Energy Audits: Performing an Economic Analysis

By Gregory Hughel  
OTHER PARTS OF THIS ARTICLEPt. 1: The Different Levels of Energy AuditsPt. 2: Energy Audits: Analyze Energy Use, Review Utility Rate StructurePt. 3: This PagePt. 4: PRODUCT FOCUS: HVAC

Low- and no-cost measures typically are easy to implement, but getting funding for the capital projects can be more difficult. To make the business case for implementation and to determine if an identified energy-conservation measure is financially feasible, managers must perform an economic analysis.

This analysis should include:

  • energy cost savings the measure will deliver, including consumption and demand savings
  • the cost to implement the measure
  • additional maintenance costs the measure will require.

With the needed information to determine total savings and the total cost to implement the measure, managers can calculate the payback associated with the energy-conservation task.

In general, managers first should implement projects with the shortest payback period. Managers can base the approach for implementing projects with longer payback periods on the organization's economic approach and energy goals. These goals for an organization that is simply leasing a building for five years — a commercial office building, for example — are likely to be different from those of an organization that owns a building — a school district, for example. Aligning energy goals with overall organizational goals is essential to performing a successful energy audit.

Once managers have implemented the projects, the final step of an energy audit is measuring and monitoring the facility's operations and energy use to prove the projects have produced results. Managers can track progress in this area by reviewing utility bills and tracking savings from the energy-conservation measures.

This final step is likely to further emphasize the economic benefits of performing an energy audit because it will show the real savings associated with the audit and the opportunities it uncovered. Achieving energy-conservation goals will enable managers to build on their successes and set new energy goals for the future.

Gregory Hughel is a project engineer with Facility Engineering Associates, a national consulting firm focusing on extending the life of and making improvements to existing facilities.

Continue Reading: Energy Audits: The Path to Efficiency

The Different Levels of Energy Audits

Energy Audits: Analyze Energy Use, Review Utility Rate Structure

Energy Audits: Performing an Economic Analysis


Contact FacilitiesNet Editorial Staff »

  posted on 9/3/2010   Article Use Policy

Related Topics: