Traditional approach for reducing energy and waste in industrial processes typically focus on improving the efficiency of the primary energy conversion equipment. Unfortunately, this approach frequently results in incremental improvement at high costs, since most energy and mass conversion equipment is relatively efficient to begin with and upgrading to higher efficiency equipment is usually quite costly. In this article, we describe an alternative approach that begins by focusing outward to the distribution system and energy conversion equipment. We call this protocol the “INSIDE-OUT” approach, and suggest that it is a manifestation of the exergy analysis method.

To support this assertion, we develop the thermodynamic bases for the “Out-side-in” and the “Inside-out” approaches to identifying savings We then demonstrate the comparative effectiveness of the “inside-out” approach using approaches from lighting, air compressors, and electroplating. Finally, we show why the inside-out approach leads to greater sustained savings over time.