In defense of cream skimming

Photo courtesy of Flikr user Brandon Wang

In which we go straight for the good stuff, look ourselves in the mirror, and smile.

At a recent speaking event, I was approached by a utility evaluation consultant who asked in a rather loaded way whether our software was just cream skimming…

Not familiar with cream skimming? It’s just what you’d expect from dairyland. Gridium’s customers take the tasty and easy to capture savings (cream) from the milk, robbing the savings from other projects and leaving them with bland, chalky, skim milk.

As Auden Schendler put in his 2012 essay: “In fact, picking the low-hanging fruit, while cutting emissions and creating great PR, actually hurts deeper sustainability and prevents firms, governments and households from undertaking more comprehensive efficiency.”

Since we like to advance sustainability in buildings, it’s worth responding to this indictment with what we believe.

  • Energy waste is cumulative: wasted energy is never coming back. That means the dollars don’t get refunded and we can’t put the emissions back in the ground. Bigger projects might capture bigger savings, but they take time and money to execute. Why wait to do the easy stuff?

Cream delivers wins.

  • Energy savings are an organizational issue: We believe energy efficiency is a huge opportunity and among the best returns out there for corporations. The sad reality is that most buildings aren’t doing anything and are just starting their journey. Why haven’t they done more? We believe one reason is that no-one has delivered easy, quick wins that get buildings excited to save. Organizations that want to do energy efficiency need champions and champions need wins.
  • Bundling is a distraction: The core of the tactical objection to cream skimming is that the savings from easy high-return measures are needed to offset long payback measures. Fixing a startup issue in an afternoon delivers the savings to justify new window film. While right-sizing equipment is great for deep retrofits, most of the time bundling is the result of a service provider trying to enlarge the project and get more items into a simple payback threshold. And more often than not, this just slows everything down and lowers the return.
  • Not everything has to run through ratepayers: cream skimming may be an issue for the deep thinkers in utility programs. But Gridium is a commercial service with very strong ROI and lots of happy customers. Utility programs should worry about market barriers and celebrate when something actually works in the market.

So, yes visit site. Yes, we are cream skimming. And it is delicious. Come join us.

About Tom Arnold

Tom Arnold is co-founder and CEO of Gridium. Prior to Gridium, Tom Arnold was the Vice President of Energy Efficiency at EnerNOC, and cofounder at TerraPass. Tom has an MBA from the Wharton School of Business at the University of Pennsylvania and a BA in Economics from Dartmouth College. When he isn't thinking about the future of buildings, he enjoys riding his bike and chasing after his two daughters.

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