Cfo Calculator

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ENERGY STAR CASH FLOW OPPORTUNITY CALCULATORIntroduction

Released on 12/18/2002

IMPORTANT NOTICE: The macros imbedded in this spreadsheet must be enabled to use this calculator. To enable the macros using Microsoft Excel 2000, 2002, or 2003

Macro > Security Level and select the "medium" (recommended) or "low" security level (not recommended as this "low" macro security option enables macros without givi

enable/disable the macros). If you are using Microsoft Excel 2007, click Developer > Macros and select Disable all macros with notification option. Note that you will need

applications after enabling the macros and reopen this worksheet. You must enable macros if and when prompted by the program upon opening. CAUTION: Macros in oth

carry harmful programming codes. Do not enable macros from sources you do not trust.

This spreadsheet is designed to work with Microsoft Excel 97 or later versions for Windows OS. It may not work properly with earlier versions. It is best viewed with 1024x7

resolution.

DISCLAIMER:ENERGY STAR does not guarantee that your project will generate the results presented herein. An investment grade audit performed by a qualified engi

required to determine the actual size of your savings opportunity.

Version 2.0 - 2010 - BETA VERSION

Developed by The Cadmus Group, Inc. and Catalyst Financial Group, Inc.,under contract with the U.S. EPA, 2009

CASH FLOW OPPORTUNITY CALCULATOR

Please send any comments to Katy Hatcher, ENERGY STAR National Manager Hatcher.Caterina@epa.

162998982.xls.ms_office/Intro

As the numbers that you will use in the calculator are your own estimates,

ENERGY STAR does not guarantee that your project will generate the results presented herein.

See full disclaimer.
mailto:[email protected]?subject=CFO%20Calculator%20Questionhttp://www.energystar.gov/index.cfm?mailto:[email protected]?subject=CFO%20Calculator%20Question


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ENERGY STAR CASH FLOW OPPORTUNITY CALCULATORInstructions

ENERGY STAR

CASH FLOW OPPORTUNITY CALCULATOR v2.0

INSTRUCTIONS

HOW TO USE THIS WORKSHEET

The purpose of this spreadsheet is to help decision-makers quantify the costs of delaying an energy efficiency project by addressing three critical questions:

- How much new energy efficiency equipment can be purchased from the anticipated savings?

- Should this equipment purchase be financed now or is it better to wait and use cash from a future budget?

- Is money being lost by waiting for a lower interest rate?

The Cash Flow Opportunity Calculator spreadsheet is easy to use, intuitive, and follows the logic outlined above. It consists of 6 worksheets, including four data

tabs, an instructions tab, and a summary report tab. Each data tab addresses a specific calculation, the results of which are used in subsequent worksheets. Note

that the data entry tabs can be used independently, should you wish to use only one of the four calculations. A description of each of the data and summary

report tabs follows:

Data Entry TabThe purpose of this tab is to estimate the amount of energy waste (or potential savings) buried in your utility bills. This amount is calculated

in dollars rather than kWh or therms. This amount becomes the cornerstone of the subsequent spreadsheet calculations. You will need to know the amount of

your current energy spend (utility bills). This tool can be personalized to identify the project(s) being analyzed by enter ing your organizations name and

specifying the projects being evaluated.

Because energy is measured in different ways by different organizations, this tab presents a variety of profiles found in the Type of Analysis window (ROW 5) in

an effort to offer a selection of profiles that best suits your organization. On the Type of Analysis window, choose the de scription that best fits your project.

The User Generated Categories is a simple generic option that provides two category ROWs and the ability to create any labe ls you wish that best describe the

projects (i.e., individual addresses or groups of properties). The Benchmark Results from EPA's Portfolio Manager option allows you to input the data directly

from ENERGY STARs Portfolio Manager. Green Building Categories uses the categories directly from LEED EB. Water or Wastewater Treatment Plants

allows you to input data based on million gallons per day, and By Efficiency Project Type is technology -driven (Lighting, Heating and Cooling, Retro-

commissioning, etc.) and Manufacturing Facility allows you to input data based on production, such as pounds of product. In all instances, you can overwrite

the category names to best describe your project.

