Conduct An Energy Audit
Conduct An Energy Audit
Conduct An Energy Audit
Prepared by:
New Jersey Department of Environmental Protection
Office of Planning and Sustainable Communities
May 2007
Developed by:
Jorge Reyes
Martin Rosen
Athena Sarafides
www.nj.gov/dep/opsc
Table of Contents
Introduction 1
Definitions 1
Overview of the Audit Process 2
Types of Energy Audits 3
Steps in Energy Auditing 4
Appendices
References 21
End Notes 22
Introduction
Improving energy efficiency and conservation are essential to achieving
environmental sustainability. They are the simplest ways to reduce greenhouse
gas emissions and other forms of air pollution such as acid rain and smog. Good
energy management starts with an energy audit. The dual benefits of dollar
savings and environmental protection from energy efficiency and conservation
improvements are highlighted in such an audit. Energy audits often address
other issues, too, such as indoor air quality, lighting quality and ways to improve
building-occupant satisfaction.
The purpose of this guide is to provide basic information on how to conduct an
energy audit, with a focus on building audits. Buildings consume nearly one-
third of the energy used in the United States.
Definitions
An energy audit identifies where energy is consumed and how much energy is
consumed in an existing facility, building or structure. Information gathered from
the energy audit can be used to introduce energy conservation measures (ECM) or
appropriate energy-saving technologies, such as electronic control systems, in the
form of retrofits. Energy audits identify economically justified, cost-saving
opportunities that result in significantly lowered electrical, natural gas, steam,
water and sewer costs.
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capital investment. In addition, accurate data from energy accounting/bill auditing
is crucial to making informed energy purchasing decisions in a deregulated energy
market such as New Jersey’s.
The report should contain documentation of the use and occupancy of the audited
buildings, as well as an assessment of the condition of the buildings and the
associated systems and equipment. The report also should include recommendations
on how to increase energy efficiency through improvements in operation and
maintenance (O&M) and installation of energy-saving technologies and energy
conservation measurers (ECM).
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Types of Energy Audits
There are three types of audits that are described below in order of increasing
degree of detail. The type of audit used is discussed at the preliminary consultation
stage. The best way to determine the appropriate type of audit is to look at the
Energy Use Index (EUI) of the facility or building involved (see Appendix A).
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As previously noted, the audit could be done either in-house or by use of
outside consultants, depending on the level of audit required and availability of
expertise and resources. Internal staff could carry out the walk-through audit.
When outside help from a consultant, contractor or independent energy auditor
is needed, the search and selection should be done carefully to get the best and
most reliable service. The following tips might be useful:
Preliminary consultation
The initial step is to consult with knowledgeable parties to determine the
most suitable type of audit. The complexity of the facilities, buildings and
systems to be covered by the audit are taken into account. Then, the parties
discuss and decide upon the criteria required to focus the audit, such as
management goal, level of effort and budget ceiling.
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At least two years’ worth of utility energy data should be compiled and
reviewed. (Note – not all municipalities will have these data – many just pay
by the meter as the bills come in and do not consolidate any bills. Some
reasonable estimate must be made from available information.) The data
coverage should include all delivered fuels including electricity, natural gas
and fuel oil. The information developed will be the basis for evaluating
characteristics of systems operations, establishing energy benchmarks4 vis-a-
vis industry/sector standards5 or averages, determining potential savings,
setting an energy-reduction target, and defining a baseline against which to
measure the effectiveness of energy efficiency/conservation measures to be
implemented.
To ensure all of the necessary information is on hand for an adequate
assessment of the energy-consumption data, perform the following tasks:
a) Obtain copies of all monthly utility bills and invoices for delivered fuel;
b) Classify utility bills either by meter or by building and put them
together into 12-month blocks using the meter-read dates;
c) Pinpoint location of all meters and sub-meters;
d) Identify which facility, building or space is served by which meter;
e) Estimate the square footage of the conditioned area for each facility/
building.
