Trade Ally Network Northwest

Sales Skill: Energy Efficiency Opportunities in the COVID-19 Recovery

September 16, 2020 | Trade Ally Network NW

With the first several months of the pandemic behind us, you may be thinking, where does my business go from here? Some industries are booming, and others are not—how do you know which business sectors may have the most viable customers for you?

An in-depth review by BPA and Trade Ally Network NW highlights which business sectors are most and least likely to invest in energy efficiency upgrades in the COVID-19 recovery.

The Big Picture

Public and private sector organizations with more capital and that require less human contact are more likely to invest in new technology at this time. These companies often operate online or with remote workers, such as storage, warehouse or shipping operations. Similarly, there is high potential among organizations that have capital, and also require people to be in close proximity. These may include essential retail like grocery stores, government buildings, religious institutions, and schools.

Public and private sector organizations with less capital and more people in proximity may have less potential for investment. Businesses that will need more economic and other support are those that have lost revenue, including those in the restaurant, entertainment, and hospitality sectors, as well as non-essential retail. These are businesses that rely on having people in close proximity, but may not have the cash flow or available capital to implement upgrades or new technologies needed for health and safety. They may be more reliant on incentives or other financial supports.

Key Findings Highlight Sectors, Financial Capacity and Proximity to People

The public sector and institutions may have more ability to invest than the private sector.

  • Public institutions are historically resilient, so even when private money runs out, government funds may still be available. In fact, we’ve seen how often government is able to maintain or increase spending when the economy sees a decrease in private spending.
  • Military bases, and federal or municipal buildings, receive varied funding sources that are not reliant on consumer spending. This means their capital resources are more resilient in the face of market changes. Public sector buildings may be more stable financially and less likely to reduce system maintenance or defer maintenance due to fiscal challenges.
  • Institutions, such as education, community services, culture, politics and religion, have different funding sources. A church may rely on grants, donations, and tax exemption, while schools receive funding from property taxes or federal or local funding packages.

There may be a temporary downturn in construction projects in the next 6-12 months.

  • Nonresidential construction is one of the last segments of the economy to enter recession because contractors continue to work down their collective backlog. Now as these projects are finishing up, there may be a lag in new project starts, which could result in job losses.
  • Projected growth in construction for 2020 has been revised to an 11% decline. According to the AIA, the sharpest decline is predicted in the commercial construction sector.
  • Additional issues may exist with the upstream supply chain. For example, lighting fixture manufacturing relies heavily on Chinese imports, which account for 65% of domestic demand.

Customers are interested in HVAC improvements, specifically air circulation and ventilation.

  • Ventilation is key. Adopting more efficient HVAC systems may contribute to a reduction in airborne particulate exposures.
  • HVAC improvements are especially relevant in the category of high capital and high proximity—such as essential retail/grocery stores and government buildings, to name a few. This is because they have the capital to invest in improvements, and due to necessary group gatherings, there is more urgency for safety and gaining a competitive edge in business to make these improvements.

Industries where COVID-19 has severely affected revenue may not have money to invest, even when the economy recovers.

  • Among the many business types needing additional financial support are hotels, restaurants, entertainment, gyms, retail, and auto sales.
  • The financial impact on healthcare has been severe, due to lost revenue from cancelled surgeries and increased costs from purchasing PPE and hiring additional workers. This sector could benefit greatly from building improvement incentive programs.

Business Implications

So, who is more likely to invest in energy efficiency?

  • Essential industries with high numbers of people in proximity, due to the urgency of creating safety and security for large numbers of people.
  • Those with high capital and a low density of people.
  • Public industries with reliable funding sources.
  • Businesses with capital constraints will be more likely to need incentives.

Trade allies have a huge opportunity to take advantage of an increased focus on ventilation, particularly in industries that are both essential and require people to be in close proximity. And with new limited-time promotional HVAC incentives offered by participating utilities, trade allies can help customers save even more on eligible energy efficiency projects. For assistance with identifying project potential and business opportunities in your area, contact your local utility or your regional field specialist. View new incentives from participating utilities here.

Category: Best Practices Business Development

Tags: business development new business sales skills