Most manufacturing finance leaders can spot a bad investment from a mile away. But the trickier ones? They’re hidden in plain sight.
It’s easy to overlook the millions of dollars quietly bleeding from aging infrastructure in the sneaky form of inflated utility bills, expensive emergency repairs, and valuable staff time consumed by reactive maintenance.
When these issues become impossible to ignore, many leaders tap into precious capital budgets to fund modernization projects. The problem? They’re using capital dollars to fix issues that don’t generate capital returns. Meanwhile, high-ROI growth initiatives are stuck waiting another year in the CapEx queue.
In this way, legacy mechanical systems cause much bigger problems than inefficiency—they also erode margins, create costly maintenance backlogs, tie up internal resources, and drain dollars that should be used to fuel expansion, automation, or innovation.
But smart manufacturing CFOs are flipping the script with a new model that frees capital and turns infrastructure into a catalyst for enterprise growth.
It’s called infrastructure monetization.
With this new financing and delivery model, manufacturing leaders can modernize their entire facility portfolio while keeping upgrades off the balance sheet, outsourcing the project delivery lift, and locking in guaranteed savings from day one.
Here’s how infrastructure monetization enables organizations to upgrade their facilities at scale and reclaim their most strategic resource for business growth: capital.
When CapEx is misaligned, the business pays
Most facility upgrades follow a traditional CapEx path that’s slow, fragmented, and often reactive. The drawbacks are real, and the costs are measurable.
1. Delayed action means escalating costs
Capital approval cycles are lengthy and unpredictable. Projects often face multi-layered reviews, multi-quarter delays, and budget competition with revenue-driving priorities. In the meantime, energy waste and deferred maintenance risks continue to drain margins.
Every year of inaction adds cost in the form of:
Higher utility bills
Old infrastructure is notoriously inefficient, driving up energy use and inflating utility costs. For manufacturers, that translates directly into avoidable margin erosion.
Take Volvo’s New River Valley plant, for example. Facility leaders recognized that improving the site’s energy efficiency was critical to keeping operations viable, so they implemented targeted upgrades—including a high-efficiency radiant heating system—and made strategic changes to how energy was used across the facility. Within a year, they cut electricity consumption by more than 7 gigawatt hours and realized over $400,000 in annual energy savings.
Had they waited, expensive utility costs would have continued draining thousands from the bottom line each month. It’s a clear reminder that inefficient infrastructure presents a hidden threat to profitability.
Expensive emergency repairs
In addition to higher utility costs, aging equipment is prone to unexpected breakdowns, leading to costly emergency repairs. Unlike routine maintenance, these urgent services come at a premium, driven by overtime labor, rush-order parts, and expedited scheduling.
Worse, the pressure to get systems back online often results in short-term fixes rather than lasting solutions, perpetuating a cycle of failures, downtime, and reactive spending that steadily erodes both capital and productivity.
Unplanned downtime
According to the 2024 State of Industrial Maintenance Report, MRO professionals cite aging equipment as the leading cause of unplanned downtime. When critical systems fail without warning, production halts, timelines collapse, and recovery efforts pull teams off production and growth-related work.
The financial impact of these unexpected breakdowns is significant: The same report estimates that the average hourly cost of unplanned downtime is around $25,000, and for larger organizations, it can climb upward of $500,000.
With exorbitant costs like those, it’s clear that minimizing unplanned downtime is more than just an operational best practice for manufacturers. It’s a financial imperative.
2. Site-by-site budgeting leads to missed savings opportunities
If you are upgrading your facilities one at a time, you’re putting out fires, not managing a portfolio.
Upgrading one facility at a time results in inconsistent performance, missed savings opportunities, and a patchwork of systems that are difficult to manage and scale. This site-by-site approach to infrastructure upgrades traps savings and makes it impossible to drive enterprise-wide modernization projects efficiently.
3. Deferred maintenance burdens internal teams
Internal Level of Effort (LOE) is one of the most underestimated costs in infrastructure management, and one of the biggest unlocks for operational efficiency.
With legacy systems, your staff’s LOE increases as they spend countless hours coordinating vendors, sourcing obsolete parts, and reacting to breakdowns. That’s time they could be spending on bottom-line growth initiatives like production optimization, expansion planning, or manufacturing widgets.
A strategic shift for portfolio-level upgrades
This is where infrastructure monetization comes in. More than a financing model, it’s a capital strategy, one that allows CFOs to stop overinvesting in non-core infrastructure and start reallocating capital to high-return initiatives.
