What Differentiates Us From the Competition?
“The Solution Dynamics Advantage”—
Our expertise and experience allow us to build a custom program to meet your needs, guarantee results, reduce your development risk and get savings results for the bottom line.
Lower Your Operating Costs
The savings generated by the identification and implementation of efficiency improvement projects go right to your financial bottom line.
This provides a greater competitive advantage and allows your company to reach a higher level of operational excellence. Inefficient energy operation can cause a significant amount of energy and dollar losses every month. This money is being given to the utility company and can be utilized to fund efficiency improvements for long term benefits for your facility.
We work closely with our clients to look at all aspects of their energy related costs. This includes, how the production process utilizes the energy, what opportunities there may be for improvements, what are the operation and maintenance costs, and what are the potential opportunities to lower overall costs.
Experience
Solutions Dynamics operates nationally to serve our clients with certified energy experts and proven programs and methods to reduce costs. We have Registered Professional Engineers who also have additional certifications by the Association of Energy Engineers as:
- Certified Energy Managers
- Certified Demand Side Professionals
- Certified Business Energy Professionals
- Certified Energy Procurement Professional
Our Professional Engineers are a key component in our analysis and evaluation of your operations. We have a combination of over 80 years of experience in a wide range of facilities and systems. That means that we are able to quickly identify and quantify opportunities for achieving cost reductions. The end results are verifiable energy cost reductions that meet your financial criteria.
Knowledge
Solution Dynamics focuses on your business needs and becomes part of your team. A key component to success is for our clients to be able to leverage their limited time and resources into our experience and knowledge to produce results. Most Companies today are not able to have personnel on staff with the time and experience in the technologies and methods for optimizing their energy use systems. This often means that energy cost reduction opportunities are not fully identified or evaluated or that they get delayed due to other priorities for facility personnel.
Energy cost reduction is our only job. This focus allows us to be able to efficiently identify and implement cost reduction opportunities. Any cost incurred for our services are easily paid for by achieving the savings in a timely manner versus continuing to give the money to the utility every month.
VALUE
The bottom line for any energy cost reduction strategy is to achieve real measurable savings. Solution Dynamics has packages, programs, and flexibility to meet your unique needs, budgets and assure saving results are achieved.
We work hard to achieve those savings and will assume some of the risk for performing our job and getting those savings accomplished.
Optimize Assets—A Systems Approach
Efficiency projects combine the installation of new, more efficient equipment with the optimization of your existing systems. The combined optimization of the energy assets allows for reductions of energy consumption, maintenance costs, and often times increased reliability and reduced production costs. Utilization of energy savings. O&M savings. and expected capital expenditures needs, can provide financing avenues for the installation of new equipment that previously could not meet internal budgetary hurdles for justification. All of these factors are taken into account to determine ways to reduce your energy related expenditures.
The savings generated by the identification and implementation of efficiency improvement projects go right to your financial bottom line.
It is often the ability to look at a system as a whole that provides the maximum benefits. A good example would be a typical steam system. There may be a need to replace an older boiler that is approaching the end of its life and operating inefficiently. However, the system as a whole should be evaluated. Understanding the steam uses in the facility, is the end use equipment efficient, is the distribution system operating efficiently, are there losses due to faulty steam traps or deficient pipe insulation, and other factors can affect the requirements for the new boiler. It may be that the right answer is to improve the efficiency of the end use equipment and distribution system and also install a more efficient boiler, possibly a smaller size, so that we now have optimized the assets of the system.
Another classic example of optimization may be the specification and selection of the equipment when performing a replacement of existing equipment. It is accepted that the cost of the energy used by the equipment over its life will far outweigh the initial capital cost. Looking at the equipment cost from a life cycle cost perspective will normally show that spending an incremental amount of capital for a more efficient piece of equipment will provide a better overall economic return. This is often overlooked and the replacement equipment is selected based on the lowest cost equipment. This does not provide for the optimization of the facility assets in the long term.
Looking at the energy use and systems as a whole. allows us to optimize the energy assets so that the lowest overall long-term cost.
FINANCING—A POWERFUL TOOL
The combination of our services and project financing is a powerful tool that allows you to get projects done that you have not been able to get completed before. We are an experienced services provider that knows the energy industry and how it relates to the commercial and industrial business sectors.
One of the issues that often confronts companies today is the competition for capital funding. As a result energy cost reduction opportunities end up not being implemented. There are several potential methods for addressing this issue and we are able to work with our clients to find implement financial solutions. One example is a service agreement that we have specifically developed to allow our customers to take advantage of this powerful tool.
The key point is to understand that all of the funding that is required to implement cost reduction opportunities is already being spent by your company.
All of the funding that is required to implement cost reduction opportunities is already being spent by your company.
