1. Gain a sustainable advantage1
Tennessee Energy Education Initiative
Telephone Study
July 17, 2013

2. Gain a sustainable advantage22
Objectives
Shelton Group conducted a comprehensive survey of Tennessee
businesses in selected industries in order to :
• Assess overall awareness of energy efficiency, behavior drivers, and
attitudes related to energy efficiency improvements
• Determine which types of energy efficiency improvements have
been completed and which they think they need/plan to do
• Determine motivations for conducting energy efficiency
improvements
• Gauge reaction to the program and financing options
• Validate the best targets and measures to prioritize with each

3. Gain a sustainable advantage33
Methodology
• Telephone study of TN organizations in selected industries
(see next slide for distribution of interviews by industry)
• Sample list initially pulled from Hoovers database, and
supplemented with lists from Hoovers Premier and MelissaData
• To qualify for the study, respondents had to be primary decision
makers or influencers for energy-related facility improvement
• Interviewing conducted May 6–30, 2013
• Average interview length of 11 minutes
• 200 completes with margin of error +/- 7.1%

4. Gain a sustainable advantage44
Distribution of Interviews by Industry (Key sectors
determined by secondary analysis)
Industry Sector # Completes % Total
Automotive 6 3%
Healthcare 30 15%
Private education 30 15%
Real estate 8 4%
Transportation and logistics 15 8%
Wholesale distribution 20 10%
Chemicals and plastics 10 5%
Hotels and motels 7 4%
Food manufacturing 5 3%
Subtotal Tier 1 Sectors: 131 65%
Restaurants (location owned) 3 2%
Business Services - accounting, legal,
marketing, architectural, etc. 26 13%
Technology and science 10 5%
Retail 30 15%
Subtotal of Targeted Tier 2 Sectors: 69 35%
Grand total: 200 100%

5. Gain a sustainable advantage55
Organization characteristics
East
40%
Middle
38%
West
23%
n=200
Region
Locally
89%
Nationally
10%
Internationally
1%
Decision Making

6. 57%
26%
7%
10% One
Two-Four
Five-Nine
10+
52%
15%
33%
10 to 49
50 to 99
100+
Organization Characteristics
Number of Facilities in TNNumber of Employees
*Median sq ft = 36k
6%
19%
38%
17% 16%
Less than
2.5k
2.5-10k 10-50k 50-100k 100k+
Square Footage
Own
71%
Lease
29%
% Own vs. Lease Facility

7. Gain a sustainable advantage77
Average
Age:
52
Respondent Characteristics
Influencer
47%
Decision
Maker
53%
Male 76%
Female
24%
n=200

8. Gain a sustainable advantage8
Executive Summary

9. Gain a sustainable advantage99
Importance of Energy Conservation
• Eight out of ten organizations consider energy
consumption/conservation important to daily business purchase
choices and activities.
• Respondents in organizations with more than one facility were
more likely to consider energy consumption and conservation
important than those with only one facility (83% vs. 73%).
• In contrast, organizations in newer facilities (less than five years
old) were more likely to consider energy consumption and
conservation unimportant than those with older facilities (38% vs.
5%).

10. Gain a sustainable advantage1010
Energy Efficiency of Current Facilities
• About two-thirds of the TN organizations surveyed consider their
current facility(ies) energy efficient.
– Regionally, organizations in East TN (75%) and Middle TN
(63%) were more likely to consider their facilities energy
efficient than those in West TN (51%).
– Organizations in facilities over 20 years old were more likely to
consider their facilities inefficient than those with newer facilities
(19% vs. 3%).

11. Gain a sustainable advantage1111
Energy Efficiency Improvement Activities
• Average number of completed EE improvements per organization:
3.3
– Facility owners were more likely to have made EE
improvements than leasers (3.6 vs. 2.8)
– Companies with multiple facilities have done more (3.5) vs.
those with one facility (3.2)
– Average EE Updates by Sector:
• Education (4.3)
• Manufacturing & Distribution (3.4)
• Business Services (3.1)
• Healthcare (3.1)
• Hospitality/Retail (3.0)

12. Gain a sustainable advantage1212
Energy-Related Priorities
• While 11 of the 13 industries surveyed considered lighting a
priority, more than half also listed HVAC as a top energy priority.
• Organizational improvements generally paralleled industry
priorities, with 76% of those surveyed reporting that they have
already installed lighting improvements, and 56% having installed a
more efficient mechanical or HVAC system.
• Energy management, insulation, and renewable energy top the list
of activities that companies recognize they need to do.

