How to conduct an energy audit of your business

19 June 2018

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How to conduct an energy audit of your business

Using energy is unavoidable, but did you know there are many things you could do to make some real savings on your bills, whether you’re a large organisation or an SME?

A simple, straightforward energy audit can make a huge difference on your business’ bills, and help to reduce the inefficient energy habits you might have picked up over the years.

As part of this extensive guide, we'll explore why carrying out an audit is important, how the process differs from due diligence, how to go about the auditing process and offer up some advice on action plans. We've even created a helpful checklist you can use during your audits too.

Use the links below to navigate this auditing resource or read on for the complete guide.

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business owner preparing energy audit

Why carry out an audit of your business?

It’s a bit of a misconception that energy audits are time-consuming and pointless, but really, this couldn’t be any further from the truth. An audit provides a clear overview of your company’s current energy usage, giving you insights into the areas that might be a financial drain on your business in a way that’s easily understandable.

Pinpointing the areas where energy is being wasted can save you money in the long term, while the results of your findings can give you a road map with which to reduce your energy consumption, cut costs and reduce your carbon footprint. The more thorough the better: an effective audit is as extensive as it gets, taking everything into account – the building’s interior, exterior, fixtures, and equipment - to determine how these systems interact with one another.

A successful audit can be great for both company morale and the wider culture of the business too, helping to foster innovation and competition among your workforce. If the business demonstrates a willingness to put fresh ideas in place, engaged employees may be keen to identify new energy saving schemes within the operation – supporting innovation and collaboration in the process.

In terms of competition, meanwhile, developing a greener, more sustainable business model through auditing shows an understanding of energy efficiency that could well put you ahead of your competition. An audit is your chance to illustrate your business’ willingness to adapt, giving you a way to stand out in increasingly competitive markets. As a result, you could make inroads to a more environmentally conscious audience, which is perhaps the most important benefit to be had.

business energy auditing process

How does auditing differ from due diligence?

Generally, an audit focuses on a company's finances, but it can also delve into the business and operational side of proceedings.

As a result, the investigation tends to be extensive and comprehensive, examining the company's legal, accounting, tax, operational and property matters as well.

What is due diligence?

Energy auditing involves looking at your own company to highlight any inefficient energy habits. Due diligence, on the other hand, refers to identifying suppliers and determining whether they're the right fit for you by making the relevant enquiries.

Doing so ensures that they're not only affordable, but that they operate in a legitimate, honest, and lawful way too. Due diligence concerns itself with investigating suppliers before working with them, whereas auditing relates to investigating your current performance. Due diligence should therefore always be performed first.

Why is due diligence important?

Essentially, carrying out due diligence keeps instances of fraud to a minimum, helps you make more informed decisions, and fosters greater understanding of who you're doing business with. Due diligence is also great for checking if you’re compatible with businesses on an ethical level, and also minimises the risk of violating UK laws.

Think of it as like buying a used car. Although the seller has provided you with a certificate from a reputable mechanic proving how roadworthy it is, you're still unconvinced. You'd rather carry out a few other tests to be sure. Due diligence is the business equivalent of personally inspecting the car, kicking its tyres, and taking it for a quick spin so you feel more comfortable before committing to them.

If you're unsure about potentially working with a supplier, then conducting a process of due diligence can help settle those doubts. Alternatively, carrying out due diligence may also help you uncover certain practices or behaviours that prove they're the wrong supplier to be doing business with – and spare your blushes in the process!

The different types of energy audit

There are generally two types of energy audit, both with varying levels of depth to them. These are classified as follows:

Preliminary Energy Audit

Also known as a walk-through audit, these audits – as the name suggests – consist of a walk around your business’ premises to identify energy use and performance. They don’t involve much in the way of measurement and data collection, and don’t take very long to carry out either. What they can unearth, however, are opportunities for you to be more energy efficient, as well as qualitative analyses of where you can save energy and estimates of how much any new measures could potentially save.

Detailed Energy Audit

Also known as an investment grade energy audit, such audits result in far more detailed data and information, with different energy systems – pump, fan, compressed air and steam, for instance – being assessed in detail. For this reason, they require far more time than preliminary energy audits, taking place over longer periods of time to provide more in-depth energy consumption reports.

The results of such audits are typically more comprehensive, providing a more accurate picture of your business’ energy performance, as well as more specific recommendations on how to improve energy efficiency.

How to prepare for an energy audit

business site walkaround

Whichever kind of audit you go for, there are a few things you can do ahead of the process to make things a little easier. Here’s what you should be doing from the outset of your business’ energy audit…

Note down existing issues

If you’ve had complaints from your employees about the office being too cold even when the heating’s on (and vice versa), then be sure to note this down along with any other grievances they’ve aired. Likewise, if you’ve noticed your bills have increased even more than usual, be sure to write it down.

Essentially, there is no problem too small to make a note of ahead of an energy audit. The more you’re aware of before the audit goes ahead, the better.

