Do energy savings persist?

We all make investments in different forms – in bonds, stocks, investment trusts, or energy. How do we evaluate the return on our investments? How long do our investments continue to perform?Imagine you’ve made an investment in energy efficiency for your real estate asset. You expected your investment to deliver $100,000 in savings each year. This attractive savings number convinced you to invest initially. But in reality, you could be getting anywhere from $10,000 to $60,000 less than expected by the third year.A study by the American Council for an Energy-Efficient Economy (ACEEE) analyzed the persistence of 96 measures, meaning the changes implemented in a building to deliver energy savings. By the third year after installation, 20% of those measures were delivering savings less than 50% of expected.

Figure 1. Effective useful life (EUL) three-year failure rate projection of energy efficiency measures (EEMs) where failure is defined as delivering less than 50% of the expected savings.¹

Why do energy efficiency measures drift over time?

From our experience working in buildings, it’s not surprising anymore why measures may not perform as expected. Think about the physical and operational changes that occur in a typical office building over 10 years – replacement of mechanical systems, tenants moving in and out, and transitions between property managers and facility teams.Here’s a very plausible and not uncommon scenario. Some energy measures involving improved control strategies were taken for a building’s HVAC system several months ago. The facility chief has a long to-do list: switching a bulb in the hallway lights, re-keying the lock on a door to a tenant space, replacing an outdated fire alarm system, arranging for regular inspection of the elevators as required by code, and at the top of the list, fixing a leak in the plumbing. The property manager gets calls from multiple tenants complaining that the building is too warm, and passes this along to the facility chief.Being short on time, the facility chief throws the equipment into hand or manual mode. “I’ll figure this out later when I’ve gotten through my other tasks.” The building cools down and the property manager stops receiving calls. Everyone’s happy, but the equipment continues to run at 100%, 24/7.At the end of the month, the property manager may see the higher utility bill. “Some new tenants moved in this month, that could explain the difference.” Unknown to the property manager, the measures implemented have failed; the asset owner’s initial investment is now getting no return. While the facility chief and property manager kept the tenants satisfied, the asset owner will be the one incurring the financial impact. This is only one of many scenarios resulting in lower than expected energy performance.As outlined in a report developed for the National Renewable Energy Laboratory ², the realization of energy savings from measures is dependent on:

1. Equipment life – the number of years installed equipment will operate before it fails
2. Measure persistence – the lifetime of the measure taking into account building turnover and early retirement or failure of the installed equipment or implemented measure
3. Savings persistence – the percentage of change in expected savings due to operational changes or performance degradation of the equipment

How does Carbon Lighthouse manage the drifting?

There are essentially countless reasons that could affect the performance of your investment. It takes rigorous management in these three areas to maintain performance. We understand the difficulties of operating a building, which is why we deliver an actively managed energy service. Beyond utility bills, we bring in visibility from the building management system and 15-minute meter data, which typically go unseen. Monitoring scattered sources of data and quantifying energy performance is complex, which is why we developed CLUES™, our proprietary platform to visualize and model building systems.Carbon Lighthouse is committed to assuring the energy performance of our proposed energy solutions and to delivering impact through the reduction of carbon emissions. Aligned with our mission to stop climate change, we provide an actively managed energy service to ensure impact not only immediately after implementation of our energy solutions, but ongoing for the length of the contract.[1] John Roberts and Bing Tso, “Do Savings from Retrocommissioning Last? Results from an Effective Useful Life Study.” 2010 ACEEE Summer Study on Energy Efficiency in Buildings, American Council for an Energy-Efficient Economy, 2010, pp. 3-339 to 3-347.[2] Daniel M. Violette, “Chapter 13: Assessing Persistence and Other Evaluation Issues Cross-Cutting Protocols.” The Uniform Methods Project: Methods for Determining Energy Efficiency Savings for Specific Measures, National Renewable Energy Laboratory, April 2013, pp. 13-1 to 13-37.