13. Gain a sustainable advantage1313
Top Motivators/Drivers
• “Spending less on energy and more on other priorities” and
“save money” are the top reasons cited for participating in energy-
related improvements.
– Facilities that were 20+ years old were less likely to select “save
money” than were newer facilities (22% vs. 39%).
– Regionally, organizations in West TN (42%) and Middle TN
(31%) were more likely to select “save money” than those in East
TN (19%).

14. Gain a sustainable advantage1414
Key Challenges/Barriers
• Overall, “lack of budgets/funds” and “lack of time/too busy/other
priorities” top the list of challenges/barriers.
– When it comes to size, however, facilities that were under 50k
square footage were more likely to say their organization “isn’t
sure what to do to save more energy” than were larger
organizations (30% vs. 8%).
– In addition, influencers were more likely to say “implementing
energy-related improvements is too
complicated, inconvenient, and/or too disruptive” than were
decision makers (23% vs. 12%).

15. Gain a sustainable advantage1515
Reaction to Funding Options
• When asked, “If there was a program that offered 5-year loans with
a 2% interest rate for energy-related improvements and retrofit
projects ranging from $20,000 to $5 million, how would this impact
your plans for facility improvement?,” 37% of TN organizations
reported they would be more likely to complete facility
improvements if they were offered this program.
• In addition, when asked, “If there were a program that offered
10-year loans with a 5% interest rate for solar generation
systems, how would this impact your plans for installing such a
system?,” 26% of TN organizations indicate they would be more
likely to install solar if this program was offered to them.

16. Gain a sustainable advantage16
Detailed Findings

17. Gain a sustainable advantage29
Attitudes Toward Energy Efficiency

18. Gain a sustainable advantage3030
Almost eight out of ten organizations surveyed
consider energy usage important.
8%
16%
77%
Unimportant
Neither important nor
unimportant
Important
Q10 - How important is energy consumption
and conservation in your organization's daily
business purchase choices and activities?
n=200
Respondents in organizations
with more than one facility
were more likely to consider
energy consumption important
than those with only one
facility (83% vs. 73%).
In contrast, organizations in
newer facilities (less than five
years old) were more likely to
consider energy consumption
unimportant (38% vs. 5%).
While not statistically
significant, respondents in the
technology & electronics
segment were more likely to
consider energy consumption
unimportant.

19. Gain a sustainable advantage3131
About two-thirds consider their facility efficient.
1%
13%
21%
65%
Don't know / Not sure
Inefficient
Neither efficient nor
inefficient
Efficient
Q11 - Overall, how would you rate the energy
efficiency of your current facility(ies)?
n=200
Regionally, organizations in East
TN (75%) and Middle TN (63%)
were more likely to consider
their facilities energy efficient
than those in West TN (51%).
Organizations in facilities over
20 years old were more likely to
consider their facilities inefficient
than those in newer facilities
(19% vs. 3%).
While not statistically
significant, respondents in the
technology & electronics
segment were more likely to
consider their facility inefficient
(30% vs. 13% overall).

20. Gain a sustainable advantage32
Energy-Related Priorities

21. Gain a sustainable advantage3333
Lighting and HVAC top the list of energy-related
priorities.
4%
3%
6%
7%
8%
9%
9%
9%
10%
11%
13%
15%
19%
20%
24%
34%
37%
43%
56%
67%
Other energy-related priorities
Small motors/conveyors
Solar
Manufacturing furnaces
Co-generation equipment
Fleet cars/trucks/buses
Refrigeration
Reflective/cool roofing
Compressed air systems
Data center power and cooling
Geothermal heating/cooling
PC power management solutions
Building envelope upgrades
Water heating
Energy management/system monitoring
Lighting (exterior)
NET Energy/PC Power Management
HVAC
Lighting (interior)
NET Lighting (interior/exterior)
Q13 - What are your organization's top three energy-related priorities?
n=200
Respondents w/newer
facilities (less than five
years old) were more
likely to select PC power
management (63% vs.
15% overall).
Respondents who lease
were more likely to select
energy management
systems than those who
own (35% vs.19%).

