Peer Comparison in Energy Management – The Key to Success
We’re always looking to see what our neighbors, friends, and peers are doing, buying, and talking about. We compare our clothes, appearances, and jobs. Something else we should be comparing? Energy use. Studies show that when we have information about the energy consumption of businesses and buildings around us, our own energy use will decline by up to 2%. Simply put, we end up competing with our peers to see who can use the least energy. This is beneficial for not only the environment, but for company bottom lines as well.
The process of comparing how one group, categorized by an individual or set of determinants, is performing against another group, is known as peer comparison or benchmarking. When used in terms of energy use, peer comparison can improve companies’ energy efficiency and sustainability and reduce energy costs. Let’s take a more in depth look at what peer comparison is and how you can use it to your company’s advantage.
Who Should Utilize Peer Comparison?
If you’ve ever wondered how your facility (or portfolio) ranks against your competitors, then peer comparison is for you. Additionally, peer comparison can be a useful tool for those tasked with identifying energy saving opportunities in a facility or determining the potential payback of energy efficiency projects.
What Does Peer Comparison Involve?
Peer comparison involves tracking multiple building characteristics, e.g. HVAC system details and air flow controls, in order to provide you with the ability to compare your building against narrow subsets of buildings to evaluate how you truly compare against competitors. (Real-time data monitoring allows you to track those building characteristics minute by minute.) By comparing against a strictly defined subset, you can easily review how altering one characteristic would affect your future energy use, cost, and emissions. For example, say your building has the following characteristics:
- Office building
- Located in New York, NY
- Built in 1985
- A square footage between 500,000 and 650,000 ft2
- Operating hours between 8am – 6pm
- Central cooling system: single stage steam chiller
Peer comparison allows you to compare against a set of buildings in the same subset and determine what the potential energy use, cost, and emissions savings would be if you switched from steam chillers to electric centrifugal chillers. You could then enter an estimated project cost to determine the estimated payback period and ROI, calculated using actual rate projections based on the utility invoice data for your facility.
The Impact of Peer Comparison
As an example of how impactful peer comparison can be for energy and cost savings, let’s take a look at a study involving peer comparison of residential energy use. The study found that households which received monthly comparison reports saved $31 a year in reduced electricity usage. In the study, energy use dropped almost as soon as the comparison reports went out, suggesting that people were making behavioral changes, e.g. turning off lights when they left a room. If we translate these results into a commercial or industrial setting, the savings would be impressive to say the least. And, the more energy you conserve, the greener your building/company will be.
Is Peer Comparison Required?
Peer comparison/benchmarking is required in the following states and cities, usually in compliance with ENERGY STAR standards:
- New York City
- San Francisco
- Washington D.C.
Even if you are not in a state or city that requires benchmarking, your property/portfolio can still benefit from voluntarily reporting to ENERGY STAR Portfolio Manager or GRESB. 40% of Fortune 500 companies have sustainability goals in at least one of the following areas: GHG reduction commitments, energy efficiency, and renewable energy. Buildings with an ENERGY STAR label are valued by tenants, with studies showing an increase of 3.6% in occupancy and 2.5% in average rents per square foot.
How EnergyWatch Can Help
EnergyWatch’s data-driven energy management platform watchwire ranks your building against similar subsets of buildings to show whether you’re a low- or high-performing building, identifies and prioritizes cost-saving energy efficiency improvements, and assesses the range of likely savings from these improvements. Our predictive and prescriptive analytics utilize big data algorithms to reduce the cost of identifying efficiency projects and reduce performance risk.
For true peer comparisons that deliver actionable results, the watchwire peer comparison tool compares your building with over 750,000 buildings in the Department of Energy Building Performance Database (vs. ENERGY STAR’s comparison against just 6,700 buildings from the 2012 CBECS dataset). Sources of this data include energy disclosure mandates from New York City, San Francisco, and Washington D.C. With our platform, you’ll be able to leverage your data for actual improvements.
Additionally, watchwire is able to connect with any API. By combing this with our thorough collection of utility data for your portfolio, EnergyWatch can future-proof your portfolio against additional mandatory reporting requirements and also help you voluntarily report to any benchmarking service in the market, including GRESB and CDP. This allows you to utilize your data to increase your company’s transparency and visibility with shareholders and stakeholders alike.
To learn more about watchwire, click here to download the Watchwire Solution Brief.