An energy orphan is a capital project that does not get undertaken because decision makers consider the project to have too long a return horizon (payback period). An example would be upgraded windows, which have large capital costs.

Rather than blending this sort of long-term return project with other items that create net cash flow or net operating income quickly, the project is deferred or, even worse, abandoned (“orphaned”).

Often, the quick or medium-return projects are still undertaken, with the result that when window replacement can no longer be avoided, there are no other retrofits that can be bundled with it to reduce the impact on cash flow. Now, the organization will have to pay for the window upgrade out of cash reserves instead of through blended project savings.

Back to Step 2