Business Case Calculator for Energy & Water Efficiency Improvements

INSTRUCTIONS

Name of Hospital/Facility: Enter facility name

Date: Date

Purpose of tool: To help facility managers make a business case for energy and water efficiency improvements

This tool is:

*A resource to help make the business case for undertaking a selected efficiency project.
*Able to provide results that are only as good as the information entered into it.

This tool is NOT:

*A guarantee of project payback.

Basic instructions:
*Data can only be entered in white cells.
*Data in any boxes of any color are calculated for you, and are locked/protected.

Steps To Get Started

1) Save the template file on your hard drive using a new name.
2) Enter your facility name in cell B3.
3) Enter the date in cell B2.
4) Go to the Bus. Case Calculator tab.
5) Fill in all white cells to get the best results.

How to Use Information This Tool Produces

1) Show decision-makers the process, explain the numbers, and highlight the level of payback and efficiency upgrades.
2) Plan for a long-term energy project through projections of energy cost escalation.

General Notes
*If a data point is not known (e.g., ongoing support cost), it is acceptable to use a best guess estimate.
*However, try to obtain as much supported data as possible to obtain more definitive results.
 Business Case Calculator for Energy & Water Projects

Project Name Sample Project

Initial investment $100,000

Implementation costs $20,000

Other initial costs $7,000

Available incentives (optional) $1,000

Total project initial cost $72,000

Ongoing support costs $1,000

Estimated annual electricity cost savings $19,000

Estimated annual natural gas cost savings $0

Estimated annual water cost savings $20,000

O&M cost savings $2,000

Additional annual savings $300

Expected project life (years) 10

Cost of capital (%) 11%

*Electricity cost escalation (%) 1.9%

*Natural gas cost escalation (%) 3.2%

Water cost escalation 0.0%

**Corporate tax rate (%) 33%

Simple payback (years) 3.08

Discounted payback (years) 4.02

NPV $ 118,470.43

IRR 0.30

Impact on bottom line (Year 1) $ 20,301.00

*Default values based on Energy Information Administration Energy Outlook 2010-30 averages
**Default value based on estimated corporate tax rate of 33%
 General Notes:
Enter data ONLY in white cells.
Shaded green boxes are not locked and can be modified by the user.
These factors are the best available projections produced by the Energy
Information Administration.
Blue shaded boxes are calculated automatically based on your input in
the white boxes and the factors in the green boxes.
ROI Analysis- Business Case Calculator for Energy & Water Efficiency Improvements

Cash Flow and ROI Statement

YEAR
BENEFITS
0 1 2 3
Electrcity cost savings $19,000 $19,361 $19,729
Natural gas cost savings $0 $0 $0
Water cost savings $20,000 $20,000 $20,000
Operations and maintenaince cost savings $2,000 $2,000 $2,000
Additional annual savings $300 $300 $300

Total annual benefits $41,300 $41,661 $42,029

Costs Year 0 Year 1 Year 2 Year 3
Total $127,000 $1,000 $1,000 $1,000

Benefits Year 0 Year 1 Year 2 Year 3

Annual benefit flow ($127,000) $40,300 $40,661 $41,029
Cumulative benefit flow (127,000) (86,700) (46,039) (5,010)

Discounted Benefit Flow Year 0 Year 1 Year 2 Year 3

Discounted costs $127,000 $901 $812 $731
Discounted benefits 0 37,207 33,813 30,731
Total discounted benefit flow (127,000) 36,306 33,001 30,000
Total cumulative discounted benefit flow (127,000) (90,694) (57,692) (27,692)

Initial Investment Year 0 Year 1 Year 2 Year 3

Initial investment $100,000
Implementation costs 20,000
Ongoing support costs 1,000 1,000 1,000 1,000
Incentives/rebates (1,000)
Other costs 7,000
Total costs $127,000 $1,000 $1,000 $1,000

ROI Measures
Cost of capital 11%
Net present value $118,470
Internal Rate of Return 30%
Simple Payback (in years) 3.08
Discounted Payback (in years) 4.02