Use appropriate recording forms6 to enter data and sum up. The following
should be recorded: (1) energy usage in appropriate units7 (kWh, therms,
gallons, etc.); (2) electric demand (kW); and (3) cost/ rate schedule.
For facilities using only purchased energy, monthly use of each type of fuel must
be determined. The utility and fuel bills will provide information about past
usage of each type of purchased energy. A sample form8 for recording such data
is shown in Table 1.
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Table 1 - Monthly Energy Record
Month Electricity Natural Gas
Billing CCF Used Cooling Heating
kWh Used Actual Demand
Demand Degree Days Degree Days
January
February
March
April
May
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June
July
August
September
October
November
December
Note: Making sense of a facility’s energy costs can be complicated. For more
information, it may be useful to visit the Web sites of electric and gas utilities
operating in your area. The electricity or gas supplier can provide information on
the rate schedule applicable to each of a facility’s accounts. The following Web
sites of electric and gas utilities in New Jersey may have information on rates
and available rebate programs.
Demand and usage are the two basic cost components that should be inspected
on any commercial electric monthly billing.9 By closely examining each of these
items, one can determine where electricity costs are being incurred and where it
would be most beneficial to spend time in reducing them (Studebaker, 2000).
These electricity cost components are (as reflected in Table 1 above):
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winter [January]). The purpose of this record is to document (by day as
well as time-of-day) variations in the electrical demand of the facility. Once
the information is received on the peak periods, a determination can be
made as to the corrective action10 to take.
On-site inspection
This step involves detailed inspection of building components and systems
and responding to issues/questions raised in the initial assessment. As a
rule of thumb, an entire day is recommended to be spent on-site for each
facility/building. The actual amount of time needed will depend on how
thorough the initial data gathering and assessments have been, the need
for measurement and testing equipment, and complexity of the facility/
building and their associated systems.
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Data analysis and evaluation
Follow-up assessment to the on-site inspection is a necessary and important
step in ensuring the audit’s value. Information obtained during the inspection
has to be evaluated. The analysis of audit data involves calculating energy
efficiencies. Electric demand data and thermal data analyses should be used
to assess energy savings opportunities. Recommendations on mechanical,
electrical, lighting, structural, operational and maintenance improvements will
be developed at this stage. These recommendations comprise ECM and O&M
measures that are identified based on key indicators (see Appendix A) derived
from the audit data, records examined and actual inspections.
The energy efficiency of each piece of equipment, process or system that are
used or operated within the facility should be determined. Energy efficiency
can be defined as:
EE = {(energy input – energy wasted)/energy input} x 100
A variety of tools and technologies used to perform residential building
energy audits and commercial building energy audits include measurement
of energy waste. Examples of technologies needed to measure energy waste
are:
Blower Door - This device includes a fan mounted on an insert that fits
inside a doorway, allowing negative pressure to be generated inside a
building to measure air leakage.
Infrared Imaging - Infrared photographs
create a visual indication of heat leaks from a
building.
Duct Leakage Testing - Most heating and
cooling ducts leak energy, so technologies are
available for testing ducts for leaks. For further
information, visit www.eere.energy.gov/EE/
buildings_energy_audits.html.
Reporting
The last and final step is the organization of the audit into a comprehensive
report. The audit report should be prepared keeping in mind the various
audiences that will be using each section.
The final written report should include data, recommendations, savings
estimates, and cost estimates for recommended conservation measures and
systems improvements. Appendix B shows an outline of the fundamental
elements of an audit report.
Note: After the audit has been conducted and the report reviewed, your local
government may decide to implement energy-efficiency strategies as part of
your next steps. Appendix D contains a brief description and contact
information on the New Jersey Clean Energy Program (CEP), which provides
financial and other incentives for energy-efficiency projects. Additional financial
incentives for renewable energy can be obtained from the NJ Board of Public
Utilities (BPU), the agency managing the CEP.
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Appendix A - Key Energy Audit Information and Indicators
1. Building Profile
Since energy audits usually focus on buildings, it is necessary to develop a building
profile, which includes collecting architectural, mechanical and electrical blueprints,
drawings and specifications of the original building; inspecting any building
remodeling or additions; and reviewing previous studies or energy audits involving
the building.