162998982.xls.ms_office/InstructionsENERGY STAR does not guarantee that

your project will generate the results presented herein. See full disclaimer.

Printed on 8/8/2013 5:28 AM

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http://www.energystar.gov/index.cfm?


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Estimate the percentage of the energy savings that will be realized by the energy efficiency project to be applied against your utility bills. These savings can be

leveraged by financing the project; this number becomes the source of repayment and is used in the next tab.

Investment Values TabThis tab is like a reverse financial calculator. It uses the savings estimate from the Data Entry Tab to calculate the amount of

equipment and services that could be installed and paid for using only your current and future energy savings.

Cash Flow TabHere you compare the cash flow consequences of two decision points: (1) installing the energy project now and us ing future energy savings to

cover the financing costs versus (2) postponing the installation until funds become available in a future budget. Whichever decision generates the larger Net

Present Value is generally accepted to be the better financial decision. The results of this comparison are often counter-intuitive.

Interest Rates TabThe financing that offers the lowest interest rate is not always the best deal. The lowest rate offering may not be immediately available

(typically the case with most bonds and revolving loan funds). This tab allows you to compare two different interest rate offerings by adding the impact of the

cost of delaying the installation (lost savings opportunity) caused by waiting for the lower interest rate financing. This helps calculate how long you should wait

for a lower interest rate offering before the lower interest rate becomes the more expensive financing option.

Summary TabThis tab generates a report that includes all of the information covered in the data tabs.

If you are interested in showing only one tab's results, you can use the Excels Print function to print any one page of in terest rather than printing the entire

report.

For more sheet specific instructions, please click the Help button on each tab to open the Help section under each page.

ADDITIONAL INFORMATION

ENERGY STAR Portfolio Manager

EPA developed Portfolio Manager to help businesses continually track and compare energy use for all facility types, which is critical to successful energy

management. Portfolio Manager also provides a comparative 1-to-100 rating of energy use for the following facility types:

Bank/Financial InstitutionsCourthouses

Hospitals (acute care and childrens)

Hotels and Motels

House of Worship

K-12 Schools

Medical Offices




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ENERGY STAR CASH FLOW OPPORTUNITY CALCULATOR

Instructions

Residence Halls/Dormitories

Retail Stores

Supermarkets

Warehouses (refrigerated and non-refrigerated)

Wastewater Treatment Plants

To find out more about Portfolio Manager, please visit www.energystar.gov/benchmark.

If you would like to find out if your buildings are el igible for benchmarking, please visit

http://www.energystar.gov/index.cfm?c=eligibility.bus_portfoliomanager_eligibility

If you have already benchmarked your buildings, aggregate your data from the EPA ENERGY STAR benchmarking tool into quartiles and enter them into this Cash

Flow Opportunity Calculator. (Enter total square feet and total utility expenditures for each quartile in the Data Entry worksheet.)

Internet Presentations

You can view one of our self-guided Internet presentations to learn more about this topic. Please visit

http://www.energystar.gov/index.cfm?c=business.bus_internet_presentations for more information.

IMPORTANT NOTICE & CONTACT INFORMATION

This calculator, like all of the ENERGY STAR program's products and services, is available as a public service. EPA makes no representations of its accuracy, only of

its intention. Should you have any comments, we kindly request that you notify:

Katy Hatcher, ENERGY STAR National Manager, at [email protected].




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Instructions

DETAILED INSTRUCTIONS

Section 1Data Entry Tab

This tab is where you enter basic information about your organization. The objective is to estimate the potential annual energy savings based on a simple

evaluation of your organizations profile. Note that yellow CELLs require data/information, which you provide, while blue CELLs contain formulas, which cannot

be overwritten.

