How to prove savings to a CFO

Why the naive comparison doesn’t hold

“We spent less this year” proves nothing, and whoever sits on the other side of the table knows it. From one year to the next, the price of energy changes, so do the harshness of the winter, the opening hours, the number of sites, sometimes the format. The final bill mixes everything together, and either credits the project with merit it doesn’t have or strips it of results it actually achieved.

Proving a saving means separating what you did from what happened around you. That is exactly the problem measurement and verification protocols solve.

The baseline, and what it must contain

The baseline is the consumption the site would have had without the intervention, adjusted to the conditions of the period you are measuring. It’s built on historical data, typically the previous twelve months, linking consumption to the variables that explain it.

Variable	Why it goes into the model
Degree days	They separate the project’s merit from a mild winter or a scorching summer
Opening hours	A schedule change or an extra Sunday shifts consumption without anyone doing anything wrong
Store activity	Receipts, covers, or footfall: in food and restaurants the link to consumption is direct
Energy price	It must be kept separate from kWh: you can act on volumes, not on price

The saving is the difference between the baseline adjusted to current conditions and the consumption actually measured. It is not the difference between two energy bills.

IPMVP, the protocol that gets the parties to agree

It is the international reference standard for measuring and verifying energy savings (International Performance Measurement and Verification Protocol). It provides four options, chosen based on what was touched and what can be measured.

Option	How it measures	When it’s used
A	Isolated measurement of the intervention, with some parameters estimated	Targeted replacements with well-known loads, for example lighting
B	Isolated measurement of the intervention, fully measured	Interventions on individual machines, with a dedicated meter
C	Whole-site measurement, from the main meter	Diffuse efficiency across a store, with several actions at once
D	Simulation calibrated on measured data	New sites, or sites with no usable history

In multi-site retail, Option C is used almost always. Because a store is acted on across several fronts at once, HVAC, schedules, refrigeration, and lighting, and because the main meter is the only instrument present in every site. Options A and B remain useful for certifying a single intervention when it needs to be demonstrated separately.

Gross savings and normalized savings

Gross is the flat difference between before and after. Normalized corrects for climate and price, and answers the real question: how much would we have spent doing nothing, under the same conditions.

The two numbers rarely coincide, and the distance between them is informative. On a restaurant site we manage, over seven months of operation the gross saving was 18.7 percent and the normalized one 25.6 percent: the context had worked against us, so the project’s real merit was greater than what the energy bill showed. In absolute terms, that’s 37,190 kWh not consumed on a single site, in seven months.

It pays to bring both numbers to the meeting. Whoever presents only the one that suits them loses credibility at the first question, and the question always comes.

The line items that usually stay out of the math

A business case built on kWh alone underestimates the value, because it ignores what monitoring prevents.

Item	How to quantify it
Energy not consumed	kWh avoided multiplied by the actual average price, not the list price
Failures caught early	Number of anomalies detected times the average cost of an emergency intervention, which is a multiple of a scheduled one
Product not lost	Cold chain events avoided times the average value of the goods on display or in storage
Labor hours	Time that store staff and technical management currently spend checking by hand
Business interruption avoided	Hours of closure not suffered, valued at the store’s hourly margin

The tax lever on interconnected assets

For investments in technologically advanced capital equipment, Italian law provides an uplift of the asset’s cost for the purposes of deductible depreciation. It is not a credit that can be offset through the F24 form, Italy’s standard tax payment form: it increases the deductible share along the depreciation schedule, and applies to both purchase and leasing.

The requirement that matters is interconnection: the asset must communicate with the management system, produce data continuously, and be traceable. Sensors connected to a monitoring platform fall within this perimeter by design.

To verify before putting it in the math. Rates, caps, time windows, and documentation requirements change with each Italian budget law. They must be confirmed with your own tax advisor against the rules in force at the time of the investment, before including them in a board resolution.