The Southern Company (SO), Alcoa Inc (AA): Does This Government Program Actually Work?

These are just a handful of the important players. The program has 110 partners, including the likes of Michigan State University, Kohl’s Corporation (NYSE:KSS), Intercontinental Holdings, and others, and encompasses 7,700 buildings and more than 2 billion square feet . You can see a complete list of Better Buildings Challenge partners here.

Results!
Okay, so is this program snagging headlines for being a complete and utter failure? You decide. The first full-year of the Better Buildings Challenge has produced the following results among its partners:

• Average improvement of energy intensity of 2.5%
• Savings of $58 million, or 8.5 trillion BTUs
• Same as pulling 110,000 cars off the road
• 2,100 buildings have improved their energy intensity by 10% to 20%
• 3,404 jobs created or sustained in Atlanta alone

Let’s get some clarification on “energy intensity”. This term is used to compare energy use and cost savings over time, mostly because different industries measure energy use in different ways. For example, a commercial office building might measure energy use per square foot, while an automobile manufacturer might measure it per vehicle produced. Energy intensity accounts for change over time at a particular building, and allows us to compare office buildings to manufacturing facilities.

The DOE’s outlook states that if all U.S. commercial buildings and industrial facilities were able to increase their energy intensity by 2.5% every year for 10 years, the total savings would be more than $80 billion annually after that tenth year.

In other words, the program is working.

Bottom line
The investing takeaway here might be a tad obvious. This is a national program with national goals, but all of the savings come at the institutional level. A company that saves on energy costs has more money to put toward growth-oriented acquisitions, invest in R&D, or, ahem, return to shareholders. Yes, many energy savings programs require monetary investment up front, but many gains are achieved merely by making behavioral changes and pocketing free money. It’s time to start looking at our investments from an energy-savings perspective, because that is the perspective that the best businesses are taking as well.

The article Does This Government Program Actually Work? originally appeared on Fool.com.

Fool contributor Aimee Duffy has no position in any stocks mentioned. For more energy information, you can follow her on Twitter @TMFDuffy.The Motley Fool recommends 3M and Southern Company.

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