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Profit from an Energy Audit

19 July 2022

Companies routinely evaluate opportunities to reduce expenses. With the prices of gasoline, diesel fuel, natural gas and propane surging across the country, many organizations are currently focusing on lowering energy consumption. This process starts with an energy audit.

Not only are many of the savings from an energy audit sustainable, "going green" can also add value by demonstrating responsible business practices and engendering support from environmentally conscientious employees, customers and other stakeholders. Even better, your company may qualify for tax breaks for making energy-saving changes.

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

1. Calculate Baseline Energy Use

Building energy expenses — such as water, electricity, gas and solid waste — for the previous three years should be compiled into a spreadsheet and analyzed. Any large variances should be identified and theories for the increase documented. This information will prove helpful during the physical inspection phase.

2. Gather Building Specs

Collect basic information regarding the specifications of each facility you operate, including:

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. Document Facilities Use

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 doors likely allow cold air to leave the building and warm air to enter during the summer (and vice versa during the winter). As a result, the building's HVAC system may have to run consistently to cool (or heat) the building. Selecting the most efficient doorway system can make a difference.

4. Inventory Major Systems

Documenting the major systems that consume energy is crucial to understanding how costs can be reduced. For example, a large office building with banks of elevators consumes considerable amounts of power, especially if the building is at, or near, capacity. Similarly, buildings with overhead lighting that stays on 24/7 may rack up substantial bills.

After all of the building's major systems have been identified and documented, it may be possible to determine how much each system costs per year to run and maintain. 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.

5. Prepare a List of Office Equipment

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

6. Evaluate After-Hours Energy Consumption

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 most offices are unoccupied on weekends and after normal business hours during the week.

Your assessment should include whether the lights are turned off at night and weekends. For security reasons, you may decide to use motion-activated lighting, especially in seldom-used areas, such as restrooms or break rooms. Exterior security lighting can also be a waste as it's sometimes left on during the day. Document the number of exterior lights and consider using light-sensitive timers to minimize waste.

Think beyond lighting during this phase of the audit. For example, consider putting thermostats on a schedule that reduces air conditioning and heating costs at night and on the weekends. You also might require workers to turn off copiers and laptops at the end of the business day, rather than allowing them to idle.

In addition, kitchen and restroom exhaust fans consume extraneous energy if they're allowed to run while the building isn't in use. Include a list of rooms that have exhaust fans and whether they're turned off when not in use. Also, ensure that the size of exhaust fans is appropriate for the space that they're responsible for cleaning. A small or inefficient fan will consume electricity at a much higher rate than an appropriately sized unit.

7. Interview Staff Members

The people who spend time in the building will undoubtedly have thoughts on the building's environment. Ask employees whether 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 during the summer months appear higher than normal.

8. Check Insulation Levels

Have you ever checked the insulation in your exterior walls, ceilings, floors and crawl spaces? Is the building's envelope sealed? Proper insulation can significantly reduce heating and air conditioning costs.

Additionally, 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.

9. Evaluate Water Usage

Utilities usage extends beyond energy consumption. Your water bill can also skyrocket, especially during the summer months if you operate an exterior sprinkler system or an equipment cooling system.

A dripping faucet, a leaky sprinkler head 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 that they're running efficiently and are regularly maintained.

Ready, Set, Audit

Many utility companies perform on-site consultations of businesses and inform them how they can reduce energy use and save money. Or you can work with your CPA to design a plan to cut energy costs and implement improvements that can reduce costs and potentially qualify for tax breaks.

Which States Pay the Most
(And Least) for Gas?

When conducting an energy audit for your business, don't forget vehicle fuel use. Gas and diesel prices are up significantly this year. The average nationwide price for a gallon of regular gas was $4.86 on June 30, compared with $3.12 a year ago. Consider replacing gas guzzling vehicles used for deliveries and by sales people with hybrids or high-mileage vehicles.

Here's a list of the ten states with the highest (and lowest) gas prices as of June 30, 2022.

Highest Price Per Gallon (Regular Gas)	Lowest Price Per Gallon (Regular Gas)
1. California $6.29	1. Georgia $4.36
2. Hawaii $5.60	2. South Carolina $4.38
3. Alaska $5.57	3. Mississippi $4.38
4. Nevada $5.57	4. Arkansas $4.41
5. Oregon $5.49	5. Louisiana $4.42
6. Washington $5.48	6. Alabama $4.46
7. Illinois $5.39	7. Tennessee $4.48
8. Idaho $5.25	8. Texas $4.49
9. Utah $5.24	9. North Carolina $4.50
10. Arizona $5.22	10. Oklahoma $4.56

Source: AAA Daily Fuel Gauge Report for 6/30/22

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