How do you rank energy efficiency measures by cost savings?

1 What is an energy audit?

An energy audit is a systematic assessment of your current energy use and potential savings opportunities. It involves collecting data on your energy sources, equipment, appliances, lighting, heating, cooling, ventilation, insulation, and behavior. An energy auditor can help you identify the areas where you can improve your energy efficiency, estimate the costs and savings of each measure, and prioritize them according to your goals and budget.

2 How to calculate simple payback period?

One way to rank energy efficiency measures by cost savings is to use the simple payback period (SPP) method. The SPP is the time it takes for a measure to pay for itself through the energy savings it generates. It is calculated by dividing the initial cost of the measure by the annual energy savings. For example, if a measure costs $1,000 and saves $200 per year, the SPP is 5 years. The lower the SPP, the faster the measure pays for itself and the more attractive it is.

3 How to compare SPPs of different measures?

In order to accurately and relevantly compare the SPPs of different measures, you must take into account a few factors. These include the lifespan of the measure, which can affect the cumulative savings over time; the discount rate, which accounts for the fact that a dollar today is worth more than a dollar in the future; and the energy price, which can vary depending on the season, time of day, and market conditions. When considering these factors, you should compare measures with similar lifespans, use a consistent discount rate for all measures, and use a realistic and updated energy price. Adjusting for inflation and expected changes can also be beneficial.

4 How to account for non-energy benefits?

Another way to rank energy efficiency measures by cost savings is to account for the non-energy benefits that they can provide. These are the additional benefits that are not directly related to energy use, but can improve your comfort, health, safety, productivity, or property value. For example, installing a programmable thermostat can not only save energy, but also increase your thermal comfort and convenience. Replacing old windows can not only reduce heat loss, but also reduce noise and enhance aesthetics. These benefits can be quantified and added to the energy savings to get a more comprehensive picture of the value of a measure.

5 How to use a ranking matrix?

A ranking matrix is a tool that can help you compare and rank energy efficiency measures by cost savings and other criteria. It is a table that lists the measures on one axis and the criteria on the other. You can assign scores or weights to each measure and criterion based on your preferences and objectives. Then, you can multiply the scores and weights and sum them up to get a total score for each measure. The higher the score, the higher the rank. You can use a ranking matrix to incorporate qualitative and quantitative factors, such as SPP, non-energy benefits, environmental impact, ease of implementation, and customer satisfaction.

6 How to review and refine your ranking?

Once you have ranked your energy efficiency measures by cost savings, you should review and refine your ranking to ensure that it is accurate, realistic, and aligned with your goals and budget. You should check the data and assumptions that you used for your calculations and analysis, and update them if needed. You should also consider the interactions and synergies between different measures, and how they can affect the overall performance and savings. For example, adding insulation can reduce the heating and cooling load, and thus the size and cost of a new HVAC system. You should also consult with your energy auditor, contractor, or utility for feedback and recommendations, and explore the available incentives and financing options that can help you implement your measures.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?