Energy Efficiency Calculations

Key Calculations For A Comprehensive Energy Efficiency Strategy

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A comprehensive energy efficiency strategy for a commercial building involves striking a delicate balance between cutting energy costs and maintaining tenant (client) satisfaction. Just like any other form of strategy, an energy efficiency strategy for commercial properties has its advantages.

Energy consumption ( href="">HVAC) contributes largely to the operational cost of commercial buildings. This makes it critical to the sustainability of these commercial structures. In coming up with an effective energy efficiency strategy, the sustainability of commercial structures has to be considered. Sustainability with respect to commercial properties (irrespective of venture) can be looked at in two principal ways – financial and environmental, both of which are critical.

Financial sustainability is gauged with respect to a commercial building’s ability to continuously make revenue, which surpasses expenses, hence profit. Without profits, a building as a commercial venture is simply not sustainable. Profits are an indication that a commercial property can cater for the financial needs of its operational activities. These needs include paying bills and salaries of employees. Without staff, heating, lighting and air conditioning, a commercial property will lose all its occupants, precipitating a wind down.

Profits also provide returns on investment (ROI) to the owners of a commercial property. Should a commercial property not provide adequate returns, the owners could simply move their money unto some other venture, bringing an end to the commercial building’s sustainability. Given that an energy efficiency strategy is aimed to cut energy costs without hurting occupant experience, it could lead to higher profits and financial sustainability of commercial buildings.

With respect to environmental sustainability, commercial buildings have an obligation, which is mandatory in some countries to not breach a certain pollution limit over a given period of time. In coming up with an effective energy efficiency strategy, commercial buildings play a role in providing a healthy environment for the next generation of occupants. Environmental degradation will have a hugely negative effect on everyone and everything, commercial properties inclusive.

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An energy efficiency strategy drives innovation. In the quest to be even more energy efficient, commercial buildings often locate those areas of high-energy consumption. With the aim to cut down both consumptions and cost, energy efficient commercial properties serve as a constant motivation for manufacturers of energy consuming devices. This motivation coupled with the need of the manufacturers to acquire more market share, pushes them to come up with innovative solutions.

Now that we understand the key factors of an energy efficiency strategy, let us take a look at the most commonly used calculations in it:

Key Calculations for a comprehensive energy efficiency strategy:

The concept of energy efficiency has varying definitions depending on the context of applicability with respect to the goal to be achieved.

The Energy Conversion Approach to Energy Efficiency:

Energy efficiency on the one hand is the ratio of energy output to input. That is to say, what amount of energy is created as a result of a specific quantity of energy input? It is calculated by the formula:

Energy Efficiency = (Energy Output)/(Energy Input)

Using the aforementioned definition, a commercial building will be said to be more energy efficient at higher positive value resultants (higher energy output to input ratio) of the formula above. This method of calculating energy efficiency is criticized on the grounds of it not taking in to consideration financial cost and the environment. 

The Financial Approach to Energy Efficiency

Throwing finance in to the mix, Energy efficiency gets calculated as a function of the financial gain made per unit of energy consumed over a given period of time. Putting this in to context, a commercial property which makes $1,500 a month per square foot with a proportionate energy consumption of 3 kilowatts (Kw) is seen as less energy efficient, compared to one with a monthly income of $2,500 and energy consumption of 4 Kw over the same surface area. A derived formula from this will be:

Energy Efficiency = (Income per area of n)/(Energy consumption per area of n)

Where n = period (day, week, months, year, etc)

The Environmental Approach to Energy Efficiency

Taking in to consideration the environment, energy efficiency is defined as using less energy in performing the same task. If the lobby of a commercial structure which used to be lit by ten bulbs of 4 watts each could be provided the same luminosity by ten bulbs of 2 watts each, then the 2 watts option will be seen as more energy efficient.

Of all the aforementioned angles from which energy efficiency could be looked at, this is probably the most comprehensive. This method of calculating energy efficiency takes in to consideration some elements of cost (finance) in terms of energy consumption in its goal of environmental protection.

For commercial buildings to come up with an effective energy efficiency strategy, a balance will have to be met with respect to energy conversion ratio, benefits per unit of energy consumed and the environment.