1) Enter the name of your organization in CELL D4

2) In ROW 5, choose between five alternative approaches to enter the organizations data based on which scenario best describes the nature of your project. You

will notice that the table will show between 2 and 5 rows of data entry points, depending on the approach you choose.

User Generated CategoriesThis simple approach gives organizations a general picture about their energy use and potential savings. You can enter specific

property addresses or group properties together. If you are unsure how to group your properties, you might start by thinking ofthem in two categories: more

energy efficient versus less energy efficient. After all, it is usually easier to save energy in the less energy-efficient properties.

Using Benchmark Results from ENERGY STARThis is a good approach for ENERGY STAR partners using EPAs benchmarking tool, Portfolio Manager. This

approach breaks the data into four quatiles in terms of energy consumption: the bottom quartile is high energy consumers (ratings of 24 or below), the third

group is below average (ratings between 25 and 49), the second group is above average (ratings between 50 and 74), and the top group (ratings of 75 or above)

consists of the best performing buildings. The quartile-based method is a more detailed approach as it requires organizations to enter four sets of data instead of

the two sets in the User Generated Categories approach. If you have benchmarked your buildings, use this tab to enter the results into the corresponding

quartiles. If you have not completed the benchmarking exercise, you can enter your best guess for square footage and cost per square foot for each quartile.

Green Building Categories (LEED EB)Energy efficiency and indoor air quality are critical components of green building projects, and they are required by the

U.S. Green Building Council (USGBC) to obtain Leadership in Energy and Environmental Design (LEED) certification. One ongoing concern is how to pay for green

improvements. Energy and water savings (and others) may be captured from current operating budgets and used to pay for the needed equipment. This

approach gives you the opportunity to enter data in the familiar LEED categories: Sustainable Sites, Water Efficiency, Energy & Atmosphere, Materials &

Resources, and Indoor Environmental Quality.

Water or Wastewater Treatment PlantsWater and Wastewater facilities measure energy consumption in different ways, the most common being Million

Gallons per Day (MGD) for process facilities and cost per square foot for administrative buildings.

Energy Efficiency Project TypeThis option allows you to input the data and projected savings based on the type of technology being installed. The sample

categories include Retrocommissioning, Lighting, Supplemental Loads, Air Distribution Systems, and Heating and Cooling (see the ENERGY STAR Building Upgrade




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anua or more e a s on ese ca egores, own oa a e rom p: www.energys ar.gov n ex.c m c= usness. us_upgra e_manua .

Manufacturing FacilityManufacturers often use energy intensity metrics based on a unit of production to track energy use. Common metrics include:

BTU/pound of production, BTU/part, kWh/finished product. This option allows you to use a production-based energy intensity metric for either the entire

facility or a process line for which the project is being implemented.

All category names in the Types of Analysis can be overwritten to reflect the project you are analyzing.

3) In ROW 6, Values, enter the total annual energy costs along with other supporting data (i.e., square feet, million of gallons per day, etc.) for each of your

groups.

Energy unit costs (Column F) will automatically be calculated. If you do not know your organizations details, you may populate the data fields with samplevalues by clicking on the Sample Values menu. User Defined Values option is prepared for you to enter your own values and are highlighted in yellow. You

can overwrite the sample data with actual data at any time.

The Savings Target is your best estimate of typical savings. Many organizations find that 10-20 percent savings can be obtained through behavioral

modifications and consider 20 to 35 percent as a realistic overall target for most energy efficiency projects. Enter your best guess; remember that these target

amounts can be easily changed later to reflect alternative estimates.

In all cases, enter your organizations total energy costs (Electricity, Natural Gas, Steam, Chilled Water, Fuel Oil *No.1, No.2, No.5, and/orNo.6], Coal [anthracite],

Coal [bituminous], Coke, Diesel [No.2], Propane, Liquid Propane, Kerosene, Wood, and Other) by category. When possible enter the square feet under

management by category (this may not be always appropriate, for example LEED: EB O&M categories may not be conducive to measuring in square feet and

water/wastewater facilities measure in million gallons per day).

