Building Energy Audit: What’s the ROI? (2021)

What is the ROI of a building energy audit?

If that is the question on your mind, then you’re in the right place. Today, you learn what an energy audit is and the benefits it can have on buildings.

Want to know more? Read on!

What is the purpose of an energy audit?

An energy audit is an inspection survey and an energy analysis of energy flows in a building. The aim is to conserve energy.

Energy audits can be done on all types of buildings – commercial, industrial, and residential.

In all buildings, energy audits are the first step to reduce energy costs and the carbon footprint. And those savings can be significant.

After all, 28% of all carbon emissions in the world are due to operational emissions in buildings (energy used to cool, heat, and light buildings).

This means that there are plenty of opportunities to save on costs and lower the carbon footprint of buildings. These savings stack up over a building’s lifetime, so energy audits typically pay themselves back many times over.

But how are energy audits done? That’s what we’ll look at next.

How is a building energy audit done?

Energy audits can be done in different ways. In fact, the term “energy audit” covers a wide range of energy studies, from quick walk-throughs to identifying major issues. There are also different procedures, such as the standard developed by the American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE).

What all standards have in common is that the procedure is used to identify the most efficient and cost-effective Energy Conservation Measures (ECMs) and Opportunities (ECOs).

Most well-known energy audit procedures focus on the following issues:

  • Analysis of buildings and utility data
  • Survey of real operation conditions
  • Understanding of building behavior
  • Analysis of energy conservation measures
  • Estimation of energy-saving potential

Energy audits differ for different types of buildings

Energy audits are done differently for different types of buildings (residential, non-residential, and industrial buildings).

For residential buildings, proper insulation will create the best energy savings. But for industrial buildings, production equipment, HVAC, and lighting are the most energy-intensive applications.

Because commercial and industrial buildings tend to be much more complex than residential buildings, they also require more thorough energy audits. So, how are energy audits done specifically for commercial buildings? Let’s take a look.

The different energy auditing levels for commercial buildings

Not all commercial buildings have the same requirements and that’s why ASHRAE has three levels of energy audits for commercial buildings. The applicable level depends on factors such as building type, age, objective, and goals. Each level has different scopes, which are:

ASHRAE Level 1: Walk-through audit

Level 1 is a simple audit with the aim to identify clear energy problems. It involves a preliminary Whole Building Energy Use (WBEU) analysis based on an analysis of previous operating data, utility use, and costs. It also includes a comparison of similar buildings.

A Level 1 audit proposes simple, low-cost upgrades and is used to assess if a more in-depth audit is needed. Level 1 can include more cost-intensive suggestions with a potential cost and savings analysis. The purpose is to help the building owner understand how the building performs, establish a baseline for measuring improvements, and confirm if further evaluation is needed and what to focus on.

ASHRAE Level 2: Energy survey and analysis

Level 2 builds on Level 1. It’s a more detailed audit with an energy use survey that provides a detailed analysis. Level 2 can involve advanced on-site measurements and computer-based simulations to evaluate energy retrofits. Building owners will easily understand the areas of operation that offer the best opportunities.

For the on-site assessment, building managers, owners, operators, and occupants are also interviewed to get a better understanding of how the building operates and to identify challenges and goals.

Plus, level 2 can include diagnostic testing, such as airflow, temperature measurements, water flow, electrical testing, and infrared thermography.

With an energy model or building simulation, a detailed and cost-effective scope of work can be created. This includes a cost and savings analysis.

Also, an audit report with building conditions, proposed energy savings, and operational characteristics is developed. This will list improvements that need more capital and further analysis of potential costs and savings.

ASHRAE Level 3: Detailed Analysis of Capital-Intensive Modifications

Level 3 is the most detailed audit with an analysis of capital-intensive modifications. It focuses on costly energy conservation opportunities and is a long-term project. Level 3 includes the collection of data over a long period of time to understand operational opportunities and other energy conservation measures. Energy and cost-saving calculations tend to be more accurate because of the scope of a Level 3 analysis. This type of building energy audit is mainly done for complex buildings.

Ensure that your needs are met

Energy audit standards like ASHRAE offer a baseline for energy audits. But what the actual procedure looks like depends on the energy auditing consultant you contract.

To ensure that you get your needs met, tell your consultant what your requirements are in a  detailed scope of work. A knowledgeable consultant will know how to assist you to ensure your scope of work meets your goals.

Also, work with experienced energy auditing consultants who can help you save on as many costs as possible, while also maximizing your ROI. We recommend ASHRAE energy audits as the most comprehensive standard.

Do energy audits have a return on investment?

Now you know what energy audits are and how they’re used.

But what’s the ROI of these audits?

The answer is: It depends. Factors to take into account include the building’s age, measures that have already been implemented, and the type of building.

Also, as there are different types of energy audits and they go from quick walk-throughs to a major analysis, the benefits depend on the scope of the audit.

But it’s clear that energy audits have tangible benefits. These include:

  • Higher profits
  • Cost savings
  • Buildings with a lower carbon footprint
  • Higher ROI
  • Future-proofing against increased energy costs
  • Higher rental and sales valuations
  • Lower operational costs
  • Competitiveness
  • Reduced risks
  • Higher investments
  • And more

Especially for buildings with higher than average energy costs and older buildings, energy audits can mean significant cost savings, valuation increases, and higher sales prices.

For example:

A case study by the Institute for Market Transformation (IMT) shows that a building’s valuation increased by over a million US dollars after an energy audit was done to the building.

In Dubai, a scheme by Dubai Electricity and Water Authority (DEWA) offered energy audits to the public and private sector. As part of this scheme, 257 energy audits were carried out between 2011-2017.

The buildings implemented most of the recommended measures. As a result, 153GW/h of electricity and 355 million gallons of water (the equivalent of 75,000 tonnes of carbon emissions) were saved.

And as this study shows, the savings for industrial buildings can be extensive. A preliminary energy audit was carried out on eight industrial facilities in Italy. With a specific factory energy model that was built as a result of an energy audit, it was demonstrated that the improvement of building envelopes and optimization of HVAC systems could reduce gas consumption by 15% a year.

The annual economic savings amounted to EUR100,000 (USD121,230) and the simple payback time of the proposed thermal retrofitting was evaluated to be less than six years.

As you can see, energy audits can have a significant impact on the cost of running a building. As savings stack up year after year, it’s clear that the ROI of energy audits can be considerable.

Want to learn more?

There you have it. Now you know what a building energy audit is. You also know what its benefits are.

Ultimately, energy audits can help you save money and create greener, less resource-intensive buildings.

Want to know how your project can benefit from an energy audit? Contact us.