ABSTRACT
Once the financial benefits of energy savings projects are quantified, a quick and reliable process of screening the projects is required to prioritise and select projects for improvement. The actual energy reduction depends on the future demand and utilisation of the energy reduction project. It also does not appear as a line item in the balance sheet or cash flow statement. The vocabulary of the management team, hence the success of seeking authorisation and funding, is to describe the project in terms of the business goals and targets. A number of methods are available to provide a consistent method of comparing and selecting projects. The least complicated of these methods is simple payback (SPB), which is calculated by dividing the cost of the project by the cost savings. All financial analysis is at best only a snapshot of cost benefit for each investment opportunity at the time the analysis was carried out.
