When investors commit their capital, they try to maximize their return on investment under calculated risk conditions. Investment options are varied, and a portfolio is selected based on the goals and accepted risk level of each investor. 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 advisors.
Just like each investment portfolio is unique, the optimal 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 yielding poor returns or even losses.
Suggesting adequate energy efficiency measures is impossible without knowing the conditions of a building. For example, LED lighting retrofits are normally cost-effective, but the savings are diminished if a building was already upgraded a few years ago. There may be a marginal efficiency gain 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 against that of potential upgrades. While some energy efficiency measures may achieve a payback period of less than one year, other measures may require over a decade.
Equipment suppliers often report typical savings when advertising their products. However, you should not assume that this will be the case for your property. Their reported savings are based on assumed building conditions or case studies - they are informative, but may not apply for your property.
To ensure a reduction of your electricity and gas bills, energy consultants will start with a detailed property assessment. This is similar to how a financial advisor will ask about your investment goals, risk tolerance, risk capacity and expectations before helping you pick a portfolio.
Some technology suppliers provide guidance on energy efficiency, but remember they are focused on selling their product. A reputable supplier will not mislead you, but the recommendations provided will tend to be about saving energy with their technology. On the other hand, by working with energy consultants, you have an informed opinion from a neutral third party.
Energy consultants will clearly explain what works for your property and what doesn’t.
They also provide a list of energy efficiency measures with an estimated cost and benefit.
Therefore, you can select an optimal combination based on your budget and acceptable payback period.
This is similar to how a hedge fund, mutual fund or bank will present you their investment options if you approach them directly. However, a financial advisor can help you create a portfolio with a much wider selection of investments.
Like in many other engineering decisions, energy efficiency measures come with advantages and limitations. Consider the following examples:
A ground-source heat pump (GSHP) can achieve a very high efficiency in both cooling and heating mode, while eliminating the local use of fossil fuels. However, the project can be very disruptive in an existing building, due to the excavations required.
Triple-pane windows with low-emissivity glass can drastically reduce summer heat gain and winter heat loss. They are a great option for new constructions, but the upgrade is expensive and difficult in existing buildings - oldar windows must normally be removed completely, since they lack the adequate dimensions for triple-pane glass.
When upgrading to LED lighting, a lamp-only upgrade is quick and affordable, while a full fixture upgrade brings additional efficiency at an extra cost.
Variable refrigerant flow systems provide both heating and cooling with a high efficiency, but additional measures may be required for the coldest winter days. The outdoor unit enters a defrost cycle at regular intervals, interrupting the heating output.
These are just some examples of the pros and cons that must be considered when selecting energy efficiency measures. This is similar to how each type of investment brings unique opportunities and risks - some investments have low risk and low profit, while others offer potentially higher profits with an increased risk.
Energy efficiency is a type of investment: you are committing capital on building upgrades to achieve larger rewards in the long run. An optimal selection of energy efficiency measures maximizes the return on each dollar spent, while a poor selection can lead to low savings or even net losses.
Just like a financial advisor can arrange an optimal investment portfolio based on your goals and risk tolerance, an energy consultant can inspect your property to propose an ideal combination of energy efficiency measures.