You can personalize all of the approaches in this program by creating your own category names, which may be helpful when presenting the Cash Flow

Opportunity Calculator results to others. For example, personalized labels can reflect facility groups (i.e., North Campus or Beach Properties), addresses (i.e.,

123 Main Street or 5 Broadway), or any labels that work for your organization. These names will appear in the reports generated by the program. Simplyoverwrite the names shown in the Column labeled Category Name (Column C).

To switch between approaches, use the drop down menu labeled Select Data Source (CELL C5). You may populate this model with the sample values by clicking

on the Sample Values menu. Yellow cells indicate that data entry is required; these cells will change to white after data have been entered. Blue cells are

protected and can only be changed by modifying the input data. CAUTION: Any user-entered data will be lost when selecting the sample values.

Section 2Investment Values Tab

ROWs 5 and 6 pull forward the summary details you entered on the earlier Data Entry Tab.

This worksheet operates like a reverse financial calculator and will help you estimate the amount of equipment that could be financed with the future energy

savings.

1. In the line Assuming an interest rate of (CELL F10), enter the interest rate you think will reflect the cost of financing your project. The actual rate will depend

on whether the financing is tax-exempt or taxable, your organizations credit rating, dollar amount, and term of the transaction.

2. In the line Assuming a term of (CELL F11), enter the financing term that you think will be acceptable to your organization and a lender. Typically this will be




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Instructions

determined by the useful economic life of the equipment installed. The financing term should be longer than the simple payback of the equipment to generate a

positive cash flow.

3. In the Savings used to pay energy investments CELL F12, enter the percentage of the savings you would be willing to commit to cover the cost of financing

these energy efficiency improvements. If you are working with an Energy Services and Products Provider, you may be able to obtain a guarantee that these

savings will be realized, allowing you to use a higher percentage of the projected savings. The percentage you choose depends on the type of equipment

installed, the savings realized, political environment, etc. Most organizations use between 85 percent and 95 percent.

Push the green Calculate button to determine the amount of money that is buried in your utility bill, based on the estimates stated above, which then appears

in green (CELL E15). Bear in mind that an investment grade audit done by a qualified engineering company will be required to determine the actual size of your

opportunity. The cost of this audit can normally be included in the financing and recovered through the savings.

The projects simple payback is also shown at the bottom of the worksheet.

NOTE: The "Use Sample Values" button will reset the calculator to the sample values in CELLs F10 through F12.

Now that you know how much equipment may be acquired with your existing operating and capital budgets, the next step involves timing.

Section 3Cash Flow Tab

This spreadsheet helps quantify your decision on whether it is a better to pay as you go and wait until funds are available in future budgets or pay as you use

by financing an energy efficiency project immediately using a third-party lender and capture the savings sooner.

It is true that interest payments can be avoided altogether by including these energy projects in future capital or operating budgets. However, there is a cost of

delay to be considered when postponing these projects. This spreadsheet provides a discounted cash flow analysis to help determine the better business

decision: (a) deferring the installation until a future budget or (b) financing the installation today. Often, the energy efficiency savings lost in one year exceed the

total amount of the financing costs throughout the entire financing period.

Data Carried Forward From Earlier Worksheets

In the top left section, the Project cost (CELL G4), Interest rate (CELL G7), and Financing term (CELL G 8) are imported from the prior Investment Values

worksheet. The Simple payback of the equipment to be installed (the time it takes to recover the project cost from savings, including financing costs) is also

carried forward and entered into CELLs G5 (years) and G6 (months).

These numbers can be overwritten if you wish.

New Data Entry

In the line Year(s) postponed (CELL G9), enter the number of years the project will be delayed if you have to wait and include it in a future budget; for example,

if the project will be included in next years budget, use the number 1.

