.472972972972974

0.356401384083045

Not at all impor-tant

Not very impor-tant

Somewhat important

Very important

Extremely impor-tant

How important is energy management to your company/organization?


Real estate leaders believe energy prices will climb again after falling in 2009

42

Decrease by ?- 41%-60%- 21%-40%- 11%-20%

- 6%-10%- 1%-5%

No Change+ 1%-5%

+ 6%-10%+ 11%-20%+ 21%-40%+ 41%-60%+ 61%-80%

+ 81%-100%+> 100%

Increase by ?

-5% 0% 5% 10% 15% 20% 25% 30%

Do you believe the combined price of the energy that your facilities use will. . .

Average expectation =

6.9% increase in combined energy price for

buildings during 2010


Climate legislation is viewed as both a risk and a business growth opportunity

43

Primarily a risk

A slightly greater risk

An equal risk and opportunity

A slightly greater opportunity

Primarily an opportunity

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

19%

19%

46%

9%

7%

Is climate change legislation a risk or a growth opportunity for your organization?


No significant shift between cost and environment as a driver between 2007-2010

44

2007

2008

2009

2010

0% 20% 40% 60% 80% 100%

6%

6%

7%

7%

24%

20%

21%

24%

22%

21%

20%

22%

35%

37%

37%

33%

7%

10%

8%

9%

5%

5%

5%

5%

1%

1%

1%

1% 100% for cost savings

Mostly for cost savings

Somewhat more cost savings

50% cost/50% environmental

Somewhat more environmental

Mostly for environmental

100% for environmental

Relative influence of cost savings vs. environmental responsibility


73% select building efficiency as one oftheir top six strategies

No prioritization amongst strategies

Don't know

Supply chain carbon reductions

Carbon offset purchases

Real estate portfolio consolidation

Alternative transportation fuels

Energy efficiency in vehicle fleet

Renewable power purchases

Onsite renewable energy

Telecommuting, virtual meetings

Energy efficiency in buildings

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%23%

16%

8%

3%

6%

10%

20%

12%

15%

23%

35%

26%

15%

1%

1%

1%

2%

3%

4%

4%

5%

38%

Top Strategy

Other Strategies (up to 5)

What are your organization's top strategies for reducing its carbon emissions?


45

The recession has had a mixed impact on levels of efficiency investment


0%

20%

40%

60%

80%

100%

6% 5% 7% 7% 4% 9% 10% 5%

26% 27% 24% 26% 26%32% 27%

23%

27% 24% 28% 29% 31%

27%

12% 25%

20% 18%23% 18% 18%

16%

20%25%

22% 26% 19% 20% 21% 15%31%

23% Invested much less in energy management

Invested somewhat less in energy management

Invested at historically consis-tent levels in energy man-agement

Invested somewhat more in energy management

Invested much more in energy management

What impact has the economic recession had on your level of investment in energy management programs and projects over the past 12 months?

Investment criteria holds steady.44% require less than 3 year payback

47

2008 2009 20100%

20%

40%

60%

80%

100%

5% 6% 4%

16% 16% 16%

22% 22% 24%

16% 14% 17%

18% 18% 19%

6% 7%8%

10% 12% 9%Don't know

Would not require an ROI

10 years or more

6 to less than 10 years





Less than 1 year

What is the longest payback period you would allow for a significant energy

efficiency investment?

2008 2009 20100%

20%

40%

60%

80%

100%

15%

44%

14%

27% Don't know

Allowed longer payback period 5 years ago

Allowable payback pe-riod has not changed

Will allow longer payback period to-day

How does that compare to what would have been allowed 5 years ago?


Most popular efficiency measures are lighting retrofits and operational changesSwitched to

en-ergy effi-cient

lamps, bal-lasts, or fix-tures

Edu-cated facili-ties

opera-tions staff

Edu-cated build-

ing oc-cu-

pants

Ad-justed con-trols to re-duce time that

heat-ing/AC runs

In-stalled oc-cu-

pancy or

day-light sen-sors

Re-placed inef-ficient equipment

before end of useful

life

Up-graded ex-isting build-

ing man-age-ment sys-tem

In-creas

ed fre-

quency of

moni-toring con-

sump-tion

Nego-tiated en-ergy con-tracts with sup-pliers

At-tended or sent

staff to en-ergy man-age-ment semi-nars

In-stalled or ad-

justed light-ing

timers

In-creas

ed pre-ven-tive

main-ten-ance schedules

In-stalle

d vari-able

speed/vari-able fre-

quency

drives (VSD/VFD)

In-stalle

d en-

ergy-sav-ing

glass in

win-dows

Partic-ipated

in de-

mand re-

sponse pro-grams

0% 10% 20% 30% 40% 50% 60% 70% 80%

72%

63%

61%

56%

40%

36%

33%

30%

29%

28%

27%

25%

25%

19%

19%

Which measures has your company adopted to reduce energy costs?

Note: The 15 most popular measures of 33 included in the survey are listed above


48

Lighting and smart building technologiesselected as promising by all roles


Lighting technologies

Smart building technology

Solar photovoltaics (PV)

Electric and plug-in electric vehicles

Nuclear power

Concentrating solar power (CSP)

Stationary electric energy storage

Carbon capture and storage for power plants

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Facility Manager

Executive

Overall

Which technology do you expect to have the greatest performance-price ratio improvement over the next ten years (select up to 3)?

Executive = CEO, CFO, COO, VP of Real Estate, VP of Facilities

johnson controls 2010 energy efficiency indicator webcast

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