Energy Benchmarking: What Is It And Why Does Your Business Need It?

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If you want to control energy consumption, and therefore cost, you must be able to measure it. In that sense, energy benchmarking becomes the single most effective tool you can harness to make effective, long-term energy management decisions.

Benchmarking isn’t unique to energy management, and it’s likely you have been employing similar techniques in other areas of your business. At its heart, the concept is the same: You evaluate and analyze something (e.g., energy) and compare it to something else (e.g., standards and past performance).

When it comes to utilities, benchmarking specifically looks at an organization’s energy and water consumption and, in doing so, makes it easier for property and business owners to identify and act on opportunities for improvements.

The following questions and subsequent answers can better define energy benchmarking and what role it plays in your business

What’s Being Compared?

Benchmarking for your business can include two primary sets of data: internal and external. Internal data includes historical energy or water consumption, preferably at least 12 months of data. This piece of the puzzle helps you to identify unique issues that exist within your organization and patterns that can signal issues that need to be addressed as well as opportunities for improvement.

On the other side of the equation are external factors, and these are specifically important for those who must comply with city and state mandates, on which I’ll elaborate shortly. These external factors take into account the consumption patterns and historical data specific to buildings of similar sizes and in similar industries (retail, commercial, manufacturing, etc.). That information, which is collected through and available from the ENERGY STAR Portfolio Manager, the EPA’s tool, is used to measure how your business is performing compared to others that share similar traits.

Together, these data sets provide business owners and property managers with the information necessary to make positive changes to their current energy management strategies.

Do I Have To Implement Energy Benchmarking?

That depends on where you are and what type of business you run or property you manage. Today, as energy costs become increasingly volatile and we as a nation are faced with environmental and sustainability concerns, several major U.S. cities have adopted benchmarking. Similarly, federal agencies are required to lease or own properties that are benchmarked by ENERGY STAR.

If you’re not sure if your city requires benchmarking, contact your local government, as each city has its own set of rules that dictate what type of buildings need to be benchmarked and when benchmarking submissions are due. Failure to comply with rules can result in substantial fines.

If you don’t operate in a city that requires benchmarking, you obviously are under no obligation to comply. However, more and more cities are considering benchmarking policies, and in the end, your company can truly benefit from this type of data analysis.

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