Rebound in Energy Efficiency Spending

Those looking for signs that the U.S. economy is rebounding can find encouragement in the fourth annual Energy Efficiency Indicator released today by Johnson Controls, Inc., the global leader in delivering products, services and solutions that increase energy efficiency in buildings.

A survey of more than 1,400 North American executives and managers responsible for making investments and managing energy in commercial buildings found that planned investment in energy efficiency is expected to rebound in 2010. Following a decline last year, the survey found that 52 percent (up from 46 percent) are planning to make capital investments in energy efficiency and 60 percent are planning (up from 55 percent) to make operating budget expenditures in efficiency programs over the next twelve months. However, a significant number of the business leaders surveyed (38 percent) said that the largest barrier to making energy efficiency investments is limited capital availability.

"Our research shows attention to energy efficiency is continuing its growth among business leaders," said Dave Myers, president of Johnson Controls Building Efficiency business. "Commercial buildings consume 18 percent of the energy and 35 percent of electricity used in the U.S. each year. A focus on improving energy efficiency in existing buildings is the best way to address carbon reduction goals being set by a growing number of organizations."

The Energy Efficiency Indicator (EEI), in its fourth year, tracks energy management priorities, practices and investment plans among decision makers responsible for commercial buildings and their energy use. Johnson Controls is currently conducting the survey in other parts of the world including China, France, Germany, India, Poland, Spain, and the United Kingdom, with results to be released at events during the summer of 2010.

The North America research was conducted by Johnson Controls in association with the International Facility Management Association (IFMA) and the American Society of Healthcare Engineering (ASHE). A total of 1435 decision-makers were surveyed in North America between February 23 and March 15, including CEOs, CFOs, real estate leaders and facility managers from a range of organizations including small businesses, global corporations and the public sector.

"This research helps our members to compare their priorities and energy management efforts with those of their peers," said Donald Young, vice president of communications for IFMA. "This year’s results demonstrate that workplace professionals not only play a major role in controlling operational costs, but also are among the most important decision makers when it comes to managing an organization’s carbon footprint and public image."

According to this year’s survey, 65 percent of business leaders say they are paying more attention to energy efficiency than they were one year ago; 84 percent of respondents say that energy efficiency is a priority for new construction and retrofit projects planned for this year.

The most important factor influencing energy efficiency decisions is energy cost savings, with 97 percent of respondents identifying it as significant. Sixty four percent expect energy prices to rise in 2010. Overall the average expectation of respondents is a seven percent increase in the combined price of energy over the next 12 months.

The next most important factors influencing energy efficiency decisions are enhanced public image (63 percent), government and utility incentives (62 percent), and reducing greenhouse gas emissions (62 percent). This climate concern is growing in importance, up from 57 percent that considered greenhouse gas reduction a significant factor in 2009.

Seventy-five percent of decision makers believe significant legislation mandating energy efficiency and/or carbon reduction is likely within the next two years, compared to 85 percent in 2009 and 76 percent in 2008.

"Interestingly, despite a slight drop in expectations for climate legislation this year, more organizations are setting voluntary carbon reduction goals," said Clay Nesler, vice president, Global Energy and Sustainability, Johnson Controls. "Organizations are using a variety of strategies to meet these commitments, but the vast majority identify energy efficiency in buildings as their top climate strategy."

When asked what specific energy efficiency improvements have been implemented over the past 12 months, the most popular are those with low capital cost and/or a rapid return on investment. The survey shows that 72 percent switched to energy efficient lighting; 63 percent trained facilities staff; 61 percent educated building occupants to save energy; 56 percent made set point adjustments; 40 percent installed occupancy or daylight sensors; and 33 percent upgraded building controls.

Executives were also asked this year to predict what energy-related technologies would see the greatest improvement in performance-to-price ratio over the next 10 years. The top picks were lighting (51 percent), smart building technology (44 percent), solar PV (38 percent), electric and plug-in hybrid vehicles (28 percent) and nuclear power (22 percent).

To access the Energy Efficiency Indicator press kit, visit the Johnson Controls media center located at

Johnson Controls is a global diversified technology and industrial leader serving customers in over 150 countries. Our 130,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful.

Johnson Controls Building Efficiency is a leading provider of equipment, controls and services for heating, ventilating, air-conditioning, refrigeration and security systems for buildings. Operating from 500 branch offices in 150 countries, we deliver products, services and solutions that increase energy efficiency and lower operating costs for over one million customers. We are involved in more than 500 renewable energy projects including solar, wind and geothermal technologies. Our solutions have reduced carbon dioxide emissions by 13.6 million metric tons and generated savings of $7.5 billion since 2000. Many of the world’s largest companies rely on us to manage 1.5 billion square feet of their commercial real estate.

IFMA is the world’s largest and most widely recognized international association for professional facility managers, supporting more than 19,000 members in 78 countries. The association’s members, represented in 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. Formed in 1980, IFMA certifies facility managers, conducts research, provides educational programs, recognizes facility management certificate programs and produces World Workplace, the world’s largest facility management conference and exposition.