The commercial building sector is the largest electric energy consumption segment in the U.S.  It currently represents almost 20 percent of all energy use and is growing faster than any other market segment.  Given the sheer magnitude of energy use in commercial buildings, any measures designed to save energy in the segment represent a significant opportunity for impact.

Not surprisingly, the market has seen a recent surge in the number of companies focused on driving energy efficiency in commercial buildings, primarily through retrofit projects. Pike Research estimates that ESCOs will exceed $5.1 billion this year in energy efficiency project installations. This number is expected to grow to $16 billion in sales by 2020.  

Despite the tremendous attention to commercial building retrofits, nearly half of the energy savings opportunity in commercial buildings remains untouched. Operational improvements -- low and no cost improvements like changing temperature setpoints, implementing night setback schedules and reducing simultaneous heating and cooling -- are the hidden and low hanging fruit of energy efficiency.  

In the broad portfolio of buildings we have examined, the energy savings opportunities presented by operational improvements are roughly equal to those offered by retrofit opportunities. This supports the finding from last year’s report from Pike Research, which suggests that operational improvements and retro-commissioning can offer savings of 10 percent to 20 percent in buildings, which have an overall energy savings potential of 10 percent to 50 percent.

As one example, imagine an office building in which most people have left the building by 7 p.m., but the building does not begin its HVAC shutdown until 9 p.m. That’s two hours, or 8 percent of the day, spent at a high level of energy consumption, with little to no benefit to the building or its occupants. Easy adjustments to the building's HVAC scheduling could save such a building 2 percent to 3 percent over an entire year, at no cost.  

Why are operational improvements so hard to find?  Let’s start with the basics.  In order to identify energy savings opportunities, utilities and building owners typically start with on-site audits. Typical assessments run between $5,000 and $50,000 and take several weeks or more to complete. They also require multiple days onsite and a significant time investment from the building staff.  

These audits often use observations over days or weeks to make their conclusions. But beyond providing a look at monthly consumption patterns, these audits lack the ability to analyze a full year of daily and hourly consumption. Because these audits are often conducted by companies looking for retrofit business, they tend to focus on the physical assets of the building that can be readily observed. In short, there can be high barriers to even getting an audit, and if one is done, it’s unlikely to find operational issues.

Fortunately, new data streams and innovations are becoming available to help utilities and building owners both find and deliver on these most capital-efficient energy savings opportunities. In contrast to retrofit savings, operational savings can be achieved remotely, leveraging utility interval meter data. Using highly sophisticated analytical techniques and an understanding of building science, a building’s utility data can reveal operational savings opportunities of up to 30 percent in commercial buildings. Some of these operational savings can be acted on by building owners without help and some may require retro-commissioning engineers to re-program, upgrade, or tune controls systems.  

Identifying these savings opportunities can be done using significantly less time and resources compared to what is required for retrofits. Some can be completed by staff onsite for no cost at all once they are identified, and almost all have payback periods under one year. In addition, they have the added bonus of reducing payback times for retrofits. Utilities already have the required data, so there is no need to hook into the building’s systems or go onsite. Even recording, tracking and crediting operational improvements can be done by utilities using interval data.

Although interval data meters have been around for years, the recent boom in smart meter investment is making interval data ubiquitous in commercial buildings. New analytical methods are emerging to turn that data into operational savings, with far less time, if any, required onsite. Onsite service engineers are even learning to integrate the results of this analysis, making them even more efficient and less costly.

The result is unprecedented access to operational savings for utilities, coming in the form of reduced time and expense and greater potential scale of operational efficiency programs.  

As one experienced retrofit engineer put it: “Every time I go into a building to try and sell a big project, I’m struck by the hundred-dollar bills lying on the ground that nobody can see. Operational improvements aren’t great money-makers for me, but those building owners sure could save themselves a few bucks if they could get a handle on them.”

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Ken Kolkebeck is co-founder and SVP of products and buildings at commercial building energy analytics company FirstFuel. With over 30 years experience in building controls, energy efficiency and commissioning, Ken is responsible for leading FirstFuel’s building science efforts. 
 

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