After the Energy Audit

Jan. 27, 2011
Congratulations! Completing an energy audit is a major undertaking for most organizations. You probably spent a lot of time and involved a lot of people. Just doing an audit is worthy of praise. Now get ready for the real work.

What comes after the audit is the key. Here’s where it gets complicated: because there is no one-size-fits-all strategy for setting and achieving energy reduction goals, there are no clear rules for how to implement the audit’s findings. Who should be involved, how much you should spend, how long you should wait before you make your money back – only you can answer these questions, because the right answers vary so widely.

Where Do I Start?
Should you pitch to the CEO the budget you’re looking for? Should you start working with an architect to make changes to your building? Should you look for a rebate for tax incentives? Don’t try to tackle too much too soon – just follow a few guiding principles to get started on the right foot.

First, make sure you really understand the results. When energy auditors come in, they gather information, run lots of numbers, and create spreadsheets – but you may still not understand how to use that information. Get electronic copies of everything, especially if you hired an outside energy auditing firm to conduct the audit. The report should be usable or modifiable over time, not a PDF document that can’t be updated.

Second, make sure you get access to every software password and account as part of the energy audit debrief. Get the login information so you can get in there and actually see the raw data for yourself.

Third, make sure you understand all of the calculations associated with the audit. There may be many places where exact data is not available, where the auditor has put in a national or regional average or a figure from your utility company. There are also places where you’ll make estimates based on limited information – for example, you might not know how full the building is at 8 p.m. on Fridays. Make sure you know where estimates were used and how the auditor arrived at each number.

Finally, review the audit’s recommendations immediately and go over any points of confusion while the results are still fresh in everyone’s mind. For example, my client’s recent energy audit resulted in 12 pages of analysis and about 70 pages of recommendations. The suggestions ranged from everything from having people turn off their computers at night all the way to weatherizing the building. Make sure you really understand what those recommendations say and whether they apply to one building or your whole portfolio of properties.

The Financial Impact of Environmental Stewardship
You have several options to calculate the financial impact of your initiatives. The first is a simple payback period – initial cost divided by initial savings. Factor in rebates and other incentives that shorten your payback time. Deciding what constitutes a good payback period depends on your company’s criteria for good returns; in general, anything with a payback time of three years or less is a pretty good contender for consideration. For example, a lighting retrofit with an upfront cost of $75,000 and an expected annual savings of $25,000 would give you that three-year payback time; adding a $25,000 utility rebate shortens that to two years.

You may also find that your company is more comfortable looking at return on investment calculations. Return on investment, or ROI, measures a project’s financial efficiency by dividing the benefit, or return, of the investment by the cost of the investment, and the result is expressed as a percentage or ratio. A $65,000 cool roof that saves about $15,000 a year has an ROI of 0.23 or 23%. Make sure you always calculate it the same way, as a ratio or as a percentage. You may want to do both types of calculations.

Set Your Ground Rules and Priorities
Ground rules narrow the scope of your audit considerations and provide minimum criteria for choosing high-priority projects. You may decide you don’t want to change anything structural. You can narrow your scope to just internal factors, like IT systems and internal temperature control, especially if you’re leasing and don’t have control over the building envelope.

If cash is at a premium right now, you might choose projects that don’t require a lot of upfront investment. Maybe you just want to make sure your payback time is less than three years or your ROI is at least 33%. Setting basic ground rules helps screen the recommendations that are not going to work. You can also incorporate timelines to prioritize things you can complete by the end of the year, especially when you want tax incentives or rebates that expire by a certain date.

Once you set your ground rules, decide how to prioritize. The first option is a simple yes or no system where you set up a column for each ground rule. Ask if the project is less than $25,000 up front and answer yes, no, or maybe, followed by “Does it have a payback time of less than three years?” and “Will it take less than 6 weeks to complete?” Projects with mostly yes answers, like caulking windows and doors or requiring employees to shut down their workstations at the end of each day, are high priority items.

If you want to get more technical, make a prioritization chart where you assign scores instead. You might decide that anything that has zero upfront cost gets a 10, less than $500 upfront gets a 9, and so on. For example, posting signs on light switches to remind people to turn the lights off when they leave the room would rack up a high score quickly due to its negligible upfront cost, excellent payback time, and quick implementation.

This technique adds additional information to your prioritization so you can identify the highest of the high priorities. You can also add qualitative elements like visibility to stakeholders or availability of incentives – i.e. how much of the cost is subsidized by utility rebates and tax deductions. One popular additional column is urgency – how important is it that we tackle this project right now?

Develop an Implementation Plan
Start by identifying one person responsible for each task. It’s tempting to assign these tasks to a department, but people are always more responsible when they know accountability lies on their shoulders alone. Also, choose start and end dates for each project.

What kind of support personnel do you need? If you’re installing occupancy sensors, you might place the ultimate accountability on the IT manager, but he’ll need support from the rest of the IT staff and others. Identify a budget, as well as other resources you’ll need. Always make sure you’ve specified your metrics for success so you can measure whether your initiative was successful.

Don’t overlook the role of behavior change. Three basic factors must be in place for any initiative to succeed – awareness, expectations, and resources. For every initiative, tell employees six things – who, what, when, where, why, and how – all the things they need to know to have a full understanding of the initiative. They need to know what changes you’re making, why, how they’ll be enforced, and so on. Employees must also understand what’s expected of them, which depends largely on what the initiative is. They first need to know “What does it mean for me?”, then “What’s the group responsibility?” and “What’s the corporate goal?” Address what happens if you do or don’t meet the expectation – for example, the company plans to save $17,000 on energy, and if this goal is met, half of that money goes into the year-end bonus pool. Positive incentives energize people.

Make sure everyone has the resources they need to participate effectively. Budget is the first one most people think of – you need $100 to buy some compact fluorescent light bulbs. You may also need resources relating to training or education, such as sending your facilities manager through a LEED green building course. Different IT or technology resources may be necessary, like software for energy tracking. Time is probably the most overlooked resource, because for a lot of initiatives, there’s a ramp-up time where you get over the hump to establish new habits and get used to the new status quo.

Create Champions
Designating a green champion in each department can be tremendously helpful for encouraging employee engagement. The employees are the ones who use your building and exhibit the behaviors that either do or don’t save you energy. Inter-office competitions can be very valuable – get employees to see who can save the most paper or who can reduce commuting miles the most. Create an energy saver award or incentivize them with a gift certificate. Publicly acknowledge the real champions of energy reduction in your building.

Think about tying the personal to the professional. Let people bring their ideas from home to work or vice versa. One common idea is that everyone in the office gets a CFL light bulb to replace an incandescent bulb at home.

Lastly, don’t forget that energy management is usually part of a larger carbon reduction strategy. Don’t just limit yourself to cutting electricity and natural gas. Think about it more broadly, in terms of carbon, and consider what energy management can mean for your organization’s overall sustainability plan.

Jennifer Woofter is the founder and president of Strategic Sustainability Consulting. She has more than a decade of experience in organizational sustainability, corporate social responsibility, and socially responsible investing.

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