Ninety-five percent of U.K. businesses think five years is too long to wait for energy-efficiency upgrades to pay off. Here are some of the factors at play in such short-sightedness - and what you can do to avoid making the same mistakes. By Will Sarni

A recent survey by EnergyTeam indicates that 95% of U.K. businesses believe that five years is too long to wait for energy-efficiency upgrades to pay off. One of the conclusions of the survey is that there is a general absence of awareness on energy-efficiency tax breaks for projects such as combined heat and power (CHP), "smart" building management, and solar installations. This assessment is right on the money, but it's merely the symptom of a broader disease. The fact is, most companies aren't up to date in their thinking on energy strategy.

There are two key factors that contribute to what I consider "last-century thinking" on corporate energy policy:

First, many businesses lack a well-thought-out energy strategy (as part of an overall sustainability strategy) to guide tactical decisions.

Businesses that are taking the lead include Wal-Mart, IKEA, and Dow. Wal-Mart has 17 stores and distribution centers with solar panels, plans to add five more stores, and is considering a major expansion to hundreds of stores. Wal-Mart could be generating approximately 10% to 40% of their power needs for each store. Not insignificant.

IKEA is taking this a step further by investing more than $75 million into cleantech startups over the next five years with an eye toward selling solar panels and other home energy-saving devices in its stores. Solar on the roof and solar panels sold in the store – brilliant!

And of course Dow, a long-term leader in sustainability, announced in May that they recouped a ten-year $1 billion investment in energy-efficiency projects and new products. Wouldn’t you love to see their return on investment (ROI) evaluations!

Second, the energy-generation landscape has changed markedly - but companies' thinking hasn't.

There are new options available to businesses such as purchase power agreements (PPAs). In brief, companies such as SunEdison and SunPower take on the cost of installing solar panels and customers pay the solar power company panels' output.

So how can avoid making the same mistakes in your own corporate energy strategy?

1. Craft a long-term strategy. Ensure that you have a long term (not quarter to quarter) sustainability strategy which includes your approach to energy. This long-term strategy must align with your overall business strategy or else it is destined to fail.
2. Increase awareness of the issues and opportunities. Ensure that corporate and facility managers understand the new opportunities available. This requires an investment in training and taking advantage of information available from state and federal agencies.
3. Evaluate your options. Take a hard and creative look at what makes sense for your business. Is it on site power generation? If so, how will you evaluate the economics and do you need to update your ROI approach and/or fund facility projects from a corporate fund to achieve overall company wide objectives (such as building brand value?). Alternative thinking on funding projects may be especially important if you have a highly decentralized company structure.
4. Pilot and learn. Pilot a project and use this as a way to increase awareness of the opportunities available to your business. Share best practices within the organization.
5. Be creative. Think creatively and consider new relationships with companies that will cover the capital costs for solar systems and potentially new services. Yes, it is possible that your facilities will be off grid or that your employees or customers will plug in their electric cars (perhaps the Chevy Volt or a Tesla roadster).

Businesses must recognize (and some currently do) that the days of assuming that traditional views of energy generation are fading. Will yours be ahead of the curve?

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Will Sarni is CEO of sustainability consulting firm DOMANI. He is also SLM's expert-in-residence on climate strategy and the host of Climate Management Weekly.