Have your bills to hand

If you’re using an energy consultant to carry out the audit for you, then they’ll want to see copies of your recent energy bills, dating back to at least one year, for both your power, heating and air conditioning.

You might have to get in touch with your local utility provider if they’re not readily available. Either way, what matters most is you have information on the amount you consume. Even more so than the price you pay, the energy consultant will be able to look at your consumption and begin to formulate a plan on how to reduce this.

Get to know your building

Whether you’re going with an energy consultant or not, the more information you have at the outset is, the more you’ll be able to improve your business’ energy saving approaches.

Ahead of your audit, make sure you’re familiarising yourself with your business’ premises – that means getting up to speed on things like the number of occupants, where its heating and cooling zones are, its usual thermostat settings, any appliances or devices that chew through energy and where its heat sources are.

The auditing process: Initial steps

Whilst energy audits aren’t mandatory for all businesses, it is always worth conducting your own audit to discover where positive changes can be made.

If you aren't sure where to start, then there are plenty of energy auditors out there who can consult, highlight problem areas, and give you invaluable advice too. 

Alternatively, you can carry out a DIY audit. Even the most basic, cursory investigation can give you some effective, beneficial insights into energy wastage, so it’s well worth doing if you’re looking for quick, simple ways to save money.

If you’re confident with taking the independent route, consider these basic steps when formulating a strategy for your own full energy audit.

Assessing your current energy use

An important starting point, looking at how your energy is currently being used can highlight the areas that may need correcting. Identifying the inefficient areas across different departments, buildings, and sites (if that's necessary, of course) is particularly useful, showing you what needs improving and what requires further investigation.

This step helps later down the line, too. Once you've got some energy-saving tools and methods in place, it makes illustrating the savings you've achieved to managers and staff much easier.

How you assess your current energy is up to you, of course. Energy usage tracking spreadsheets are available online which can be very helpful, while your energy provider may also be able to offer assistance too.

There's also plenty of energy auditing software available to make things a little easier. Alternatively, you may have devised your own tracking system. Whichever you go for, the information gained at the outset helps with the next step of the process.

A structured, systematic walkaround on your premises serves to identify energy-saving opportunities. As we mentioned up top, a successful audit should be as thorough as possible, so a clear framework for the physical investigation is key.

why audit energy usage

To help out, we’ve created an Energy Audit Checklist for you to download and use as part of your walkaround.

The checklist structures things in a way that allows you to prioritise the best places to save energy and money. When using the checklist, you'll walk through the areas of your business, thoroughly investigating processes and equipment, and noting any areas you could potentially improve on. 

Unsure of where to start your business energy audit?

Covering as much of the business as possible is what matters most here. Quick fixes can be implemented speedily, helping to make small savings, build up momentum and convince colleagues that the process and results are worthwhile. Additionally, opportunities that might not have been a priority initially can be re-assessed later down the line once the main projects have been completed.

Once problems have been identified after your walkaround and opportunities have been noted, you're now ready to make an action plan.

Taking action

To work out the next step, you need to quantify the potential savings from each of your identified areas. This is done by calculating your estimated energy savings, the calorific values (the amount of energy per unit for any given fuel), costs, and carbon factors. You can also engage with equipment suppliers and installers, who can give you quotes for the work.

The comparison between potential savings and estimated costs produces payback times for each potential project, allowing you to prioritise actions for implementation.

 business case for energy audit

Making a business case

With current usage assessed, walkarounds carried out and an action plan devised, you could likely start implementing some of your lower-cost projects. However, larger projects might require some external financing. In this case, you’ll need a more formal business case to justify your requirements.

So, while every project is likely going to be different, there are key elements that should be considered and made clear in your business case, including:

  • The rationale for your project
  • Identifying the solution
  • A plan of the project’s requirements, including timescale
  • A breakdown of financial costs
  • Cost-benefit analysis to compare the elements of each solution
  • Sensitivity analysis – how do the different outcomes compare to the original prediction?
  • Risk analysis – detail the associated risks, and identify mitigating factors

 energy audit best practices

Additional tips and best practice

While creating a business case might sound like a time-consuming process, remember that you can make some quick changes to your energy usage simply by putting an end to bad habits.

If you have a thermostat, it might be worth moving it to a location that’s more efficient, away from draughts, windows, and skylights, for example.

Is the fridge in the kitchen over 10 years old? If so, it’s likely to be less energy efficient than new models. Likewise, consider replacing your current light bulbs with energy-efficient options like CFL or LED bulbs – and be sure to turn them off when they’re not in use, especially overnight. 

For more great tips and quick fixes, check out our guide on how to make your business more energy efficient here.

We hope that you have found this guide useful. To find out about SEFE Energy's range of business energy services, visit the homepage or call us today on 0161 837 3390.

 The views, opinions and positions expressed within this article are those of our third-party content providers alone and do not represent those of SEFE Energy. The accuracy, completeness and validity of any statements made within this article are not guaranteed. SEFE Energy accepts no liability for any errors, omissions or representations.

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