In the Project cost increase due to postponement (CELL G10), enter the percent you believe the project costs will increase (labor and material costs, lost




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rebates, etc.) caused by delaying the project

In the line Estimated energy cost increases in Year 2 (CELL G11), enter the percent you believe your energy costs will increase next year (Year 2).

In the line Annual increase in energy costs after Year 2 (CELL G12), enter the estimated amount your energy costs will increase after next year (Year 2), in

percent.

In the line Estimated energy savings in first year (Year 1) (CELL G13), enter the percent of the savings you will be able to capture during the first year. The

amount of the savings will vary based on the installation time needed to complete the project.

You can modify all these numbers by overwriting them or start from scratch by clicking on the "Sample Values button at the top of the page.

Comparison Tables (Option AFast Track Financing vs. Option BWaiting for Cash)

The tables starting at ROW 18 represent the cash flow consequences of the two choices: Option Ainstalling today using financing, or Option Bdeferring the

installation until funding becomes available in a future years budget. The calculator allows up to 26 years of cash flows to be discounted back to their Net

Present Values for each of these options (CELLs G13 and K13), using the Interest Rate stated in CELL G7 as the discount rate for both options. Cash flows are

limited to the finance term plus one year.

The results of these Net Present Value calculations are found on ROW 15. Whichever option generates the greatest present value dollars is considered the better

financial decision.

The graph at the top right is a visual representation of the cash flow impact of deferring the installation versus financing it now. It graphically reflects the impact

of writing a big check and slowly fill in the hole with the savings over time versus using third-party financing immediately to level out the projects cash flow.

This spreadsheet is a good sensitivity analysis tool because it allows you to make what if calculations by changing the paybacks, interest rates, and terms to

ensure that your financed energy efficiency project always generates positive cash flow. It also is useful when structuring your financing should the energy

savings be insufficient to cover the repayment of the entire project. We urge you to start with the maximum financing term your organization finds acceptable

and then experiment with the average simple paybacks to leverage the energy savings fully. Slow and fast payback projects should be blended to obtain this

average number.

Section 4Interest Rates Tab

If the prior calculation confirmed that it is a better decision to finance and install now rather than wait for the availability of funds in a future budget, the next

most frequently asked question is: Should we wait for a lower interest rate (like a bond or a subsidized loan program) or finance it now at a slightly higher rate

that is readily available?

Instinct suggests that financing with the lower interest rate is the best alternative. However, to determine which finance offering represents the better deal,

additional considerations need to be addressed:

Are there any additional fees or closing costs associated with each financing alternative? For example, bonds require extensive (and expensive) legal opinions,

insurance, etc. For public sector organizations, tax-exempt lease-purchase agreements have few additional costs, but the interest rate may appear to be a little




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Instructions

higher.

Alternative financing may be immediately available. Floating a bond typically is a slow process.

In addition, public sector General Obligation bonds are considered debt (a capital budget event) and typically require voter approval. Some alternative financing

choices may be treated as non-capital budget events (i.e., tax-exempt lease-purchase agreements and performance contracts). Asking the voters to approve any

expenditure (including profitable ones) may add both real and political costs to the decision.

Opportunity Costs. By definition, delays in installing energy efficiency projects mean that the utility bills are higher than need be. Once paid to the utility, these

dollars, which could be used to pay for the financing costs, are lost forever.

The question becomes: At what point is paying a higher interest rate a better financial decision than waiting for a lower-cost financing? The Interest Rates

worksheet helps quantify this question by factoring in the energy opportunity costs.

Readily available financing means that the project can be installed immediately. The longer you wait, the more energy efficiency dollars are being lost. Holding

out for a lower interest rate often proves to be a more expensive decision than financing immediately at a higher rate.

