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)
5 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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?
6 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
7 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
RESPONDENT PROFILEEnergy Efficiency Indicator
2010 North America Results
8 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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.
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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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
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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1435 total respondents in North America
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
2010 North America Results
12 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
13 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
…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
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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?
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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?
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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?
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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INVESTMENT PLANS & FINANCIAL CRITERIAEnergy Efficiency Indicator
2010 North America Results
20 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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…
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
Large and public organizations are most likely to invest in efficiency; Retail sector lags
24 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
25 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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?
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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?
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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?
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
PRACTICES & TECHNOLOGIESEnergy Efficiency Indicator
2010 North America Results
29 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
31 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
Consideration levels for renewable energy technologies fall in 2010
33 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
34 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
35 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
Panel Discussion
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
38
Questions can be submitted to the panel by clicking “ask question” below
APPENDIXAdditional Detailed Findings
39 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
Who we surveyed
1435 total respondents in North America
9%8%
16%
4%
8%4% 14%
13%
5%
19%2007 2008 2009 2010
0200400600800
1000120014001600
12491146
1365 1435
North American EEI Respondents
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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?
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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?
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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?
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
45
The recession has had a mixed impact on levels of efficiency investment
46 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
4 to less than 6 years
3 to less than 4 years
2 to less than 3 years
1 to less than 2 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?
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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
Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
48
Lighting and smart building technologiesselected as promising by all roles
49 Energy Efficiency Indicator – North America 2010Copyright 2010 Johnson Controls, Inc.
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