22. Gain a sustainable advantage3434
While 11 of the 13 industries surveyed considered
lighting a priority, more than half also listed HVAC as a
top energy priority.
Industry Sector (n size)
Most frequently mentioned energy-related
priority
Real estate (8) Interior lighting (75%), exterior lighting (63%)
Retail (30) Interior lighting (67%), exterior lighting (43%)
Transportation and logistics (15) Interior lighting (60%), exterior lighting (40%)
Chemicals and plastics (10) Interior lighting (60%), exterior lighting (40%)
Wholesale distribution (20) Interior lighting (60%), exterior lighting (35%)
Automotive (6) Interior lighting (50%), exterior lighting (50%)
Healthcare (30) Interior lighting (60%), HVAC (53%)
Restaurants (3) HVAC (100%), interior lighting (67%)
Hotels and motels (7) HVAC (71%), interior lighting (43%)
Private education (30) HVAC (70%), interior lighting (47%)
Business services (26) HVAC (62%), interior lighting (58%)
Technology and electronics (10) HVAC (50%)
Food manufacturing (5)
Cogeneration (40%), compressed air systems (40%),
interior lighting (40%), manufacturing furnaces
(40%), refrigeration (40%), water heating (40%)
Lighting
HVAC
Other

23. Gain a sustainable advantage3535
Companies surveyed have completed an average
of 3.3 of these improvements.
34%
37%
38%
56%
76%
32%
17%
16%
24%
14%
Added an energy management system or
controls to make the facility more energy
efficient
Installed a more efficient water heating
system
Installed more efficient appliances or
refrigeration
Installed a more efficient mechanical and/or
HVAC system
Installed more energy-efficient light
fixtures, controls or occupancy sensors
Q18a - Which improvement(s) has your organization completed on your primary
facility in the past five years? Q18b - Does your primary facility need any of these
improvements? Q18c - Does your organization plan to do this in the next 12
months?
Already completed
Need to do
n=200
Measure
with highest
perceived
need

24. Gain a sustainable advantage3636
Perceived need for insulation/sealing, cool roof
and renewable generation is also high.
13%
19%
30%
33%
29%
27%
9%
29%
Added a renewable energy generation
system
Installed a reflective / cool roof
Installed more efficient manufacturing
equipment
Added insulation, air sealing or ductwork
Q18a - Which improvement(s) has your organization completed on your primary facility in the
past five years? Q18b - Does your primary facility need any of these improvements? Q18c -
Does your organization plan to do this in the next 12 months?
Already completed
Need to do
n=200

25. Gain a sustainable advantage3737
Insulation/air sealing tops the list of activities
companies think they need to do and are most
likely to do.
9%
14%
16%
17%
24%
27%
29%
29%
32%
Install more efficient manufacturing equipment
Install more energy-efficient light fixtures, controls or
occupancy sensors
Install more efficient appliances or refrigeration
Install a more efficient water heating system
Install a more efficient mechanical and/or HVAC system
Install a reflective / cool roof
Add a renewable energy generation system
Add insulation, air sealing or ductwork
Add an energy management system or controls to make
the facility more energy efficient
Q18b - Does your primary facility need any of these improvements? Q18c - Does your
organization plan to do this in the next 12 months?
Need to do
n=200
3%
12%
7%
5%
6%
4%
4%
4%
2%
Plan to do
Most likely
activity

26. Gain a sustainable advantage44
Motivators/Drivers

27. Gain a sustainable advantage4545
Spending less on energy and saving money are
the top reasons cited for improvements.
1%
2%
2%
2%
2%
3%
4%
6%
7%
7%
29%
39%
To help offset future rate increases
To reduce greenhouse gas emissions
To satisfy customer or market expectations
Some other reason
To protect the environment and save natural resources
To accomplish a corporate objective or directive
To protect our nation's economy and reduce…
To make the facility more comfortable
To get more control over energy usage and costs
To reduce energy waste
To save money
To spend less on energy and more on other priorities
Q17 - What would be your one top reason for your organization to participate in
energy-related improvements?
n=200
Facilities that were 20+ years old were
less likely to select “save money” than
were newer facilities (22% vs. 39%).
Regionally, organizations in West TN
(42%) and Middle TN (31%) were
more likely to select “save money”
than those in East TN(19%).
The focus
is on
“other
priorities”

