When investors commit their capital, they try to maximize the return on investment under calculated risk conditions. Investment options are varied and a portfolio is selected based on each investor's objectives and accepted level of risk. A similar principle applies when finding the best combination of energy efficiency measures for a building, where the role of energy consultants can be compared to that of financial consultants.
Just as each investment portfolio is unique, the ideal combination of energy efficiency measures changes for each building. Selecting random measures for a building is like investing in random business sectors without analyzing them – both approaches are essentially gambles, often producing poor returns or even losses.
Identify the best energy efficiency measures for your building.
Energy consultants inspect buildings before suggesting upgrades
Suggesting appropriate energy efficiency measures is impossible without knowing the conditions of a building. For example, LED lighting retrofits are typically cost-effective, but the savings are diminished if a building has already been retrofitted a few years ago. There may be a marginal gain in efficiency thanks to the constant evolution of LED technology, but not enough to justify the cost of a second upgrade.
Energy consultants start by inspecting your building. This way, they can compare the performance of existing installations with that of potential upgrades. While some energy efficiency measures may achieve a payback period of less than a year, other measures may require more than a decade.
Equipment suppliers often report typical savings when they advertise their products. However, you should not assume that this will be the case for your property. Savings reported are based on assumed building conditions or case studies – they are informative but may not apply to your property.
To ensure a reduction in your electricity and gas bills, energy consultants will start with a detailed assessment of the property. This is similar to how a financial advisor will ask about your investment goals, risk tolerance, risk capacity and expectations before helping you choose a portfolio.
Energy consultants provide an unbiased point of view
Some technology providers provide guidance on energy efficiency, but remember they are focused on selling their products. A reputable supplier won't rip you off, but the recommendations they provide will tend to be about saving energy with their technology. On the other hand, when you work with energy consultants, you get an informed opinion from a neutral third party.
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Energy consultants will clearly explain what works and what doesn't for your property.
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They also provide a list of energy efficiency measures with estimated costs and benefits.
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Therefore, you can select an ideal combination based on your budget and acceptable payback period.
This is similar to how a hedge fund, mutual fund or bank will present you with their investment options if you approach them directly. However, a financial advisor can help you create a portfolio with a much broader selection of investments.
Energy consultants weigh the pros and cons of building upgrades
As with many other engineering decisions, energy efficiency measures have advantages and limitations. Consider the following examples:
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A geothermal heat pump (GSHP) can achieve very high efficiency in both cooling and heating mode, while eliminating the on-site use of fossil fuels. However, the project can be very disruptive to an existing building due to the excavations required.
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Triple-pane windows with low-e glass can dramatically reduce heat gain in the summer and heat loss in the winter. They are a great option for new builds, but updating is expensive and difficult in existing buildings – old windows typically must be removed completely as they are not the right dimensions for triple glazing.
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When upgrading to LED lighting, a bulb-only upgrade is quick and affordable, while a full fixture upgrade brings additional efficiency at extra cost.
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Variable refrigerant flow systems provide high-efficiency heating and cooling, but additional measures may be necessary for colder winter days. The outdoor unit enters a defrost cycle at regular intervals, stopping the heating output.
These are just a few examples of the pros and cons that should be considered when selecting energy efficiency measures. This is similar to how each type of investment brings unique opportunities and risks – some investments are low risk and low profit, while others offer potentially higher profits with increased risk.
Conclusion
Energy efficiency is a type of investment: you are investing capital in building upgrades for greater long-term rewards. An optimal selection of energy efficiency measures maximizes the return on every dollar spent, while poor selection can lead to low savings or even net losses.
Just as a financial advisor can curate an ideal investment portfolio based on your goals and risk tolerance, an energy advisor can inspect your property to propose an ideal combination of energy efficiency measures.
