What is a Business Energy Audit? A Guide

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Unlock energy savings and efficiency with a business energy audit. Explore how to undertake an energy audit, best practices and more in our informative guide.

What is a Business Energy Audit? A Guide

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As a business owner, you already know that managing expenses is crucial for long-term success, and one significant expenditure that often goes overlooked is energy costs. Many businesses fall into the trap of overpaying for energy simply because they don’t take the time to assess and compare their options regularly or do thorough checks to ensure that they’re running as efficiently as possible. This is where business energy audits come in, and if that sounds a little daunting then don’t worry; we’re here to talk you through them!

What is a Business Energy Audit?

In short, a Business Energy Audit is a root and branch review of your business operation to assess how and where your business uses gas and electricity. The main aim of this audit process is to identify energy-saving opportunities to lower your energy bills and make your business more sustainable. There are several ways in which this can be carried out:

On-site External Audit

An on-site audit involves a professional auditor visiting your business and making notes on how you can save money. The auditor will review your business and how it runs its day-to-day operations to establish exactly how your business uses its energy, and then advise of any changes you can make to reduce your usage.

External Energy Audit by Phone

Time and cost constraints may make an External Energy Audit by Phone a more appealing option. In these cases, the auditor will call you and ask questions about your business energy consumption. This information is collected to create a plan for you to follow. It will list ways you can individually save energy in the long and short term.

Internal Energy Audit

Smaller businesses can be highly financially stressed and involving an external auditor can prove expensive any way around, so those who want to save money on their energy bills but can’t afford a professional auditor can still carry out an audit themselves. This audit may not be as detailed as one from an external body but checklists are available online to help you on your way.

Preliminary Energy Audit

A preliminary energy audit uses readily available data for a simple analysis of your business energy use. This type of audit does not require a lot of measurement and data collection and should take a relatively short time. The results are more general but should offer some insight into more obvious energy efficiencies you can make. Any economic analysis at this stage is typically limited to a simple calculation of the payback period.

Detailed Energy Audit

For detailed energy audits, more detailed data and information are required. Measurements and a data inventory are usually conducted and different energy systems are assessed in detail. The time required for this type of audit is longer than that of preliminary audits, but the results are more comprehensive and consequently useful since they give a more accurate picture of the energy performance of your business and more specific recommendations for improvements. Any economic analysis conducted for the efficiency measures recommended typically goes beyond the simple payback period.

What are the Benefits of Business Energy Audits?

So, business energy audits can be expensive, time-consuming and complex, but there are substantial benefits to carrying one out. The one at the forefront of most business owners’ minds will be cost savings. One of the absolute primary aims of a business energy audit is to get your energy bills down, and having a granular knowledge of the way your company uses its energy can also reduce your exposure to future energy price increases, too. Such initiatives can also reduce your company’s impact on the environment, and promoting sustainability is just good business, nowadays.

Lowering Bills

Every unnecessarily left on lightbulb and every draft left open is money that your company is simply throwing away. A business energy audit should uncover every gap that can be plugged in, as well as a more detailed investigation of whether you’re paying more than you should be for your energy.

Reducing Exposure to Energy Price Increases

A more watchful eye on your energy usage can help to prepare you for the future. Do you use more energy at one time of the year than another? Might a better tariff suit your business? A Business Energy Audit is the most comprehensive way to find out.

Lowering Your Impact on the Environment

Saving energy doesn’t have to entirely be about improving your bottom line. We are moving towards a more sustainable future, and being ahead on that curve will benefit your business in the long term.

Promoting Sustainability

If you are passionate about making your business more sustainable, there’s nothing wrong with celebrating it! Increasingly, both customers and suppliers appreciate companies who go that extra mile with their sustainability projects.

Best Practices for Business Energy Audits

The scope and the level of detail used in an energy audit should be proportionate and will depend on the impact of the energy uses and the purpose for which the output information will be used. Opportunities identified in an energy audit can vary; they may be technical, or they may also relate to how energy is managed by the organisation and/or how people’s behaviour can influence energy use. All of these types of opportunities should be considered for inclusion in an energy audit report.

Remember, the more detail you go into and the more changes you can make, the more likely it is that you will be able to make substantial savings on your future energy bills. As such, you may consider it worthwhile to bring in a specialist energy auditor to help you identify every little improvement that can be made. Professional auditors have both the knowledge and experience to be able to spot gaps in your energy audit that you may not see yourself.