28. Gain a sustainable advantage4646
Top drivers/motivators by industry:
Focus on spending less and saving money
Industry Sector (n size) Most frequently mentioned
Automotive (6) Spend less on energy/more on other priorities (67%)
Real estate (8) Spend less on energy/more on other priorities (50%)
Retail (30) Spend less on energy/more on other priorities (47%)
Private education (30) Spend less on energy/more on other priorities (40%)
Business services (26) Spend less on energy/more on other priorities (42%)
Healthcare (30) Spend less on energy/more on other priorities (43%)
Technology and electronics (10) Spend less on energy/more on other priorities (40%)
Chemicals and plastics (10)
Spend less on energy/more on other priorities (30%),
save money (30%)
Hotels and motels (7)
Spend less on energy/more on other priorities (29%),
save money (29%)
Food manufacturing (5) Save money (80%)
Restaurants (3) Save money (67%)
Transportation and logistics (15) Save money (47%)
Wholesale distribution (20) Save money (35%)
Spend
less on
energy/
more on
other
priorities
Save
Money

29. Gain a sustainable advantage49
Challenges/Barriers

30. Gain a sustainable advantage5050
Lack of funding and other priorities top the list of
challenges/barriers.
23%
24%
26%
40%
50%
Your organization isn't sure what to do to
save more energy.
The payback period on energy-related
improvements is too long.
Your organization believes it has done all
the energy-related improvements possible.
Lack of time/too busy/other priorities
Lack of budget/funds
Q12 - What would you say are the key challenges or barriers your
organization faces in making energy-related improvements?
n=200
Facilities that were under 50k
square footage were more
likely to say that they were
uncertain what to do than
larger facilities (30% vs. 8%).

31. Gain a sustainable advantage5151
Lesser challenges/barriers.
6%
6%
9%
17%
18%
Some other reason
Not applicable/lease improvements not
allowed or very unlikely
You don't plan to be in the facility very long.
Decision makers haven't considered it or
don't believe it would really help much.
Implementing energy-related improvements
is too complicated, inconvenient and/or too
disruptive.
Q12 - What would you say are the key challenges or barriers your
organization faces in making energy-related improvements?
n=200
Influencers were more likely
to say that implementing
improvements is disruptive
than were decision makers
(23% vs. 12%).

32. Gain a sustainable advantage53
Reaction to Financing Options

33. Gain a sustainable advantage5454
37% of TN organizations would be more likely to complete
facility improvements if they were offered this program.
24%
40%
25%
12%
I don't know and am still undecided about
improvement plans.
It does not impact my plans at all. I'm still
unlikely to undertake improvements.
It makes me somewhat more likely to go ahead
with improvements in the next 12 months.
It makes me very likely to go ahead with
improvements this year.
Q19 - If there were a program that offered 5-year loans with a 2% interest rate for
energy-related improvements and retrofit projects ranging from $20,000 to
$5 million, how would this impact your plans for facility improvement? (n=200)
37%
More realistic market estimate: Using half of those who are very likely and one fourth of those who are
somewhat likely - 12%.

34. Gain a sustainable advantage5555
Over one-fourth of organizations would be more
likely to install solar if this program was offered to
them.
23%
52%
18%
8%
I don't know and am undecided about solar
generation systems.
It does not impact my plans at all. I'm unlikely to
install a solar generation system.
It makes me somewhat more likely to install a
solar generation system in the next 12 months.
It makes me very likely to install a solar
generation system this year.
Q20 - If there were a program that offered 10-year loans with a 5% interest rate for
solar generation systems, how would this impact your plans for installing such a
system? (n=200)
26%
More realistic market estimate: 9%.

35. Gain a sustainable advantage56
Sector Profiles

36. Gain a sustainable advantage5757
Industry Sector Groupings
Due to relatively small sample sizes, sectors were grouped as follows
for these industry profiles:
1. Manufacturing and Distribution (56) - Automotive (6), Chemicals
(10), Food (5), Transportation and logistics
(15), Wholesale distribution (20)
2. Hospitality and Shopping (40) - Hotels (7), Restaurants
(3), Retail (30)
3. Business Services (44) - Real estate (8), Business
Services*(26), Technology^(10)
4. Healthcare (30)
5. Education (30)

37. Gain a sustainable advantage5858
Sector Prioritization
• Developed a scoring that considers:
– # companies / with 10+ employees
– % with multiple facilities / facilities with 50k+ sq. ft.
– % owned vs. leased
– Avg. number of completed and likely improvements
– % perceived inefficient
– % likely to act with financing

