Asset Management 101: Energy Audits
Have you ever seen your utility bills and thought about how it’s harming your pocket? Have you heard about companies that commit to ‘energy-saver’ programs or have you been wondering how your building can be more energy-efficient?
Energy audits are a way of understanding – and suggesting improvements for – a building’s energy consumption. The intention is actually quite noble; the U.S. Department of Energy’s mission is to “ensure America’s security and prosperity.” (And of course there’s the fact that energy efficiency helps reduce overall operating costs, so you save money.)
Here is some background on energy audits, and what to expect when you find that you need one.
What is an energy audit?
An energy audit is a technical process of developing a thorough understanding of a building’s operations, and the way its energy-consuming components function. This process involves a site visit, an end user interview, an analysis of the utility bills, and a building energy benchmarking study to develop a list of potential energy conservation measures (ECMs).
Why do I need an energy audit?
With an increasing global push for higher energy standards and sustainable building operations, the need for reducing a facility’s energy and water usage has become more relevant than ever. Energy efficiency is achieved by using energy efficient HVAC and lighting and plumbing systems; optimizing building controls; and introducing sustainable operations and maintenance process. Over the last decade, practice of energy auditing for commercial buildings has evolved from a narrow focus to a generally accepted, best-practice status, and in a growing number of jurisdictions, is actually mandated by law. Several local, state and federal bodies require energy audit and benchmarking studies to be carried out at their facilities every five years, while some city and state governments have mandated an energy audit report as one of the required disclosures for all commercial real estate transactions. Energy audits are now also a component for tax credit applications, where the energy audit plays a vital role in directing the building rehabilitation process to be as energy efficient as possible. An energy audit report helps the end user gain better insight into the building operations and potential ways for reducing operation costs.
What are the different levels of an energy audit?
There are three levels of energy audit services as defined by the American Society of Heating, Refrigeration and Air Conditioning Engineers (ASHRAE).
ASHRAE Level-I Energy Audit: Involves primary walk through of the site, listing the potential energy saving opportunities and providing an approximate savings potential from the recommended ECMs.
ASHRAE Level-II Energy Audit: Involves detailed site inspection, development inventory of all major mechanical and lighting systems, energy benchmarking, savings and cost analysis on all ECMs and identifying ECMs to evaluated under Level-III analysis.
ASHRAE Level-III Energy Audit: Involves all the above, coupled with computer-based energy simulations and diagnostic testing (including combustion testing, blower door testing and duct testing) The Level -III audit is often referred to as an investment-grade audit, as the details are accurate enough to use for the basis of a large capital project financed through projected energy savings.
What is the process?
Generally, the process for performing any of these levels of energy audits is three-fold:
1. Setup and Preparation: Once contracted to perform the audit, your consultant should contact the site manager to schedule the site visit, ensuring sufficient time for informing the building tenants. The property manager should also be asked to complete a pre-survey questionnaire and locate specific documents, such as utility bills, in preparation of the site visit.
2. Site Investigation: The site assessor should conduct the necessary investigation at the site while capturing all potential ECMs. The investigation includes interviewing maintenance personnel, building tenants, looking through building drawings, and conducting a thorough inspection of all building components.
3. Comparison and Evaluation: The site assessor will then compare the findings to the actual utility consumption data and evaluate it against the prevailing weather data to understand how the building is functioning. The ECMs will be evaluated using energy simulators, and those that bring the opportunity to save energy and money will be recommended for implementation. The findings of this process will be formed into a report which will include an outline of the existing building components, energy benchmarking data, an analysis of existing energy consumption, a detailed explanation of the proposed ECMs and recommended operations, and a maintenance plan to ensure complete realization of the energy and maintenance benefit over the life of the component.
What happens next?
The consultant will typically submit a draft report, and then hold a review with the client before delivering the final report. The client is free to use the final report for assessing any funding or incentives that it might be applying for. Some consultants will also give the client access to the Energy Star benchmarking data, allowing them to make periodic updates to the database, thus constantly monitoring and comparing the building’s energy performances to its peers. In some cases, the report may recommend a Level-II or Level-III study.
The result of the energy audit is a report containing a prioritized list of potential energy conservation measures (ECMs). This report becomes part of an implementation plan. As part of the implementation, the owner/consultant will review available tax credits or incentives that can be leveraged to reduce the upfront costs.