With this model, infrastructure upgrades are funded through the OpEx budget, rather than the CapEx budget. A third-party partner handles the entire program, including engineering, installation, multi-vendor coordination, and long-term performance, while the organization pays a predictable Energy-as-a-Service (EaaS) fee tied to guaranteed results.
The result? Immediate operational gains and reclaimed capital for high-impact investments that drive competitive advantage.
Outcomes of infrastructure monetization
1. Free capital for high-ROI investments
Rather than tying up CapEx in lighting, HVAC equipment, or renewable systems—infrastructure that doesn’t directly generate revenue—organizations can fund investments that actually move the needle, such as automation, capacity expansion, or nearshoring strategies.
Infrastructure monetization allows you to reallocate capital to projects that drive growth, without postponing critical facility needs.
2. Immediate, verifiable cost savings
Infrastructure monetization saves organizations money in two ways:
Energy savings.
By deploying high-efficiency systems, such as LED lights, advanced HVAC systems, and smart controls, organizations achieve significant reductions in energy consumption. The American Council for an Energy-Efficient Economy claims that service-based models can deliver energy savings between 20% and 25%. With infrastructure monetization, organizations can realize these savings across every facility in their portfolio, amplifying returns at the enterprise level. The partner verifies and shares these savings through real-time, data-backed performance reporting to ensure transparency and accountability.
Maintenance savings.
Newer systems typically have fewer breakdowns, extended asset life, and lower operating costs. By analyzing current maintenance spend and historical maintenance logs, infrastructure monetization partners help companies benchmark current spend and measure reductions after upgrades, resulting in longer equipment life and lower service costs.
3. Reduce internal burden and resource strain
Under an infrastructure monetization model, the partner manages and executes the energy and equipment upgrades across the portfolio. This turnkey delivery enables industrial organizations to leverage economies of scale and benefit from centralized project management.
Your team doesn’t have to manage contractors, juggle scopes, or coordinate installs across facilities. Instead, your team can focus on what they were hired to do—running the plant, making products, and improving performance.
4. Modernize at scale, faster
Without CapEx bottlenecks, companies can implement standardized upgrades across multiple sites in parallel. This accelerates energy savings, increases reliability, and improves employee safety and comfort without drawing on internal resources.
What used to take years and dozens of team members can now be done in months with a single partner.
5. Improve financial flexibility
Keeping infrastructure spend off the balance sheet means better metrics, more borrowing headroom, and a stronger position with investors and lenders.
Infrastructure monetization helps you protect your debt ratios and unlock financial agility, without sacrificing operational improvement.
Stakeholder value: Aligned goals, shared wins
Ultimately, infrastructure monetization aligns finance, real estate, and facility leaders around a shared solution, providing each with unique benefits tailored to their respective areas of responsibility.
Finance leaders
Keep infrastructure spend off the balance sheet and free up capital for strategic growth opportunities
Improve EBITDA with verifiable savings
Execute facility modernization projects with zero upfront investment
Improve predictability with fixed costs and guaranteed results
Real estate leaders
Deploy upgrades across the full portfolio with speed and consistency
Simplify project oversight through one vendor and one program
Enhance resilience with upgraded facility systems operating at optimal efficiency
Gain portfolio-wide visibility with standardized performance data across facilities
Facility leaders
Offload project execution, design complexity, multi-vendor coordination, and ongoing support for facility upgrades
Reclaim time and focus on core growth initiatives that directly impact production efficiency and the bottom line
Achieve immediate operational gains with lower energy costs, fewer breakdowns, better lighting and air quality, and increased worker safety
The real OpEx advantage: Fund returns instead of repairs
The OpEx advantage isn’t about finding a workaround—it’s about building a smarter financial strategy.
When you stop treating infrastructure upgrades as isolated CapEx projects and start viewing them through a capital allocation lens, you unlock a new level of financial performance. Infrastructure monetization lets you modernize faster, operate leaner, and invest smarter without draining internal resources.
Redaptive’s Infrastructure Monetization™ model is a turnkey solution that scales across portfolios with minimal disruption and no upfront investment. We implement standardized improvements through a programmatic model that ensures consistency across sites and frees up your CapEx budget, allowing you to focus on funding what truly drives your business forward.
Ready to put your capital to better use?
Let’s talk about how Redaptive can help you modernize at scale without compromise.
