Green Bank Academy - Objective Function
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Transcript of Green Bank Academy - Objective Function
The Objective Function Tracking Program Performance and Aligning Outcomes with Strategic Goals
Objective function measures program performance, aligns programs, goals
• Purpose of objective function is to clarify what you are trying to accomplish
• Must be a formula that enables you to focus on maximizing a particular outcome
• Objective function aligns program with strategic goal
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Objective Function
A quantitative metric that captures
the desired program outcome,
which a Green Bank seeks to maximize.
Objective function is maximize clean energy per dollar
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X kWh produced
$1 at Risk
or
Clean Energy Produced or Energy Saved
Dollars Spent, Held, Financed
Y MMBtu’s or $Y saved
$1 at Risk
• Generate/save more energy, objective function goes up • Spend fewer public dollars, objective function goes up
CEFIA residential solar objective function increasing over time
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Total CEFIA solar incentive dollars and annual kwh per dollar
Quantitative tracking enables green bank management
• Design programs aligned with green bank goals
– Provides guideposts that help program managers ensure all elements are oriented toward a unifying goal
• Measure program outcomes, effectiveness
– Serves as a measurement tool to track program success over time and compare effectiveness between programs
• Make informed decisions about dollar allocations
– Shows how dollars should be used within a product structure or between products to maximize the desired goal
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Compare programs across organizations
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• CEFIA can demonstrate that its program was far more efficient than the utility-run REC program
Objective function tracks progress and compares program effectiveness
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• Only by tracking program performance can a green bank know if it is meeting strategic goals
• Objective function is easily-understood ratio that shows how much clean energy you get per dollar
• Can be used to compare performance of programs and guide decisions for allocating dollars
Green Bank Academy
Washington, DC February 6-7, 2014
www.greenbankacademy.com