Another useful item that should be obtained or made is a site sketch of the building,
facility or complex. The following data items should be shown on the sketch:
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During the pre-site inspection review, areas of specific interest should be noted
along with questions about equipment maintenance practices, HVAC zone
controls, setback operation, and lighting systems and controls.
By monitoring the EUI13 based on a rolling 12-month block of utility bills, the
performance of a building can be assessed in terms of decreasing or increasing
energy-use trends. However, a minimum of two years of energy-usage data will be
needed in order to get a trend line.
3. Load Factor
Another important indicator to consider is Load Factor (LF), which relates
electric demand (kW) and electric use (kWh). LF is derived by dividing the
monthly electric use by the demand by the number of hours in the billing period.
This yields a ratio of average demand to peak demand and therefore indicates
the cost-savings potential of shifting some electric loads to off-peak hours to
reduce peak demand. A sample LF computation is shown below:
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Theoretically, the maximum LF for a building/facility that uses electricity at a
steady rate at the highest demand registered on the demand meter is one. A
load factor of one implies that there are no time-of-day peaks in demand, or
simply that consumption does not vary. LF is normally below the theoretical
maximum because most facilities do not operate at full capacity on a 24-hour
basis. A low LF indicates that a building or facility experiences substantial peak
demand at some time in the billing period, relative to average energy demand
during the billing period. The causes of demand peaks have to be pinpointed
and controlled. In the case of buildings and facilities with high LF, there is no
way to reduce demand except by using highly efficient electrical equipment.
It is therefore critical to monitor the LF and determine what is normal for each
building/facility, watching out for deviations in the normal pattern of electric use
and LF. Facility management could restrict operation of nonessential equipment
during peak demand periods, shifting their schedule of operation to off-peak
hours. Energy management control systems are equipped with capabilities to
limit demand and shed load, and these can help maintain acceptable load
factors. Peak demand also can be reduced by installing more efficient equipment
(this is the rationale behind utility demand-side management programs).
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Appendix B - Annotated Outline of the Energy Audit Report*
1. Executive Summary
Includes a brief introduction to the facility and describes the purpose of the
audit and overall conclusions.
2. Building/Facility Information
This section provides a general background of the facility, building
components, mechanical systems, electrical systems and operational profile.
A description of the building envelope, age and construction history,
operating schedules (e.g., for mechanical lighting), number of employees,
occupancy patterns, and a discussion of the O&M program should be
included.
The building information section also should contain a floor plan, selected
photos of the facility and mechanical systems, a description of energy types
used, and a description of the primary mechanical systems and controls.
3. Utility Summary
This section provides energy accounting information for a minimum of the
last two years, as well as selected charts and graphs that should be easy to
understand and should demonstrate the overall energy-usage patterns of the
facility or building.
Pie charts of energy use and cost by fuel type can offer compelling
documentation of overall energy uses and expenses. The utility summary also
includes reports of overall facility benchmarks, energy-use indices, and
comparisons with sector/industry averages. A copy of the utility rate
schedules and any discussion or evaluation of rate alternatives for which the
facility may qualify can be part of this section.
4. Energy Conservation Measures (ECMs)
This section summarizes the ECM that meet the financial criteria established
by the facility owner or manager. The report should provide the estimated
cost, estimated savings, and simple payback14 for each measure in a
summary chart. A one- or two-page description of each ECM and supporting
calculations should follow this summary chart. The description of each ECM
should include energy use and savings calculations and economic analysis
and list any assumptions that were made regarding operation or equipment
efficiency. ECMs that were considered but did not meet financial criteria
should also be identified.
* Adapted from: Younger, B. 2000. “Energy Audits” in Energy User News. July 10, 2000.
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5. Operation and Maintenance Measures
This section covers observations on items that will reduce energy usage and
costs, address existing problems, or improve practices that will help prolong
equipment life of systems not being retrofit. Costs and energy savings of
each O&M recommendation should be listed.