The Impact of Energy Efficiency on Businesses

The impact on your business of shifting towards more efficient energy use could be substantial. It’s not just a matter of saving money on your energy bills. An energy audit should uncover all wasteful practices within your business to reduce or eliminate those too, and you may be surprised at how quick and easy many of them are. To a great extent, business energy audits are about instilling a culture of responsibility among all staff, about making a statement that yes, you are serious about your commitment to your bottom line and your environment.

How to Get Started with a Business Energy Audit

A successful business energy audit should consist of four stages:

  1. Assess your current energy use and collate your data

  2. Conduct a site walk-round

  3. Analyse your data and develop an action plan

  4. Present your business case

Getting a clear picture of where and how you use energy will help you to focus your audit on the key areas of your organisation, for example, identifying areas that use the most energy. Having a clear framework for your site walk round will ensure that you cover everything you need. To help you achieve this, there is a plethora of downloadable energy audit checklists available.

Having completed your site walk round, you are ready to develop your action plan. To do this, you need to quantify the potential savings from each of your identified opportunities. You can do your own calculations using estimated energy savings and calorific values (the amount of energy per unit for any given fuel, costs and carbon factors), or by engaging with equipment suppliers and installers.

Once you have developed your action plan, it is likely that there will be no-cost and low-cost projects that you can begin to implement. Some projects will likely require finance before work can commence and savings can be achieved. A simple write-up of your recommendations in an energy audit report is often sufficient to secure internal funds. But be prepared for the possibility that you could meet resistance on the way. Make sure that your proposals make solid business and ethical sense, and it will be easier for you to persuade those who are more reluctant to get involved.

How to Prepare for an Energy Audit

Before you start, it’s best to get your preparation done in full, and this is where your preliminary energy audit comes in useful. Before you even begin your walk around, make sure that you have noted down any existing issues that you already know you’ll have to deal with, that you have your bills to hand no exactly what your current contractual terms are and how much you’re paying, and that you know your building well enough to be able to carry out a full audit. A copy of the building plans may be useful to you for this.

You’re unlikely to be able to carry this out alone, so make sure you have other people around you who can get on board with your vision. Remember that you’ll have to communicate this to all staff. A not-insubstantial proportion of the energy needlessly wasted by businesses comes about through carelessness. In other words, it’s cultural and it’s attitudinal, and the good news about that is that changing attitudes don’t have to cost very much at all.

How to Carry Out Your Own Energy Audit

Create and Complete an Energy Audit Checklist for Your Business

Once you have a good overview of your business energy use, you should proceed to create and complete your energy audit checklist. There are a number available online; this energy audit checklist is fairly thorough.

Assess Your Current Energy Use

Start by collecting data on your energy usage over a specific period. This includes going through utility bills, energy consumption records, and any historical data available. These numbers will serve as your benchmark for measuring future energy-saving initiatives.

While you’re collecting this data, keep an eye out for any anomalies or patterns. Are there certain months when your energy usage is high? Was there a period where usage spiked for no obvious reason? Take note of these things; they may be worth bearing in mind when conducting your investigation.

What to Check in a Business Energy Audit

There are good reasons why a checklist is essential to carrying out a business audit, but here is a (non-exhaustive) list of common items which may warrant scrutiny as you complete your walkaround:

Heating & Cooling Equipment

Your heating and ventilation equipment–sometimes referred to as ‘HVAC’–will be among the most power-hungry of all the equipment you have, no matter what the premises.

Ask the following questions about your heating and cooling equipment:

  • How old is your boiler and would it be beneficial to upgrade it?

  • Is your heating system maintained annually?

  • Are you covering any radiators with any office furniture?

  • Do you have adjustable radiator valves?

  • Do your employees use electric heaters?

  • Is your heating on a timer to match the building occupancy?

  • Are any unoccupied areas being heated all day?

  • Are windows and doors left open when the air conditioner is on?

  • Is the air conditioner properly maintained?

Lighting

Lighting uses considerably less energy than heating and cooling equipment, but it’s also often used wastefully, with plenty of easy fixes to lower your electricity bills and increase your business sustainability.

Questions to ask when evaluating your lighting and related equipment:

  • Are any lights being left on in unoccupied areas?

  • Have you installed LED light bulbs?

  • Could you install motion sensor lighting in intermittently used areas?

  • Are manual switches clearly accessible?

  • Are the building’s windows cleaned regularly?

Electrical Equipment, IT and Tech

The same goes for electrical equipment, IT and other technology and appliances around the workplace. Photocopiers are one of the worst offenders in the power usage stakes and, while a lot of these items are made with power conservation in mind, it’s easy to just leave them running if you’re not paying the bill.

Consider the following when evaluating Electrical Equipment, IT and Tech:

  • Is all equipment energy efficient, and is it set to optimise its power efficiency?