Component and Equipment Lifespan

Energy efficiency in commercial buildings can always be linked to the devices, equipment and components using energy within the structure. In coming up with an energy efficiency strategy, the management of a commercial property will have to calculate the lifespan of the energy efficient equipment to be purchased, installed and/or modified. Energy efficient equipment with a short lifespan necessitating frequent maintenance or replacement cost could be seen as less desirable compared to a stable substitute which is slightly less energy efficient. In deciding on what equipment to get as part of an energy efficiency strategy, the lifespan of the equipment should be taking in to consideration.

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To put this in context, let’s assume that the current equipment responsible for air conditioning in a commercial building cost $75,000 and consumes 250,000 watts of energy per year with maintenance once a year costing $2,500 and a lifespan of 5 years. Assuming further that energy consumption is priced at $1 per watt, this will imply an annual energy consumption of $250,000.

On the other hand, there is a more energy efficient system, which provides the same level of air conditioning at only 225,000 watts a year, with a cost of $60,000 (2 years lifespan) and an annual maintenance cost of $50,000.

Below is the calculation that should help the building’s management make a strategic decision, assuming the straight-line method of depreciation.

Description Current AC ($) Alternative AC ($)
Depreciation (75,000/5yrs)  =    15,000 (60,000/2yrs)  =    30,000
Energy consumption 250,000 200,000
Maintenance 2,500 50,000
TOTAL 267,500 280,000

From the table, it is clear that though the alternative AC consumes less watts of energy, the current system is more desirable as it has a longer lifespan and low maintenance cost, making it more affordable. However, if the commercial building is pro Green Earth, they might opt for the alternative AC because of its low energy consumption level. It all boils down to core values and objectives of your energy efficiency strategy.

Energy Recycling

In the development of an effective energy efficiency strategy for a commercial building, it is important to calculate the recycling potential of available energy. Most devices in consuming energy give up some other form of energy. In most cases, the energy being consumed is heat. Heat energy is very important, as it could be recycled even in to electrical energy. By calculating the amount of heat being given off by the devices and equipment within a commercial building, the amount of annual energy consumption could be offset against that of the recycled energy.

Take in to consideration a commercial building with a monthly energy consumption of 500,000 kilo watts, and heat emission the equivalent of 25,000 kilo watts. In its strategic energy efficiency plan, the building’s management could find ways to harness the current 25,000 kilo watts being wasted, by channeling it in to other energy consuming processes. This will reduce the building’s mainstream (paid for) energy consumption by the value of the energy recycled.

Activity Based Energy Consumption

This is closely related to occupant based energy consumption. Commercial buildings in their energy efficiency strategy could compare energy consumption on the bases of occupant type or activity type. For example, laboratory activities consume way more energy than offices. Taking this in to consideration with rents paid by different occupants based on activity, a commercial building can come up with the best activity balance mix to optimize energy efficiency.

A commercial property whose major occupants carry out laboratory activities could decide to begin shifting more towards the provision of office spaces because they consume less energy comparatively. This will of course have to be with the assumption that the rents per square foot under both activities in the building vary, or that office rents are comparatively higher than that for laboratory space.

Climatic variations

Climatic conditions and fluctuations are a major reason for energy consumption. It explains why we use more heating in winter and more air conditioning in summer. This makes calculation of climatic conditions a very important aspect in a commercial property’s energy efficiency strategy. By understanding and factoring in climatic fluctuations in to an energy efficiency strategy, commercial building operators will know when to regulate the supply of certain energy consuming functions – as opposed to having them on 24/7.

Energy consumption trends might show that only about 5% of occupants in a commercial building use air conditioning in winter, or when temperature drops below 5 degrees. Using this data, a smart commercial building leveraging the Internet of things (IoT) could program its air conditioning system to operate at 10% capacity (5% error margin) when ever temperatures heat 5 degrees and below. Or alternatively, the building’s air conditioning system could be manually set to operate at 10% capacity during winter. This will go to reduce energy consumption as oppose to if the air conditioning was allowed to run at 100% capacity at all times.


In conclusion, an effective energy efficiency strategy strikes a delicate balance between financial gain, reducing costs and increasing tenant satisfaction. Financial as well as environmental sustainability are the main factors that go into an energy efficiency strategy.

There are multiple calculations that are used to achieve your energy efficiency strategy. However streamlining these calculations according to your goals will ensure that your strategy is effective.


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