6. Appendices
Information in this section may include floor plans and site notes; photos,
audit data forms; motor, equipment, and lighting inventories; and equipment
cut sheets of existing or recommended systems.
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Appendix C - Economic Analysis Methods for
Energy Projects
An economic evaluation must be conducted of each of the energy-efficiency
projects or ECM identified in the energy audit. A number of the economic
methods described below are available for this purpose. A more detailed
discussion of financing and analysis of energy-efficiency investments may be
found in the various references/tools developed by the Energy Star program
such as Financing Energy Projects (www.energystar.gov/ia/business/
government/Financial_Energy_Efficiency_Projects.pdf) and Energy Star Cash
Flow Opportunity Calculator (energystar.gov/ia/business/CFO_01July04.xls).
Simple Payback (SPB) – This is the least complicated of the available
methods. SPB measures how long it takes to recover an initial investment in a
cost-saving measure. For example, a $1,000 investment that saves $200 per
year has an SPB of $1,000/$200/year = 5.0 years. Although widely used to
support decisions, SPB fails to consider the time value of money and to properly
consider the impact of cash flows.
Discounted Payback (DPB) – The time value of money issue can be resolved
by discounting future cash flows to their present value and determining the DPB
period, or the length of time it takes for the cumulative present value of savings
to equal the investment cost.
Return on Investment (ROI) – Sometimes referred to as the simple rate of
return or the investor’s rate of return, the ROI is the reciprocal of the SPB
expressed as a percentage. ROI expresses the percentage of the investment
cost that will be returned annually by savings. Per our previous example, ROI =
$200/$1,000 = 0.2 = 20%.
Internal Rate of Return (IRR) – This method calculates the discount rate
that makes the present value of the costs equal to the present value of the
revenues (or savings). A project is worthwhile according to this measure when
the IRR is greater than the rate of interest at which the money was borrowed to
finance the project, or is greater than the rate that could be obtained from
alternative investment opportunities, whichever of the two rates is higher.
Net Present Value (NPV) – This method also employs discounting. The NPV
is obtained by discounting both costs and revenues (or savings) at a specified
rate, and then subtracting the resulting present value of the costs stream from
the present value of the revenue (or savings) stream. A project is worthwhile
according to this measure if the NPV is positive.
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Life-Cycle Cost Analysis (LCCA) – An economic method of project evaluation
in which all costs over the life of a project are considered to be important. The
life-cycle cost (LCC) is the total cost of owning, operating, maintaining, and
eventually disposing of the project over a given period, with all costs adjusted or
discounted to reflect the time value of money. LCCA is appropriate for
considerations of new construction alternatives as well as renovation or retrofit
project alternatives. For a thorough discussion of LCCA, refer to the National
Institute of Standards and Technology (NIST) Handbook 135 (1995 edition),
Life-Cycle Costing Manual for the Federal Energy Management Program.
Savings-to-Investment Ratio (SIR) – This method calculates the benefit-
to-cost ratio of the present value of the savings over the study period (related to
the life of the project) to the present value of the investment-related costs. SIR
is useful as a reliable means of ranking independent projects for purposes of
allocating limited investment capital. When faced with a large number of
energy/cost saving projects, each of which is cost-effective but where funding
limits the number of projects that can be implemented, ranking by highest-to-
lowest SIR will ensure the greatest return for investment of the available capital.
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Appendix D - The New Jersey Clean Energy Program
(NJCEP)
• Building O&M
• Compressed Air
The program is designed to address key market barriers to efficient
construction on the part of developers, designers, engineers and contractors
in the commercial sector. It is available to school, commercial, industrial,
governmental, institutional and agricultural customers. The program focuses
on both new construction and retrofits of existing buildings.
The program offers a wide variety of incentives. Rebates for measures such
as high-efficiency lighting, heating and cooling equipment and motors are
offered to help offset the incremental cost. Design incentives and support are
available to cover a portion of the cost for additional energy-efficiency design
services, and technical support is provided to help customers evaluate
energy-efficiency options.