Data Points

The following data points are pulled forward from earlier worksheets:

Interest rate of immediate financing (CELL G4), Cost of the equipment (CELL G6), Simple payback (CELLS G7 and G8), Potential annual savings (CELL G9),

Term of the financing (CELL G10)

These amounts can be overwritten.

Entering Data

Enter the Interest rate of the lower financing in CELL G5 (lower than the number entered in CELL G4.).

The "Lower rate interest savings" (CELL G11) calculates the present value benefit of entering into one interest rate financing versus another. Assuming equal

borrowing terms and starting dates, it computes how much money the lower interest rate financing will save over the higher interest rate. Because the energy

opportunity losses will accrue every month the installation is delayed, a "Break-Even Point" can be calculated by dividing the present value benefit of the lower

interest rate by the dollars lost every month the installation is delayed. The Break-Even Point (CELL G12) is expressed in months and confirms how long one can

wait before the lower interest rate costs more in real dollars. Once past the break-even point, the lower interest rate becomes the more expensive alternative.

Note the cost of waiting for one year (CELL M17) and compare this to the original project cost (CELL G6). These opportunity losses may represent a substantial

percentage of the project cost (CELL G14).

Section 5 -- Summary Tab

This calculator automatically prepares a report containing all the salient spreadsheet data. Click the "Print" button to print a copy of this report.




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IMPORTANT NOTICE: The macros imbedded in this spreadsheet must be enabled to use this calculator. To enable the macros using Microsoft Excel 2000, 2002,

or 2003, please click on Tools > Macro > Security Level and select the "medium" (recommended) or "low" security level (not recommended as this "low" macro

security option enables macros without giving you the option to enable/disable the macros). If you are using Microsoft Excel 2007, click Developer > Macros and

select Disable all macros with notification option. Note that you will need to close all Excel applications after enabling the macros and reopen this worksheet.

You must enable macros if and when prompted by the program upon opening. CAUTION: Macros in other spreadsheets may carry harmful programming codes.

Do not enable macros from sources you do not trust.

This spreadsheet is designed to work with Microsoft Excel 97 or later versions for Windows OS. It may not work properly with earlier versions. It is best viewed

with 1024x768 pixels or higher resolution.

DISCLAIMER: ENERGY STAR does not guarantee that your project will generate the results presented herein. An investment grade audit performed by a

qualified engineering organization is required to determine the actual size of your savings opportunity.




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ENERGY STAR CASH FLOW OPPORTUNITY CALCULATORData Entry

Name

Select type of analysis

User Generated Categories SF

Annual energy

costs ($) - all fueltypes $/SF Savings target (%)

Potential annualsavings

Enter Category Name Here 0 $0 $0.00 0.00 $0

Enter Category Name Here 0 $0 $0.00 0.00 $0

Total SF

Total energycosts ($) - all fuel

types $/SFWeighted savings

target (%)Total potential

annual savings ($)

0 $0 $0.00 0.00% $0

ENERGY STAR does not guarantee that your project will generate the results presented herein. An investment grade audit performed by a qualifiedengineering organization is required to determine the actual size of your savings opportunity.

User Generated Categories - DATA ENTRY TABLE

Example organization name here

User Generated Categories

Values

162998982.xls.ms_office / Data EntryPrinted on 8/8/2013 5:28 AM

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ENERGY STAR CASH FLOW OPPORTUNITY CALCULATORInvestment Values

Enter Category NameHere

Enter Category NameHere

$0 $0 $0 $0 $0

$0 $0 $0 $0 $0

%

Year(s)

%

Year(s)

Month(s)

$0

$0.000

0

0Simple Payback

Consider bterm proje

Additional funds such as rebates, etc. (if available)

What Can $0,000 of Annual Savings Buy?

