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Making the Case: Top 10 Arguments for Insulation and Energy Efficiency Improvements

So you’ve undergone a plant or energy assessment, or you already know what needs to be done with your existing mechanical insulation system, and you have recommendations in hand. But now you have a new challenge: convincing your company to implement the recommendations, which frequently include increased focus on insulation maintenance or insulation upgrades.

Recent data from the Department of Energy’s Save Energy Now program indicates that barriers to implementing energy conservation definitely exist. Of recommended actions, 73 percent had paybacks of less than 2 years, while 40 percent had paybacks of less than 9 months. Only 8 percent of recommendations had paybacks of more than 4 years. Yet the implementation rate does not reflect an appreciation for those paybacks. Fewer than half of technical recommendations are typically implemented, and good practices in one unit or plant are often not widely diffused in organizations.1 Why?

We will continue to examine this problem in a future issue as part of our effort to arm insulation advocates with compelling data. Meanwhile, here are 10 of the most common objections and some arguments against them.

Barriers

These barriers are commonly erected against energy management plans and specifically mechanical insulation.

  1. Insulation and energy management need a “champion”
  2. People resources seem to always be a problem
  3. Energy is often not a line of specific accountability
  4. Energy is often not integrated with other business objectives
  5. There is slow uptake on energy savings projects and implementing technical or specification recommendations
  6. The damage or cost caused by reduced focus on mechanical insulation is often not identified
  7. Detailed knowledge on mechanical insulation systems is lacking
  8. Pressure from competing initiatives exists
  9. Good or best practices in one unit/plant are not easily and widely diffused in organizations
  10. Insulation is not considered part of continuous improvement

Counterarguments

  1. Insulation and energy management need a champion: The first thing to do is find a champion in your company—someone in management who understands the value of insulation and will be receptive to arguments for energy efficiency and advocate for implementing recommendations. Then make your case to him or her.
  2. People resources seem to always be a problem: If insulation is not properly installed or maintained, its value to the system is severely compromised. Insulation should be installed by an insulation contractor. To find one, go to www.insulation.org/membership/. Also, there are many more training opportunities available today than there were a few years ago, including NIA’s National Insulation Training Program (NITP).
  3. Energy is not a line of specific accountability: Utility costs are part of the bottom line too; energy costs must be accounted for somewhere in your company’s budget. Talk to your accounting department and find out how. It may be time to make an argument for more visibility of energy costs so they can be more easily tracked. In today’s cost-cutting environment, it should be possible to argue that to cut energy costs, it is first necessary to know what those costs are. Also, energy efficiency improvements may extend the life of equipment and therefore impact capital investment. For example, replacing insulation may also address issues such as corrosion under insulation, mold development, reducing cost of operations, increasing process productivity, and providing additional worker safety.
  4. Energy is often not integrated with other business objectives: This is closely related to the above argument. Saving on energy costs should be an objective of every company, for both budgetary and environmental reasons. Energy costs may be taken for granted as part of your company’s general operating expenses, but management should be receptive to including energy reduction as one of the company’s overall goals. Insulation helps save energy and reduce greenhouse gases—a simple way to make your company “greener,” a growing concern in the current climate. It can also improve large equipment productivity.
  5. There is slow uptake on energy savings projects and implementing technical or specification recommendations: Uncertainty in the price of energy makes implementation more necessary. Energy prices do vary, but the general trend has been upward in recent years. Making improvements that reduce energy usage is a good way to hedge against future energy price increases. With crude oil at over $130 per barrel right now, reducing energy usage should be among your company’s priorities. Insulation also has one the fastest Returns on Investments (ROIs) around, so the company will make their investment back quickly and keep saving day after day.
  6. The damage or cost caused by reduced focus on mechanical insulation is often not identified: Neglecting mechanical insulation can directly impact a plant’s productivity. Corrosion under insulation, mold, excessive energy loss, and increased cost of operations can result from not properly maintaining an insulation system. Corrosion and mold can lead to a loss of operational capacity or even a plant shutdown. Replacing or maintaining insulation may cost a little bit, but most companies will save much more. Not replacing or maintaining insulation is guaranteed to cost money. Pipe or equipment failure can often be traced back to maintenance issues, whether the company recognizes it or not.
  7. Detailed knowledge on mechanical insulation systems is lacking: There are plenty of tools available to help. Insulation.org offers training classes, technical articles and literature, a database of Certified Insulation Energy Appraisers, and a Guide to Insulation Products Specifications. The National Institute of Building Sciences’ (NIBS’) Mechanical Insulation Design Guide is an excellent source for mechanical insulation information and design/specification guidance (www.wbdg.org/midg). The NIA Member Directory (www.insulation.org) is a good way to find knowledgeable help. The 3E Plus® program, which eliminates the complexity of determining the appropriate insulation thickness, is available at www.pipeinsulation.org. The Department of Energy offers the Save Energy Now assessment program (www1.eere.energy.gov/industry/saveenergynow/assessments.html) and has a collection of helpful software tools at www1.eere.energy.gov/industry/bestpractices/software.html.
  8. Pressure from competing initiatives exists: Insulation has an incredibly short ROI, usually measured in months instead of years. Point out that it makes sense to address the options with the best ROI first. Look at the overall annual savings that insulation will provide and the impact this “free money” will have on your company’s cash flow. Also, as mentioned above, insulation has many other benefits in addition to energy savings. While insulation pays for itself quickly, it also helps improve personnel safety as well as equipment and process productivity by protecting equipment and reducing mold development and corrosion. This protection can reduce the overall cost of operations and increase productivity.
  9. Good or best practices in one unit/plant are not easily and widely diffused in organizations: Your champion can help with this. Consider starting a best practices program for the entire company, giving each unit or plant a chance to demonstrate their strengths and improve their weaknesses. A change in company policy might also be helpful in focusing everyone’s attention on the need for mechanical insulation.
  10. Insulation is not considered part of continuous improvement: If insulation issues have been neglected, with no record of continuous improvement, there may be reluctance to point out problems. This can lead to the question, “Why do we suddenly have to worry about this?” and make employees feel defensive about not addressing the problem sooner. “It will make me look bad” is a common reason workers do not like to raise problems. But energy improvement issues, especially in regard to insulation, are common to most plants. Instead of focusing on the past, focus on the future: improvements can be made starting now and will put the company ahead of the many that have not addressed the issue. Insulation may also be fighting for a share of the maintenance budget. Be sure to emphasize the ROI and other benefits when you talk about how much work the insulation system needs. Making insulation maintenance part of a continuous improvement program will also reduce the need for large one-time expenditures, both by keeping up with the insulation system’s needs and by reaping the benefits of properly insulated equipment.

Conclusion

Arguing the case for energy efficiency improvements is important for the health of your operation at any time, but it is especially vital after an energy or plant assessment. Often, the case rests on areas that are usually overlooked, such as insulation, and will require you to educate management on benefits that may seem obvious to you. Armed with data and prepared for the most common barriers, you are ready to go out and make your case.


This article appeared in the July 2008 issue of Insulation Outlook.




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