An important component of this program supports efficient design and
construction in schools. The state has an $8.6 billion school construction
program and the program’s NJ SmartStart Buildings Program is working to
ensure schools take into consideration the life-cycle costs of energy design
and equipment purchasing decisions, not just up-front costs. The goal is to
have designers make decisions that produce the lowest total costs over the
life the schools, with energy savings that more than offset any incremental
up-front costs.
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2. Customer-Sited Clean Generation Program relates to renewable energy
and offers a number of incentives for customers to invest in renewable-
energy systems for their homes and businesses. It also provides technical
assistance to help customers evaluate the benefits of renewable-energy
systems, along with complimentary training to municipal electrical inspectors,
electrical contractors and utility engineers. By offering significant rebates
covering up to 60 percent of the initial costs of renewable-energy systems,
the program encourages the use of photovoltaic (solar electric) systems, wind
generators, and sustainably grown and harvested biomass-fueled systems.
These technologies do not decrease the need for power, but instead reduce
the need for the traditional energy grid to produce that power. These
technologies also have the added benefit of producing clean power on site.
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A related, federally supported program, Rebuild America, is a network of
hundreds of community-based partnerships across the nation that are saving
energy, improving building performance, easing air pollution through reduced
energy demand, and enhancing quality of life through energy efficiency and
renewable-energy technologies. Created by the U.S. Department of Energy
(DOE) in 1994, Rebuild America serves as a mechanism for revitalization and job
creation in many communities. Using an integrated systems approach to
schools, housing, public and commercial buildings, factories, vehicles and
electricity transmission systems, the program helps to:
• Increase the number of high-performance buildings
• Implement energy efficiency and renewable-energy improvements
• Provide technical-assistance tools, resources and services
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References
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End Notes
3. The time required for each step can be estimated. This is essential in order to
make a thorough and helpful audit report possible.
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5. ENERGY STAR, a voluntary labeling program sponsored by DOE and the U.S.
Environmental Protection Agency, is reflective of industry/sectoral standards.
The ENERGY STAR label promotes energy-efficient choices. In the appliances
sector, the ENERGY STAR label aids consumers in identifying products and
equipment that save energy and money. For buildings, energy consumption is
benchmarked on a zero to 100 scale. Buildings qualify for the award by
earning a score of 75 or greater while maintaining an acceptable indoor
environment. In this context, a subtle distinction between benchmarks and
standards should be noted. There is as much value in taking a building from
a rating of 52 to a rating of 72 even though the building does not receive an
ENERGY STAR label as it does in improving a building rating from 72 to 76
and receiving a label.
9. In certain cases, two other items will have to be considered as part of the
total cost: power factor (PF) and fuel adjustment. PF is a measure of the
phantom currents that are needed to set up the magnetic field required for
the operation of a motor. These currents are sometimes labeled phantom
because they do not show up in the kWh recorded in the standard electric
meter. They do, however, reflect energy lost in heating transmission lines and
transformers. For this reason, if a large portion of the load is in electric
motors, the utility may be adding an additional charge to your bill for low PF.
The fuel adjustment charges on kWh consumption are also added to kWh
charges for each piece of equipment.
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10. Initially, it is advisable to not try to reduce demand to an unattainable level,
but rather aim at a more practicable goal, e.g., to reduce the top 25
percent or 30 percent of the peak periods.
11. SPB is the easiest method to use and does not require any consideration of
future value factors such as discount rates, inflation, and other annual costs
during the life of the measure. More sophisticated types of payback
analyses entail consideration of changes in operating costs, return rates on
money invested, fuel cost escalations, and life cycle costing. The other most
common economic evaluation methods used in energy audit reports include
net present value (NPV), internal rate of return (IRR), and life cycle cost
(LCC). Appendix C provides brief descriptions of these and other economic
analysis methods.
13. For an example of a spreadsheet tool, which can be used to calculate EUI,
visit www.energy.state.or.us/sb1149/Schools/EUI/Calculation.xls.
14. Or other appropriate method such as NPV, IRR, or LCC. See Appendix C on
economic analysis methods for energy projects.
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