Top 10 Energy Audit Problems

... and how Prism Engineering carefully addresses each one.

Prism Engineering conducts an average of 50 energy audits a year.  Our highly-trained energy, electrical and mechanical engineers and technologists devote a great deal of their time and effort to conducting energy audits at commercial, institutional and multi-unit residential buildings.  So when we heard that the February 2011 issue of the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Journal featured an article entitled "The 10 Most Common Problems in Energy Audits," our ears perked up.

Ian Shapiro, the article's author, was interested in why some energy projects achieve substantial savings while others do not. He looked to energy audits for possible explanations and found 10 common issues that greatly affect a project's ability to deliver on promised savings. The study conducted a high-level review of 300 US building audits and then looked in detail at 30 of them: 15 commercial and 15 residential. Below, using the framework set out by the ASHRAE article, we review these 10 industry issues and explain what Prism is doing, in each case, to ensure that our audits remain as reliable, informative, and valuable as possible.

#10 Inadequate Review

Obvious mistakes other than calculations

The 10th most common issue with energy audits are non-calculation errors due to inadequate report review. This would include mistakes such as duplicating sections of reports, or making the assumption that a condensing boiler is automatically over 95% efficient. To avoid these kinds of obvious non-calculation errors, Prism follows a comprehensive quality assurance and review process. All reports are written using the newest version of our energy audit template. This avoids duplication or misnomer errors. After an energy report has been drafted, the report is reviewed by Prism's Senior Energy Engineer, Ken Holdren. He begins with a detailed review of all calculation spreadsheets and then gives the report a thorough read-through for grammar, terminology and clerical errors. Ken, who has been with the company for nine years and has 30 years experience in the field, mentors Prism's energy audit team and is responsible for quality assurance of all energy management projects.

# 9 Energy Savings Estimation

Overestimation of energy savings

When making energy savings calculations, it is impossible to account for all factors that affect energy savings. However, Shapiro found that over half of the energy audits studied had savings that were twice as high as could be reasonably expected. At Prism, we are carefully conservative about our estimates. This approach reflects the complex nature of building systems and the effect that the people occupying these spaces and managing these systems can have on the results. High energy savings estimates can create unreasonable expectations and may lead to poor prioritization of measures.

Last year, BC Hydro conducted an independent review of Prism Engineering's energy audits and found that, on average, 87% of calculated savings were "approved". The balance may have been realistic but exceeded the thresholds set by the utility. By using hourly bin models to calculate savings for all weather conditions, and equipment data sheets and part load efficiencies to accurately model the energy consumption of major building systems, we are able to predict with a high degree of accuracy how much energy each measure can actually save our clients. Using these tools helps prevent assumption bias errors and errors due to poor modeling. Our tools are either developed in-house, or by reputable organizations such as the US Department of Energy or Natural Resource Canada. They are updated regularly based on feedback from our trained energy auditors and our continuing experience in the field.

#8 Billing Analysis

Inadequate billing analysis for measures and projects

Over half of the energy audits that Shapiro looked at did not include adequate billing analysis. While the ASHRAE Standard is to study at least one year of monthly data, Prism typically analyzes three years worth of energy data. This gives our clients a better understanding of the consumption patterns and energy costs of their buildings. We are able to run better regression analysis (a statistical technique used to determine the relationships between variables in order to predict future energy use) which allows us to properly understand how variables that affect energy use, such as weather or occupancy patterns over a particular period, affect energy consumption. This provides us and our clients with a baseline standard against which to measure energy consumption in subsequent years.

#7 Building Description

Building components poorly described or missing entirely

All energy audits should include a detailed description of all components of a building. Description and analysis of some components listed in Shapiro's article are more applicable to commercial and industrial buildings, while some are more appropriate for residential energy audits, such as infiltration, windows and wall/roof components. Prism focuses on HVAC and lighting systems for commercial, institutional and multi-unit residential buildings, because these are the systems that typically offer the best opportunities for energy savings in these building types. Our energy reports provide a detailed description of all major energy consuming systems and equipment in a building, based on all available information collected and observations made by trained energy engineers during site visits.

#6 Installation Costs

Installation costs underestimated or omitted

It is crucial that installation costs are properly reflected in the energy savings calculations. If no installation figure is provided for the implementation cost, there is a good possibility that the measures will be prioritized incorrectly and a more expensive project could be selected over a more cost-effective one. Furthermore, energy audit reports often provide an initial budget for implementing selected measures. If the installation cost is missing or underestimated, the project would be at risk of going over budget. Our installation cost estimates are based on 20 years of industry experience and the knowledge base of our diverse team of energy engineers. We are careful to conservatively estimate installation time, ensure that we have current quotes from suppliers, estimate any available incentives, and include all applicable engineering costs.

