1. Inventory Building Systems:

Labor and material shortages are straining the building industry, which is why outside maintenance costs are on the rise. Building systems like boilers, chillers, air handlers, and pumps have a useful life, and when repair and maintenance costs become more common on a particular asset, it is likely ready to replace. Our rule of thumb is, “If it’s from the 1900s, it’s ready to replace.”

Action item: Inventory your assets! Put together a spreadsheet of HVAC assets and maintenance cost for the previous 12 months. Extrapolate maintenance costs for 5 years and highlight and bold the total; that value is a realistic “bank” of savings that can be used to help fund energy efficiency upgrades. We use 5 years to be conservative as new systems may have new maintenance costs after a break-in period.

2. Understanding Energy Costs:

Energy efficiency programs start by establishing a utility baseline, whether it be electric, gas, fuel oil, or water/sewer. You do not have to “weather-normalize” the data, a simple month-by-month total is all that is needed to understand usage patterns and annual costs. Delivered fuels (oil and propane) are a bit trickier to analyze, but having delivery dates, costs, and quantity in tabular form will make your energy advisor happy.

Action Item: The utilities have a quick way of downloading 36 months, or more, of usage and cost history. Energy costs are volatile, which is why we recommend evaluating three years of utility data. Take the average of the previous three years for electric, fuel, and water/sewer costs, this average is a reasonable estimate for your energy baseline.

3. Sizing your Energy Program:

To provide a high-level, Energy Program budget, we first estimate attainable operational savings.  A good rule of thumb is that a comprehensive energy program saves an average of 25% of your annual energy costs.

A well-structured Energy Program can be self-funded using operational savings. Financing should always be considered for large Energy Programs to enable immediate action as opposed budgeting for specific pieces of equipment. 

There are many “Green” lenders and programs that offer below market rate loans for energy efficiency. Check with your local utility for more information on these special loans. Alternatively, there is C-PACE, Commercial Property Assessed Clean Energy, which offers competitive interest rate loans, but with loan terms up to 20 years. We encourage you to investigate the benefits of C-PACE to fund your energy efficiency program.

Action item: Estimate your energy efficiency program budget using this formula: