Justifying an energy efficiency project requires facility executives to walk the fine line between salesmanship and exaggeration, said Richard Lubinski, president of Think Energy Management, at the Facility Decisions conference and exposition in Las Vegas. (For more on his session, click here.)

To succeed in the long term, facility executives should develop a reputation for making their numbers on energy saving projects. That way, when a facility executive comes in with a new proposal to save energy, top management will have confidence that the project will achieve projected savings.

That's why it's essential to err on the side of caution when projecting savings, Lubinski said. "You need to be conservative on your projections," he said. "Your reputation is on the line."

To be conservative, Lubinski recommends that facility executives not include in-house labor savings in projects. Even if an upgrade reduces the amount of time required by in-house staff to maintain a piece of equipment, those time savings won't show up in dollar savings unless staff is cut.

Lubinski advises that facility executives not to include utility rebates in projected savings. The reason: At the time the project is being planned, there is a chance that those incentives may not come through. And if the rebates are obtained, they'll make the project look even better than expected.

Another step Lubinski recommmends is to look at the incremental cost of energy, not the average cost. The incremental cost is the cost of the actual kilowatt hours that will be saved, which may be less than the average cost of all the electricity purchased.

Being conservative doesn't mean being shy about describing the real non-energy benefits of an energy project. For example, if an upgrade will address longstanding hot and cold complaints, that soft benefit may do more to sell the project than its energy ROI, even though the soft gains can't be quantified.

Another way to win support for a project with a relatively modest ROI is to bundle it with projects that have better returns. The package of projects won't have the high return of the best individual projects, but neither will it have the longer payback period of other projects.

It's also worthwhile to use a simple cash flow model to make the point that savings from energy efficiency projects can extend well into the future - five years, 10 years, or more. Lubinski said he stopped using the approach, then went back to it when he realized that financial managers were overlooking the long term savings from efficiency projects.

Finally, Lubinski pointed out, an energy efficiency upgrade increases the value of the building by a multiple of the annual savings. If that multiple is 10, and the project saves $100,000 a year, the value of the building increases by $1 million, he said.