Healthcare Executives Place Higher Priority on Energy Efficiency Than Others, Research Shows

Monday, July 21, 2008 General News
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MILWAUKEE, July 21 The American Society for HealthcareEngineering (ASHE) and Johnson Controls, a global leader in creating smart andsustainable environments, announced new research on energy efficiency inhealthcare. The results give the healthcare industry reason to celebrate. Notonly do healthcare executives place a higher priority on energy efficiencythan executives in other industries, they are more likely to expect to makeimprovements over the coming year.


Johnson Controls and ASHE commissioned the 2008 Healthcare EnergyEfficiency Indicator study, which surveyed 335 energy decision makers in thehealthcare industry. The research was conducted in March 2008.

A parallel, multi-industry study, the Johnson Controls Energy EfficiencyIndicator, polled 1,150 North American executives in partnership with theInternational Facility Management Association (IFMA).

Healthcare executives place greater importance on energy efficiency thanothers. Only 57 percent of respondents to the multi-industry study calledenergy efficiency "extremely important" or "very important," compared with 65percent of healthcare respondents. Healthcare organizations are consequentlymore likely than companies in other industries to invest in energy efficiency.Two thirds (67 percent) of healthcare organizations reported plans to spendcapital on energy efficiency this year, compared to 56 percent in themulti-industry survey. Moreover, healthcare organizations will tolerate alonger payback period (4.2 years) on energy efficiency projects than otherindustries (3.6 years).

Skyrocketing Energy Prices Motivate Investment in Energy Efficiency

Survey respondents project energy price increases of 11 percent this year.On average, healthcare organizations will spend eight percent of their capitalbudgets and six percent of their operating budgets to conserve energy over thecoming year. Their drive toward energy efficiency is motivated primarily bycost, with 59 percent of respondents saying that the need to control costs isa greater motivator than environmental responsibility.

"We live in an age of rising energy prices and growing environmentalconsciousness," said Clay Nesler, vice president of global energy andsustainability, Johnson Controls. "All industries are investing moreaggressively to control energy costs and improve their sustainability. Webelieve this is a long term trend."

A New Wave of Investments on the Horizon

A majority of healthcare organizations have already invested in efficiencyand cost control measures. "It takes a lot of energy to run a hospital,"explained Dale Woodin, executive director of ASHE. "As healthcareorganizations look for ways to control costs and improve patient care, theyare engineering energy efficient solutions that will pay off handsomely inthree or four years." Common investments include:

Interest in Renewable Energy Grows

Healthcare has not adopted renewable energy technology to the same degreeas other industries. More than two thirds (68 percent) of respondents to themulti-industry study have invested in renewable technologies or have activelyconsidered investing. Only 38 percent of healthcare organizations reportedsimilar interest in renewable energy. Included in this number, 25 percent ofhealthcare organizations have looked actively at solar energy, and significantnumbers have shown interest in other technologies such as biomass, geothermaland wind.

"Finding sites for energy generating equipment like solar panels and windturbines can be a challenge for compact urban hospitals, but it is a challengethat can be overcome," notes Don Albinger, vice present of renewable energy,Johnson Controls. "Our job is to educate healthcare leaders about new,creative and cost effective techniques for incorporating renewable e

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