Commercial, Demand Management, Distributed Energy Resources, Energy Efficiency, Industrial, Utilities - February 10, 2016 - By Shira Weintraub
Eight steps to winning support for energy efficiency projects with utility data
Today more than ever, companies are exploring effective ways to improve energy efficiency and better control costs. However, convincing senior leaders and other stakeholders that specific energy efficiency projects are imperative to the business’s success is no easy task.
These days, with access to a much more expansive volume and variety of data, energy and sustainability managers have the opportunity to develop a compelling case for improving energy efficiency and to engage wider stakeholder groups.
In this article, we outline suggested steps for how to use utility data to win support for energy efficiency projects.
Step #1: Develop an energy consumption baseline with utility data.
Developing an energy consumption baseline is a critical first step to proving the degree to which different energy efficiency projects and programs will impact usage, cost and carbon emissions.
Utility bills, whether from paper, EDI feeds, or third party data collection services, can provide insights into how and where a company is using energy. To create a baseline, it is important to have a reliable stream of historical utility data for a minimum of 12 months. Given a limited budget, it’s best to start benchmarking more energy-intensive facilities or regions that have a high volume of accounts behind one provider.
Once the data has been aggregated, third-party applications, such as those provided by ENERGY STAR and other software providers and ESCOs, can help easily visualize and assess energy consumption.
Step #2: Compare the energy usage of similar facilities and assets.
High-efficiency facilities and assets can be isolated and mined for best practices, while low-performing facilities and assets can be prioritized and targeted for improvement.
Properly categorizing facilities and assets is key to understanding how they are performing within their group and then how these groups compare to each other. Common attributes to consider include the type of building or function of the asset and square footage of the location. Buildings and assets can be further classified by age, design, frequency of maintenance and associated sales revenue.
Once facilities and other assets are appropriately categorized, energy usage can be compared among like entities and evaluated against industry standards.
Step #3: Compare peak demand of similar facilities and assets.
Not only is it important to compare the energy consumption of like facilities and assets, but it is also wise to compare peak demand, a line-item on most utility bills. Peak demand represents the maximum energy consumption at one point in time during the billing cycle.
Step #4: Investigate the best and worst performers for each category with interval meter data.
Interval meter data can be used to gain a more granular perspective on why a facility or asset is performing poorly and build a strong case for energy efficiency improvements. In instances when interval meter data is not sufficient or too hard to access, energy and sustainability managers can interview facilities managers at locations that already appear to be top and bottom performers and conduct building audits.
The source of energy demand and consumption issues may be related to behavior, equipment, design, sales or other factors. Without close inspection of energy consumption outliers, proposed energy efficiency projects will be based on guesswork and intuition, and it will be inherently more difficult to argue the benefits these projects potentially offer the organization.
Step #5: Calculate the cost of inaction.
An effective way to gain support for energy efficiency projects is to measure the cost of inaction. What would the risks be of doing nothing two, five and 10 years down the line? How would energy consumption and costs threaten the business?
Taking the current state of gas and electric consumption and costs, then using this information in conjunction with a company’s expected growth and other related factors, energy and sustainability managers can forecast future carbon emissions and costs assuming no energy efficiency programs or projects are to be implemented. The model can go as far as to include predictions of severe weather events and fines for violating government regulations. Although several assumptions will need to be made, as long as they can be justified, the model will represent a relatively accurate picture of what the outcomes of inaction look like.
Step #6: Calculate the ROI for new investments using utility bill data.
It is important to capture both the short-term and long-term costs and benefits of investing in specific energy efficiency projects. Utility bills contain the cost data that can turn energy consumption and demand into dollars. The U.S. EPA's Energy Star program and other energy solutions providers offer financial calculators to help determine the value and payback of energy efficiency improvements.
Energy and sustainability managers should calculate the ROI of specific energy efficiency projects and investments for worst-performing facilities and assets, as these will likely bring the most bang for the buck. With a baseline in place, they can set a reasonable threshold for more expensive upgrades, such as retrofitting.
Step #7: Quantify less tangible and indirect financial benefits of energy efficiency projects.
Energy efficiency improvements and the associated data collection can impact a variety of departments, including accounts payable, procurement, operations, marketing, energy management, and sustainability, so quantifying less tangible benefits is necessary to encompass the full effect of energy efficiency projects. For example, utility bill data can also be integrated into a company’s bill payment system, used to create a price-to-compare, or included in an RFP that asks about carbon emissions. Additionally, energy efficiency improvements can positively affect investors, employees and consumers.
The more these benefits can be highlighted and quantified, the more likely energy efficiency investments will be supported by a company’s stakeholders.
Step #8: Track and show results.
To continue gaining support for energy efficiency projects throughout the organization, progress must be tracked and results must be proven. Utility data can again be leveraged to measure and verify the improvements in energy consumption and costs after behavioral modifications, changes in maintenance, and equipment upgrades.
In summary, winning support for energy efficiency projects requires an organized, data-driven approach. Utility data can be leveraged in multiple ways: targeting efforts, revealing the underlying causes of inefficiency and how specific programs and equipment upgrades can create savings.
Shira Weintraub is the Customer and Partner Marketing Manager at Urjanet, the world’s first provider of automated utility data that enables organizations across all industries to make smarter, more profitable, and eco-friendly energy decisions. With a B.S. in Environmental Science and Economics from Emory University, she is passionate about sustainability issues particularly in the context of corporate environmental impacts. She is a LEED Green Associate and enjoys attending green networking events.
Learn more about the recently installed rooftop solar project at Pratt Industries in the video below.
- Power Forward 3.0: How the largest companies are capturing business value & addressing climate change
- DOE Better Buildings 2017 progress report: Successful strategies driving innovation and results
- Stanford's 4th generation district energy system
- Case study: CKE Restaurants' defrost controller pilot
- Green bonds: A primer for energy project financing