Profit From an Energy Audit

Posted on Monday, August 27, 2018

Companies routinely evaluate opportunities to reduce expenses. However, many organizations are unaware of the savings that can result from a business energy audit.

Not only are many of the savings from an energy audit sustainable, they are typically well received by  employees and customers. Even better, your company may qualify for tax breaks for making energy-saving changes (consult with your tax pro for details).

An effective energy audit begins with a data gathering exercise. Consider the following 10 steps:

1. Calculate your baseline energy use by reviewing utility bills. Building energy expenses such as water, electricity, gas and solid waste should be collated and analyzed for the previous three years. Any large variances should be identified and theories for the increase documented. This information will prove helpful during the physical inspection phase.

2. Gather the specs. Compile basic information regarding a building's specifications. These include:

Square footage,
Maintenance records,
The year of construction,
Construction blueprints, and
The number of exterior versus interior walls.

Another important factor to weigh is the year-round weather in the area where the building is located.

3. Conduct an inventory of major systems. Documenting the major systems that consume energy is crucial to understanding how costs can be reduced. For example, a large office with banks of elevators consumes considerable amounts of power, especially if the building is at, or near capacity. Does the building have overhead lighting that is rarely turned off or dimmed? Once all of the building's major systems have been identified and documented, it may be possible to determine how much each one costs to run and maintain each year. It may also be possible to document on a percentage basis how much of the building's total costs are attributable to each system. This analysis can serve as a baseline measure of how costs can be reduced.

4. Document how your facilities are used. The operating hours as well as the frequency of visitors entering and leaving a building can play a role in energy consumption. For example, if a building's lobby has considerable traffic, the building's doors likely allow cold air to escape and warm air to enter. As a result, the building's air conditioning may have to run continually to cool the building. Selecting the most efficient doorway system can make a difference.

5. Prepare a list of office equipment. Even the smallest offices have a boggling array of office equipment that can generate considerable energy costs. Depending on the number of employees housed in the office, there may also be a range of personal items that consume energy including fans, heaters, sound systems, and personal lighting.

6. Determine where you have lighting that remains on. Many large office buildings have banks of lights that are controlled by only one switch. Worse yet, once switched on, the lights remain on unless turned off by a thoughtful employee or concerned manager. Large office buildings lit up late at night may look attractive, but the energy consumption is often unnecessary as many offices are unoccupied on weekends and after 6 p.m. to 7 p.m. during the week. Your review should include whether the lights are turned off at night and weekends, as well as whether the building uses motion activated lighting in seldom-used areas such as restrooms or break rooms. Exterior security lighting can also be a waste as it is sometimes left on during the day. Document the number of exterior lights as well as when they turned on.

7. Are you running exhaust fans? Kitchen and restroom fans may run while the building isn't in use. Include a list of rooms that have exhaust fans and whether or not the fans are turned off when not in use. Also, ensure that the exhaust fan is appropriate for the size of the space that it is responsible for cleaning. A small or inefficient fan will consume electricity at a much higher rate than an appropriately sized unit.

8. Interview staff members. The people that spend time in the building will undoubtedly have thoughts to share on the building's environment. Many employees have strong feelings regarding how hot or cold a building should be. Ask them why they believe a building is too hot or too cold. Their answers may lead to simple fixes that result in a more acceptable temperature for all occupants. For example, if an employee whose desk is near the thermostat that controls the air conditioning prefers cool temperatures, that may explain why the building's energy costs appear higher than normal.

9. Check the level of insulation in your exterior walls, ceilings, floors and crawl spaces. Is the building's envelope sealed? Commercial buildings typically have a large number of windows and doors. Just like in your home, commercial properties should have the appropriate insulation around doors, windows and exterior walls. Further, windows that face the sun may be candidates for solar film to block the sun's rays and reduce the need for air conditioning.

10. Evaluate water usage. A dripping faucet or a toilet cistern that fails to cut off may not sound that serious. But over time the cost of the water wasted can be considerable. The systems that use water to function should be identified and efforts made to ensure they are running efficiently and are regularly maintained. Don't overlook outdoor water used in your company's landscape.

Many utility companies perform on-site consultations of businesses and inform them how they can reduce use and save money. Or the steps above can be performed by a suitably qualified company employee. Once the initial audit is complete, in order to dramatically improve a building's energy efficiency, you may want to consider engaging a specialist to develop an energy efficient plan.

Posted in Tax And Accounting Topics For Business

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.

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