Installation costs are critical to the decision making process, but can be difficult to properly estimate because of fluctuating prices over time and between suppliers. We achieve a high degree of accuracy on lighting retrofit costing by having a detailed costing database. Developed in house, this tool helps our lighting team identify retrofit opportunities, model scenarios for different lamp and ballast options, and calculate payback for various alternatives. A recently implemented lighting retrofit measure at a B.C. university identified 800,000 kWh of projected savings, a 30% reduction in lighting energy costs. Using the database to calculate implementation costs, the project came in under the projected budget by 10%. Through conversations with our staff, we have discovered that we can provide even better information to our clients by creating an installation cost database for all mechanical systems and equipment types. Plans are underway to develop this tool with help from our mechanical department.

#5 Energy Savings Measure Selection

Selecting the wrong measure due to missing or incorrect information

The most common reason that energy auditors do a poor job of identifying and recommending energy saving measures is due to missing or incorrect information. According to the article, one of the most common errors is to recommend a measure with a longer payback than the expected life of the project. Other errors happen when energy auditors make biased assumptions, do not use life cycle costing, or underestimate equipment or installation costs. Our tight quality control process helps us catch potential mistakes and ensures that we are making good recommendations to our clients. The process begins with a well developed report template, includes careful calculations based on accurate data, and ends with a thorough final review by our Senior Energy Engineer.

#4 Life-cycle Costing

Failure to provide client with the "whole picture" afforded by Life-cycle costing

Unlike simple payback, life-cycle costing provides a holistic perspective on potential measures and helps clients and energy auditors make better decisions about which projects to pursue. In our energy audits, in addition to providing simple payback metrics, we also calculate the Internal Rate of Return (IRR) and Net Present Value (NPV) for all measures, as well as for the report as a whole. All of these figures are captured in a high-level overview table in the report summary to allow for easier decision making on the part of the client. This information helps our clients make the most effective business case to senior management, for the implementation of the energy savings measures. We also include various options for utility rates, such as 'no price escalation' and '2% annual price escalation'. We can't predict the future but we can provide reasonable models for possible scenarios.

#3 Equipment and Project Life

Overestimated or omitted

Because equipment or project life is so critical to accurate life-cycle cost analysis, Shapiro included this issue among his top three. Missing or incorrect information regarding project life can lead to poor measure prioritization. At Prism, we include project or equipment life in all of our NPV and IRR analysis, calculating it for every measure we recommend.

#2 Scope of Opportunities

Weak description of scope of measures

We provide our clients with all pertinent details about a particular measure in our energy reports, including the location, quantity of items needed, and the energy rating of the equipment. All of our reports include an explanation of the measure intent and a list of assumptions used in the calculations. We also provide design schematics for the more complex measures. Although Shapiro recommends including testing requirements, we don't often include this information in our reports. Given that some of our clients implement measures on their own after receiving our reports, we have decided to explore, with feedback from our clients, whether to include testing requirements in future reports.

Heat recovery system

#1 Missed Opportunities

Neglecting key opportunities

The most widespread problem in energy audits as identified by Shapiro is missed opportunities. Shapiro argues that comprehensiveness is widely recognized as a critical feature of all high quality energy audits. He provides a list of opportunities which he feels should be covered in every energy audit: high-efficiency HVAC, domestic hot water and lighting; lighting power density; lighting controls; wall or roof insulation; motors/drives; HVAC controls; and fenestration opportunities. While we agree that all energy audits should provide clients with a reasonable selection of options for implementation, his study combined results from energy audits of both residential and commercial buildings. In the context of Vancouver's mild climate, building envelope opportunities for commercial buildings such as fenestration measures or wall and roof insulation do not offer good returns and are sometimes difficult or disruptive to implement. These types of improvements are more appropriate for mid-to-small scale residential buildings. This list, therefore, might not be entirely relevant to clients with commercial, institutional or large-scale residential building portfolios who are trying to determine the comprehensiveness of an energy audit.

Prism has over 20 years of experience working with industry and commercial sector clients. The information in our energy audits is the result of careful study, precise calculations and meticulous review. Our reports are comprehensive in scope and allow our clients to make better decisions about proposed energy saving projects. Through site visits and client consultations, we spend the time necessary to really get to know our clients' buildings' systems. Our calculations and energy savings models are based on well-developed tools and our energy audit report template helps ensure we do not miss any opportunities. Despite the numerous systems we have in place to avoid these industry problems, we are always looking for ways to improve our audit process. Our team of highly skilled and well-trained energy staff at Prism Engineering strives for continuous improvement of our tools and services, in order to better help our clients save energy.