38. Gain a sustainable advantage5959
Sector Prioritization
Industry Sector
Total
Companies*
% w/10+
Employees*
% w/Facility
50K+ sq. ft.
%
w/Multiple
Facilities
%
w/Facilities
20+ Yrs Old
% Owned
Facility
% Perceived
Inefficient
Avg. #
Completed
Improvements
Avg. # Likely
Improvements
% Very Likely
to Act
w/Financing
Score
Manuf. & Dist. 29,542 29% 41% 45% 59% 79% 11% 3.4 0.59 20% 66
Private Education 6,959 41% 40% 40% 77% 80% 20% 4.3 0.50 13% 62
Hosp. &
Shopping
57,476 29% 25% 38% 65% 73% 18% 3.0 0.42 10% 50
Business
Services
37,084 15% 27% 34% 64% 64% 14% 3.1 0.39 5% 41
Healthcare 22,473 17% 23% 60% 50% 53% 3% 3.1 0.27 10% 39
Score based on rankings for each category, with additional weighting: Total companies (x3); 50k+
sq. ft. facilities (x3); Multiple facilities (x3); Owned facility (x2):
* Based on market data rather than survey data.

39. Gain a sustainable advantage6161
Messaging Effectively: Leveraging Motivators/Drivers
to Address Challenges/Barriers by Industry
Industry Sector (n size)
Motivators/Drivers Challenges/Barriers
Spend
Less/More
on other
Priorities Save Money
Lack of
Budget/Funds
Payback
Period Other
Retail (30)  
Private education (30)  
Business Services (26)  
Healthcare (30)  
Automotive (6)   
Chemicals and plastics (10)   
Food manufacturing (5)  
Restaurants (3)  
Transportation and logistics (15)  
Technology and electronics (10)  
Real estate (8)  
Hotels and motels (7)   
Wholesale distribution (20)  

40. Gain a sustainable advantage67
Conclusions/Recommendations

41. Gain a sustainable advantage6868
Prioritizing Targets: Region
• Tennessee has experienced stronger economic growth in the Middle
and Eastern regions in recent years. In general, facilities are newer
there.
• In addition, organizations in East TN (75%) and Middle TN (63%)
were more likely to consider their facilities energy efficient than
those in West TN (51%).
RECOMMENDATION:
Regionally, the strongest opportunities
for energy-related improvements are likely
to be:
1) West, 2) Middle, then 3) East

42. Gain a sustainable advantage6969
Prioritizing Targets: Age of Facility
• Organizations in newer facilities are generally more efficient. Older
facilities (20+ years) offer greater opportunities for energy-related
improvements.
RECOMMENDATIONS:
• For newer facilities, focus on energy
management and PC power
management solutions.
• Older facilities offer opportunities for a
broader range of energy-related
improvements.

43. Gain a sustainable advantage7070
Prioritizing Targets: Industry Sector
RECOMMENDATIONS:
1. Manufacturing & Distribution
2. Education
3. Hospitality* & Shopping
4. Business Services
5. Healthcare
*Prioritize locally-owned independent or franchised
hotels with local decision-making power.

44. Gain a sustainable advantage7171
Moving TN Organizations Down the Path
The easiest path to encourage improvements should start with/parallel
industry priorities:
• Energy-related priorities
– 11 of the 13 industries surveyed consider
lighting a top priority for their company.
– 7 of the 13 consider HVAC a top priority.
• Facility improvements
– 76% have already improved the lighting
while 56% have improved the HVAC.

45. Gain a sustainable advantage7272
Moving TN Organizations Down the Path
RECOMMENDATION:
For companies new to energy
improvements, emphasize most common
first steps (already perceived needs):
lighting and HVAC.
For those who are further along the path
and have already integrated these
improvements, focus on “gaps” that
companies recognized as needing to
improve: energy management (32%),
insulation (29%)

46. Gain a sustainable advantage7373
Packaging/Bundling Opportunity
• While more than one-third of the organizations surveyed considered
energy/PC management as a top priority and 32% recognize a need
to do this improvement, only 3% plan to make this improvement.
RECOMMENDATION:
• Consider packaging or bundling funding for energy/PC power
management improvements with lighting, HVAC and insulation
projects to speed adoption of these systems which will increase
behavior change and compound impact.
• Track Impact. Demonstrate the effectiveness of bundling these
systems with improvements with stats on increased savings/higher
ROI and shorter payback period.

47. Gain a sustainable advantage7474
Encourage interest in renewable energy
29% say they think they need a
renewable generation system and it’s
a higher priority initiative (7% likely)
than many others.
26% said they would likely undertake a
renewable energy project with
financing, as described.
RECOMMENDATION:
Prioritize solar and other renewable
energy project messaging and include
information on state tax incentives for
renewable energy systems.

48. Gain a sustainable advantage75
Questions?
Thank you!
Lee Ann Head, VP Research
lhead@sheltongrp.com
706.331.8027