Assuming an interest rate of

0.0

0.00

0

Potential annual savings

Annual energy costs

Potential Annual Savings = Cash Flow Opportunity

INVESTMENT O

without increasing today's capital

$0

Assuming a term of

Savings used to pay energy/retrofit investments

Taken from operating funds, these savings could finance

energy/retrofit projects equal to

$0Project Cost

162998982.xls.ms_office/Investment Values





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ENERGY STAR CASH FLOW OPPORTUNITY CALCULATORCash Flow Projection

0 $

0 years

0 month(s)

0.00 %

0 years

0 years

0.00 %

0.00 %

0.00 %

0.00 %

Year Savings

Annual Cash

Flow Cumulative Cash Flow Savings Project Cost

Annual Cash

Flow Cumula

1 $0 $0 $0 $0 $0 $0

$0Net Present Value o

(Waiting for Cash)

Net Present Value of Option A

(Fast Track Financing)$0

These cash flow calculations are on a pretax basis.For purposes of this calculation, all cash f lows are being discounted at the interest rate indicated in cell G7 - financing paid monthly in arrears.

Estimated energy savings in year 1

Estimated energy cost change in year 2

Annual change in energy costs after year 2

Project Cost

including financing

Option B (Waiting for Cash)

$0

Option A (Fast Track Financing)

Project cost increase due to postponement

Interest rate

Year(s) postponed

COST OF DELAY and CASH FLOW

Project cost

Simple payback

Financing term

$0

$0

$0

$1

$1

$1

1

Cumulative Cash Flow Impact Comparison

Option A Option B Year

162998982.xls.ms_office/Cash Flow




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ENERGY STAR CASH FLOW OPPORTUNITY CALCULATORCost of Delay

0.00 % Month

0.00 % $0

$0 1 $0 $0 $0

0 year(s) 2 $0 $0 $0

0 month(s) 3 $0 $0 $0

$0 4 $0 $0 $0

0 year(s) 5 $0 $0 $0

$0 6 $0 $0 $0

$0 /month 7 $0 $0 $0

0.0 month(s) 8 $0 $0 $0

9 $0 $0 $0

10 $0 $0 $0

11 $0 $0 $0

12 $0 $0 $0

Important Notice

Amount lost in utility bills

Lower interest rate savings*

Break-Even Point

*Lower Interest Rate Savings number is calculated by taking the NPV of the differencebetween the two monthly payments (immediate versus lower financing rates),discounted at the lower interest rate.

Term of financing

Simple payback

Amount lost inmonthly utility

bills

Lower Interestrate savings

balance at end ofmonth

Interest rate of higher financing

Lower Interestrate savingsbalance at

beginning ofmonth

COST OF DELAY - Comparative Interest Rate Analysis

Potential annual savings

Interest rate of a lower financing

Cost of the equipment

162998982.xls.ms_office/Interest Rates




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ENERGY STAR CASH FLOW OPPORTUNITY CALCULATORSummary of Results

Name:

Selected Scenario:

SF

Annual energycosts ($) - all

fuel types $/SFSavings target

(%)Potential annual

savings

0 $0 $0.00 0.0 $0

0 $0 $0.00 0.0 $0

0 $0 $0.00 0.0 $0

Total SF

Total energycosts ($) - all

fuel types $/SF

Weightedsavings target

(%)

Total potentialannual savings

($)

Total $0 0.00% $0

0.0%

0.0%

0.0%

0.0%

CASH FLOW OPPORTUNITY CALCULATORVersion 2.0 - 2010 - BETA VERSION

1. How much energy efficiency equipment can be purchased?

Installing the equipment today means that the savings begin to accrue immediately. As long as the financing costs are lower than the energy savings,positive cash flow will be created.

