A Guide to Energy Benchmarking 

Updated on December 19, 2023

When seasonal storms and cold snaps can send energy bills skyrocketing, there’s one clear way businesses can protect themselves from the risk of a larger-than-normal bill with so much uncertainty in the winter months: prioritizing energy efficiency. 

In this article, I’ve offered up a 101-level guide to energy benchmarking, the first step in creating a truly effective energy efficiency program for your organization. 

Why Energy Efficiency Matters

Buildings use a lot of energy: According to reports by the U.S. Department of Energy, commercial buildings account for 36 percent of the nation’s total electricity consumption. Unfortunately, not all energy is utilized  efficiently.

 The EPA reports that the average building wastes almost a third of the energy it consumes. This energy inefficiency also hurts financial performance. Of total operating expenses, commercial buildings are often overspending on utility bills.

There’s an opportunity to improve the way that buildings track and analyze their energy operating expenses. Starting at little to no cost, businesses can strategically reduce energy usage, as that’s the beauty of energy benchmarking. Let’s take a closer look at how benchmarking works.

How Energy Benchmarking Works

With an understanding of where operations are today, a business can determine when and how they’re using energy, as well as the impact on energy costs.  

Energy benchmarking is a results-driven approach that enables internal comparisons of energy efficiency efforts and helps consumers ensure their efficiency efforts are successful. Regardless of the type of building or facility, having an energy benchmarking plan is fundamental to immediate and long-term sustainability and fiscal strategy. 

You’ll want to start by gathering as much internal energy data as possible.  Find their data collection worksheet here and then compare it with data from the EPA’s ENERGY STAR Portfolio Manager, which offers market standards. It’s important to note that not all building types qualify for an ENERGY STAR score, but can determine their equivalent by working with an energy consultant or outside resource.

For help in gathering and analyzing this data, it can be beneficial to consult with an expert, which could include your energy supplier. Organizations are most likely to have success implementing energy efficiency efforts and controlling costs when their operations, maintenance, and finance and accounting teams work together.  

Once you’ve successfully benchmarked all relevant energy data and evaluated it, you can begin to identify strengths and weaknesses and begin to make process and equipment adjustments that can reduce total energy consumption. The results of these efforts can be quantified from an environmental, social, and financial perspective.

Making an Energy Benchmarking Plan

The following steps are designed to help businesses, building owners, and managers get started with a general plan for benchmarking their facilities.

Step 1: Set Goals

Goal setting helps determine what data to collect and the insights to look for when starting an analysis. Common energy benchmarking goals for those just getting started might be to validate savings from energy efficiency projects, evaluate the performance of an energy efficiency program, or measure the environmental impact of a facility.

Step 2: Collect Data

Building owners, managers, and occupants can manage and improve upon only what’s tracked. For historical comparison purposes, aim to collect a 36-month history of all energy bills, both utility and supplier bills.

Determine the best method for data collection of all utilities moving forward. It may make sense for your organization to create a central account to store all the utility data coming in from different energy providers.

Step 3: Manage the Data

A good starting point is to leverage the tools available from ENERGY STAR. The organization provides a spreadsheet in which energy data can be entered manually and then sent to be uploaded into the Portfolio Manager benchmarking tool.

Work with your energy supplier if they have energy data management and analysis resources. For example, IGS Energy offers a tool that automates energy data management for customers and manages all utility bills in one platform. Taking many data streams and presenting them in customizable dashboards is a nice perk for businesses that don’t have the internal resources to manage this work completely internally. 

Step 4: Make a Strategy

Now it’s time to extract the important pieces of information from your spreadsheet or with the support of your data partner and put your strategy in place.

Look at trends over time and see if there are any outliers, good or bad. Make comparisons between the performance of the buildings in your portfolio. Determine the most and least energy-efficient. When comparing your buildings, make sure to normalize the data for certain factors including weather, building occupancy, and/or size of the buildings.

Step 5: Act on Insights

After listing all your insights, share the information with your team for input. Look at behavior. Observe the ways that people and mechanical equipment impact each building’s energy usage.

Use the practices of the top-performing buildings as a guide to improve the worst-performing buildings. Implement your changes and keep testing to see if energy efficiency improves.

Why You Need to Get to Know Your Energy Bill 

About half of a company’s energy bill is driven by their energy demand. Demand is the measurement of the largest interval of power used during the billing period. Consumption is a measurement of the total quantity of power you use during the billing period. The demand an organization is billed for represents the peak amount of power used at any one time during the billing period. Energy efficiency efforts help save organizations money by lowering the demand required to run a facility. In turn, being able to flex energy load through efficiency solutions is one of the simplest ways to reduce energy spend. 

Reviewing a year’s worth of interval meter data is key to identifying if the peak demand you’re being billed for happens often. If your organization’s peak demand is infrequent, you can work with your operations and maintenance teams to determine which processes are causing this demand.  

Finding ways to reduce energy consumption should be every organization’s priority this time of year, as making any reduction in energy costs can dramatically reduce energy spending.

Reagan Mamer

Reagan is the director of innovation for IGS Energy. Reagan joined IGS immediately after graduation and, after leading a variety of product teams across the organization, now directs their innovation department: IGS Labs. She is passionate about creating products that provide true value to their customers. She also has a passion for achieving gender equity in the workplace and leads their internal community, the Women of IGS Network. Outside of work, Reagan loves to travel, run, and spend time with friends and family.