Some media are reporting a widespread backlash against ESG and carbon-reduction initiatives. That may be welcome news for facilities managers who view energy tracking as a financial and administrative burden. But the reality is that energy tracking and reporting can lead to significant cost savings for facilities.
A glance at data from commercial and industrial buildings using the U.S. Environmental Protection Agency’s (EPA) Energy Star Portfolio Manager tool is revealing. By measuring and tracking energy and water use, waste, and materials through the Portfolio Manager, these buildings saved $14 billion in energy costs within one year. And since 1992, they’ve saved nearly $200 billion. The EPA’s Energy Star program may be abolished soon, but many building owners and facilities managers are preparing for this possibility by looking at alternative methods of data compilation—and the program’s stats indicate why.
Eligibility for Incentives
Another reason energy tracking is important from a financial standpoint is that its data can supply proof of eligibility for federal, state, and local incentives, which are more numerous than one might expect: To explore the scope of possibilities, check out this searchable list from the U.S. Department of Energy.
In many instances, benchmarking data is required for qualification, and, in cases of building performance upgrades, building owners and managers must provide before-and-after comparisons.
“Green loans” may also require benchmarking data. According to the World Bank, one of the hallmarks of green loans is reporting: “The principles recommend the use of qualitative performance indicators and, where feasible, quantitative performance measures (for example, energy capacity, electricity generation, greenhouse gas emissions reduced/avoided, etc.).”
Early Warnings of Anomalies
Energy tracking can also pinpoint the stitch in the proverb that “a stitch in time saves nine.” Specifically, through integrations with Internet of Things (IoT) systems, energy tracking software enables prompt identification of anomalies. Examples include a potential leak that could lead to water damage or an HVAC system that is not functioning properly. The former could incur costs of millions of dollars for repairs and, potentially, the need for expensive services like mold remediation. A faulty HVAC system could be replaced before the problem escalates, avoiding the necessity and expense of a last-minute, fast-tracked order, but also the downtime for tenants who can’t use their space and who probably are less than happy about the situation.
Alignment of Consumption with Occupancy
Further savings through energy tracking stem from alignment of energy consumption with occupancy/foot traffic. One common application is motion-controlled lighting in restrooms, but the same principle can be adopted for systems throughout an entire building, and not just for lighting. For example, HVAC systems can be programmed to automatically adjust to occupancy levels. When offices are empty, as many are during weekends or evenings, there is no need for full-powered cooling or heating. Resulting cost savings on utility bills can be significant. But that’s not all: Today, when many employers have hybrid work policies, additional savings can accrue from adjusted cooling or heating according to usage during standard daytime working hours, even within different areas of a building, such as conference rooms or collaboration spaces.
Avoidance of Fines
Regardless of what happens at the federal level, many state and local governments will likely continue implementing their strict programs related to energy efficiency in buildings. Buildings that do not comply with standards set by such programs as Local Law 97 in New York City, BERDO in Boston, or CALGreen in California face monetary fines. In some cases, there may be delays in enforcement, but savvy building owners and managers can avoid risks through energy tracking, which can not only help identify areas for improvement, but also make it easy to compile data for proof of performance.
Conclusion
In summary, the financial ROI of energy tracking speaks for itself. Reports of a backlash against ESG and decarbonization are irrelevant in a cost/benefit analysis. Indeed, the results of MRI Software’s recent “Voice of the Facility Manager” report showed that respondents prioritized energy management solutions for reasons of efficiency and cost savings rather than for reduction of carbon footprints. This is a logical standpoint, given the potential savings from energy tracking and its impact on eligibility for incentives, its capabilities for identifying anomalies and resolving discrepancies between occupancy and energy use, and its value as a measurement tool for demonstrating compliance with local building performance standards. The potential cost savings, in short, far outweigh any costs of installation and implementation.
Carla Hinson is vice president of solutions and innovation at MRI Software, a real estate technology company based in Solon, Ohio.