When funds are not readily available, a frequently asked question is whether the energy saving project should be installed immediately and financed (pay-as-we-use philosophy), or if would it be a better decision to wait until the funds become available in a future budget (pay-as-we-go philosophy). Naturally,if we wait until money is budgeted, interest payments can be avoided altogether, but we lose the savings during this waiting period. To evaluate this decision,we use a discounted net-present-value analysis of the cash flows resulting from these two decision points using the financing terms and interest rate statedabove, along with the following assumptions:

SUMMARY OF FINANCIAL CALCULATIONS: User Generated Categories

User Generated Categories

3. Is money being lost by waiting for a lower interest rate?

Example organization name here

1. How much new energy efficiency equipment can be purchased from the anticipated savings?

This information has been generated by an Excel

spreadsheet developed by ENERGY STAR

called the Cash Flow Opportunity Calculator. The purposeof the calculator is to It helps address three critical questions about installing energy efficiency projects:

Our estimates indicate that, by using 0% of estimated savings and assuming financing costs of 0% (interest) over 0 years, the energy dollars saved can payfor: $0,000 worth of equipment, with a simple payback of 0 years and 0 month(s). Note that these funds are from existing operating (utility) budgets and notfrom the capital budget.

Redirecting funds from the existing utility budget by the Savings Target number, will free up about $0,000 per year, which then can be used to finance theenergy efficiency projects.

2. Should this equipment purchase be financed now or is it better to wait and use cash from a future budget?

This section reflects the cost per square foot by building category, as follows:

0

0

0

0

0

2. Finance now or wait to include in a future budget?

(b) Energy costs will increase next year by:

(c) Energy costs will increase an average thereafter and throughout the financing period by:

(d) The project will capture the first year energy savings due to estimated construction delays by:

(a) The project costs will increase due to increased labor and material costs by:

162998982.xls.ms_office/Summary





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ENERGY STAR CASH FLOW OPPORTUNITY CALCULATORSummary of Results

The cash flows when financing the project are estimated as follows:

Savings

1 $0 $0 $0 $0

$0

$0

Important Notice:

When comparing financing options, the speed with which the funds become available has a direct impact on the cash flows of the project. Naturally, thelonger it takes to access the funding, the more opportunity losses (unnecessary payments to the utility companies) will be incurred.

This calculation quantifies the financial benefit of the lower interest rate in Present Value dollars and then divides this benefit by the monthly opportunitylosses. The result is the number of months one can wait before the lower interest rate costs more real, Present Value dollars (the Break-Even Point).Once you pass the break-even point, the lower interest rate option becomes the more expensive transaction.

The results show the following:

If the installation is deferred for 0 year(s) (Option B), the net present value of the project after 0 years is:

Please send any comments to Katy Hatcher, ENERGY STAR National Manager [email protected].

For example, we are offered a 0% financing, which is immediately available. If we wait, we may be able to obtain financing at 0%.

This graph reflects the cumulative cash flow impactof financing the project now (Option A), versuswaiting until the funding is available in a futurebudget (Option B).

If the project is financed immediately (Option A), the net present value of the project after 0 years is:

Project Cost including financing

The net present value benefit of this lower rate (calculation is based on the obtaining funding for either financing on the same date) would be equal toapproximately $0,000. Because our project has a simple payback of 0 years and 0 months, we can wait no longer than 0.0 months, before the lower interestrate financing costs more dollars (in other words, the higher interest rate financing provides more cash!).

3. Waiting for a better interest rate

Annual Cash Flow Cumulative Cash Flow

This spreadsheet is a first step in estimating your energy efficiency opportunity and will help you determine whether or not pursuing these savings is a goodbusiness decision. It is an estimator and is not intended to provide exact, to the penny calculations. Our algorithms have been tested and will generateaccurate estimates, as long as the data entered are accurate. An investment grade audit done by a qualified engineering company will be required todetermine the actual size of your opportunity. The cost of this audit can normally be included in the financing and recovered through the savings. Higherlevel audits may be provided by qualified Service and Product Providers, or in some cases, your state energy office.

Energy efficiency projects can help prove the statement that time is money."

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Cumulative Cash Flow Impact Comparison

Option A Option B Year

Year

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Date post:	08-Aug-2018
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