  • Do employees switch off computers at the end of the day and, where appropriate, unplug them from the wall?

  • Is refrigeration equipment cleaned and maintained regularly?

  • Are kitchen appliances rated highly on the energy efficiency scale?

  • Have any lifts been inspected for energy efficiency?

  • Do staff have guidance displayed to remind them of energy-saving practices?

  • Have sessions been planned on this with staff, and is energy efficiency included in new employee inductions?

It’s a wide-ranging area and serves as a reminder of how important it is to get a broad range of people onboard with your initiative. Your IT staff, for example, will have invaluable information relating to how the settings within your company’s computers could be altered to lower their energy use.

The Building

This is a complex area, depending on what sort of premises your business occupies, but it should go without saying not to attempt anything unsafe while carrying out your walk around. (Such considerations are a good example of why companies may choose to use the services of a specialist energy auditor.)

Questions to ask when auditing the building(s) include:

  • Is the roof well insulated?

  • Are there any damp marks on walls or ceilings?

  • Are there any leaks in doors or windows?

  • Do automatic doors close quickly and efficiently? Are they regularly serviced?

  • Are any loading doors left open?

  • Does the building have double-glazed windows, and what condition are they in?

Create an Action Plan

Once you’ve drafted your outline, craft a comprehensive action plan detailing your recommended energy-saving measures. Include estimated costs, potential savings, and responsible parties for each initiative. Prioritise tasks in order of ease to complete, taking budget into account, and assign time-frames to each part. The quicker you can get some wins on the board, the easier it will be to build momentum among your staff.

Decide how you will measure the effectiveness of each step, so you can monitor any energy-reducing strategies that you decide to implement. If required, present your plan to any stakeholders and get approval on work that needs to be carried out. Be clear about the benefits, not only financial but also regulatory and reputational.

Common Myths and Misconceptions About Energy Audits

Looks like a lot of work, doesn’t it? It might even feel daunting, to feel as though you’ve got to carry out these extensive checklists and present a case to other stakeholders, some of whom may be more sceptical of all this. There are several myths and misconceptions surrounding energy audits, which are easily debunked.

They’re Expensive

They’re not. The average cost of an energy audit is estimated at around 1% of your annual energy bill, so it doesn’t take much of a saving for it to start paying for itself. There are also several grades of energy audit according to what you need and regardless, if money is a big issue you can always carry out your own.

They’ll Cause Significant Disruption

The amount of disruption that an energy audit may cause is highly industry-specific, but for most companies, the disruption of an energy audit should be minimal. A standard walk-through audit should take 1-3 hours to complete. Of course, this depends on the size of the building, your equipment, and your overall energy consumption, but disruption is kept to a minimum when specialist energy auditors are involved; they will usually work to a schedule convenient to you, even if it means completing the survey out of hours, though it should be added that carrying out as much as possible during normal working hours is recommended, while there may also be cost implications to out of hours inspections.

You Won’t Save Anything Anyway

It is highly likely that you will. The International Energy Agency has estimated that “an average small business could reduce its energy bill by up to 30% by implementing good housekeeping and maintenance measures.”

Future Trends in Business Energy Auditing

Although a well-established industry, business energy auditing is also constantly evolving. It is unlikely that anything will come to completely replace a walk-around audit, but AI and other software are already increasingly becoming involved in augmenting and refining the work being carried out by specialists.

AI

There is already AI software which claims to be able to learn users’ usage and preferences of energy usage based on their past behaviour. With the help of advanced data analytics techniques, businesses can now extract valuable insights from the vast amounts of data generated by their operations.

Benchmarking

Energy benchmarking is becoming increasingly sophisticated. Initially, it primarily relied on manual data collection and basic spreadsheet analysis, but at the top level now it involves real-time data and predictive modelling, while cloud-based platforms have become increasingly popular for their ease of access and scalability.

Sustainability

Integrating renewable energy sources has become such a part of modern energy auditing that it feels impossible to talk about the former without also talking about the latter. Solar, wind, and hydropower are increasingly viable options for businesses looking to reduce their reliance on traditional fossil fuels, and energy auditing is a quick route to establishing your business’s suitability for such innovations.

Business energy auditing has been around for a long time, because companies have long sought ways to cut their costs and energy usage has long been known to be wasteful. But as it evolves, and as the scale of the job ahead of us if we are to maintain a livable planet becomes increasingly apparent, they are increasingly necessary. With cost savings and a more sustainable future among the benefits, giving your business a full energy audit will benefit not only your bottom line but also all of our future.

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