It is now being given to the utility company every month in your utility bill. Those funds can easily be redirected to provide for funding the energy cost reduction opportunities in your facility. There is no additional cost funding stream that is required. It is better to use a third party capital financing tool and use the energy savings stream to make facility improvements than to put off the implementation of cost reduction opportunities due to lack of internal capital. Any interest paid or additional fees that may be paid are more than offset by the saving achieved by implementing sooner rather than waiting until a later time.
INNOVATIVE IDEAS
Solution Dynamics works to understand how energy is consumed by the facility and the processes in the facility. As part of that understanding we sometime have come up with new ideas for optimizing the process energy use. A couple of the innovative ideas have even had patents applied for. Some of the ideas include:
- Ultrasonic humidification for exacting requirements
- Energy saving application of technology for pet and food processing dryers
- Energy saving application of technology for kilns
- Application of technology for product coolin
Information
- Energy Efficiency
from a Business Perspective - Financing—A Powerful Energy Tool
- Optimize Assests
- Process and Efficiency Brochure
- Newly Developed Savings Technologies
- Case Studies
- Key Biographies
Energy efficiency from a business perspective
For a PDF version of this information, see below.
Why should energy saving projects
be considered seriously?
They increase bottom
line profitability.
- All companies can benefit from increased
profitability or increased competitiveness. - Energy savings go directly to the bottom line
to increase net earnings. - Delaying the implementation of energy projects costs money in missed opportunities
which can never be recovered. - Unlike the inherent risk of production expansions, energy projects do not rely on increased sales to produce a return on investment.
How does your company
utilize its money?
The fact is, you are already spending the money and it’s your choice to make.
- Monies are already being allocated to pay the
utility bills. - This money is typically considered a hard
cost and a normal and necessary part of
business operations. - The money that is currently set aside to pay
utility bills is the money that provides the justification for energy cost reduction projects.
Should you continue to give your money to the utility company or use it to upgrade your facilities and increase your company's long term profitability?
The financial impact of
energy savings
projects.
Energy savings can have a large impact on net earnings.
The following is a sample of typical company finan-
cials, the numbers will be different for your company
but the example demonstrates the bottom line impact.
Perform a quick calculation with your company's actual numbers to see the real benefits to you.
- XYZ Company Revenues = $500,000,000
- Cost of Goods Sold = $400,000,000
- Net Earnings if they are at 5% of revenue = $25,000,000
- If annual energy spending is 5% of cost (typical industrial) = $20,000,000
- Reduce energy spent by 15% = $3,000,000
This adds $3,000,000 to the net earnings of the company. That is a 12% increase in net earnings!
How much more sales would be needed to produce the same results?
If net earnings are 5% of revenue then $3,000,000
equates to an increase in sales revenue of $60,000,000. In most cases it is far easier to predict,
and more reliable to achieve and maintain an energy
cost reduction opportunity as compared to an equiva-
lent sales goal increase.
Project funding options—
Choose what works for you.
The capital budgeting process often provides obstacles to energy cost reduction
projects.
- Energy projects often get put into the normal
capital expenditure funding process and compete against other production and process related projects for the same limited capital
pool - Production related projects are normally considered to be the highest priority
- This often leads to energy projects not getting funding and not getting implemented
- Delaying implementation of energy cost reduction projects cost money.
Because of the energy savings justification,
third party financing can be used to provide an
immediate and lasting positive cash flow to the
company's bottom line.
Increase bottom line profitability
Cash flow example for capitalizing the project:
- Energy spend reduction = $3,000,000
- Project capital required with
a 3.3 year simple payback = $10,000,000 - Internal rate of return (IRR)
on invested project capital = 27 % - NPV of projectís life (10 yrs) = $9,379,856
Cash-flow example from a leased project:
- Energy spend reduction = $3,000,000
- Annual lease payment (for a 7-yr term) = $1,816,828
- Annual net positive cash-flow after lease payment = $1,183,172
- NPV of projectís life (10 yrs) = $9,610,572
In the project lease example the net positive cash flow to the bottom line profitability of the company is $1,183,172 per year with no internal capital outlay.
The net effect of utilizing a leasing mechanism for
energy projects is that of simply swapping a utility
expense for a lesser expense in the form of a lease
payment. This will create a net positive cash flow
while at the same time upgrade your facilities with
more modern equipment and enhanced controls.
In most cases the benefits of reducing the facility energy costs through immediate implementation will far
outweigh the cost of money and to delay is to con
tinue wasting money.
Don't spend your valuable capital budget on ener projects with comparatively longer paybacks. Allocate your money to those projects which give the highest return.
Common business practice allocates money to those
projects which give the highest return. Use of third
party funding lets energy projects achieve a very high
return:
- Utilizing a leasing mechanism can preserve
your internal capital and line of credit for use
in those areas which produce the highest
returns. - Because there is no internal capital outlay the
IRR is infinite and the simple payback is
instant! - The interest portion of the payment may be
tax deductible and there may be other real
tax advantages associated with depreciation
and the installation of new equipment.
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