How Can Increasing Interest In Energy Efficiency Help Johnson Controls?
In the latest Energy Efficiency Indicator survey conducted by Johnson Controls (NYSE:JCI), the company found that the interest and investment in energy efficiency “are at an all-time high.” The survey of over 1,200 facility and energy management executives in the United States, Brazil, China, Germany, and India showed that 72% of the respondents expect to increase their investment in energy efficiency over the next year. What’s noteworthy is that the same metric for 2013 was at 42%. In China and India, a whopping 85% and 89% of the respondents planned to increase such investments.
Another key finding of the survey was that heating, ventilation, and air conditioning (HVAC) was the “most popular improvement over the past 12 months,” with 63% of the organizations conducting HVAC improvements. Moreover, 80% of organizations plan to achieve nearly zero, net zero, or positive energy status for at least one of their facilities, compared to 49% of those surveyed in 2013. This means that 80% of companies expect to have at least one building that offsets all of its carbon emissions, implying massive investments by companies for energy efficiency in the future.
Energy efficiency is at the core of Johnson Controls, and the company has 125 years of experience in developing and providing energy efficient solutions, which are innovative, cost-effective, and scalable. According to Bill Jackson, president of the Building Efficiency segment, “energy efficiency is the center of a major transformation of our buildings, energy systems, and urban infrastructure.” Much of their work focuses on driving down energy costs, which is the main driver for the adoption of such solutions by organizations in the commercial, industrial, and government sectors. Since in many sectors heating, ventilation, and air conditioning represent a significant proportion of the running costs, most are keen to boost the efficiency of such systems. While reducing business costs is the main reason for energy investments, companies are increasingly factoring in customer and employee attraction, greenhouse gas reduction, enhanced reputation, government policy, and investor expectations when making such investment decisions.
In the US, rising energy investments has become a key priority. As reported by the Bloomberg New Energy Finance, the electricity demand in the country has been flat since 2007, as opposed a CAGR of 2.4% during 1990 to 2000. A key driver for the decoupling of electricity usage and GDP growth has been numerous state policies promoting energy efficiency; electricity load growth in 2015 clocked in at only 0.5%, compared to a growth of 2.4% in the GDP. Meanwhile, annual investments in energy efficiency have continued to grow.
As noted by the International Energy Agency (IEA), the uptake of economically viable, energy efficiency investments have the potential to boost the cumulative economic output by $18 trillion through 2035. Hence, the potential for Johnson Controls in this field is massive, as the need for energy efficiency to support economic growth, enhance social development, and advance environmental sustainability will likely continue into the future.
Have more questions on Johnson Controls? See the links below:
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- Why Is Johnson Controls Increasing The Production Of Its Absorbent Glass Mat (AGM) Batteries?
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- What Will Be The Effect On The Segment Operating Margin As A Result Of The Johnson Controls-Tyco Merger?
- What Are The Benefits Johnson Controls Will Attain From The Tyco Merger?
- What Will Be Johnson Controls’ Revenue Composition Post The Tyco Merger?
- Why Did The SG&A Expenses For Johnson Controls Increase In The First Half Of FY 2016?
- How Did Johnson Controls’ Segments Perform in Q2 2016?
- Will The U.S. Treasury Department Rules, That Killed The Pfizer-Allergan Deal, Affect Johnson Controls-Tyco Merger?
- Johnson Controls’ Earnings Beats Expectations
- Will Johnson Controls Miss Estimates Again?
- How Has Johnson Controls’ Net Sales Changed By Geographic Areas?
- How Does The Adient Spin-Off And Tyco Merger Create Value For Johnson Controls’ and Tyco’s Shareholders?
- What Costs Did Johnson Controls’ 2015 Restructuring Plan Entail?
- Johnson Controls: Year 2015 In Review
- How Will Johnson Controls’ Revenue And EBITDA Composition Change In The Next 3 Years?
- What’s Johnson Controls’ Fundamental Value Based On Expected 2016 Results?
- What’s Johnson Controls’ Revenue And EBITDA Breakdown?
Notes:
- Q4’23 Earnings Preview: Down 21% YTD Will Johnson Controls Stock Continue To Underperform?
- What’s Next For Johnson Controls Stock After An 8% Fall Yesterday?
- Margin Expansion To Drive Johnson Controls’ Q3?
- What’s Next For Johnson Controls Stock After An Upbeat Q2?
- Here’s What To Expect From Johnson Controls’ Q2
- Here’s What To Expect From Johnson Controls’ Q1
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