Why Your Business Should Conduct an Energy Audit

Most times when you think about reducing costs in running your business, it means that you will have to cut something, whether it’s employees or funding for projects. But there is one thing you can do that will actually help your company grow while reducing costs.

An energy audit is a relatively painless checkup on your company’s energy efficiency. The cost of energy inefficiency for a small business can run in the thousands of dollars every year. And many business owners don’t realize there are a lot of ways they could reduce those inefficiencies with little or no investment.

What Is an Energy Audit?

An energy audit is nothing like an Internal Revenue Service audit; so don’t let the idea of an audit make you nervous. A better way to think about it is as an energy assessment. The audit assesses how efficiently energy is used in your building and shows how you can improve it. An auditor will look at how well a building keeps the desired air in and the unwanted air out, the “envelope,” as people in the industry call it. This includes looking at insulation, windows, and doors as well as internal systems such as heating, cooling, and lighting.

Should I Get an Audit?

If you’re unsure whether you need an audit, look at the age of your building. Generally speaking, buildings built in the past 15 years are probably fine, but even if your business occupies a structure put up as recently as 1996, and hasn’t received any upgrades since, an audit is likely a good idea.

How Much Will It Cost?

Audits can run in the thousands of dollars, but there are incentives offered by states and energy providers that drastically reduce the cost to a business owner. Most states offer a free or discounted audit, with direct incentives for specific upgrades. In New York state, for instance, the fee for an energy audit can range from $100 to $400 dollars, depending on your annual electric bill. In Wyoming, the state will pay up to 75 percent of a $5,000 audit.

Don’t forget that an audit is an assessment, not a solution. When the audit is finished, you’ll learn the most cost-effective ways to improve your company’s energy efficiency. These changes will cost you, at first, but they should pay you back in a few years.

There are also often direct cash incentives for certain upgrades. In New York, for instance, upgrading an old incandescent exit sign will get you a direct incentive of $10. With incentives such as these, the cost of upgrading will pay for itself in just two to three years. The New York State Energy Research and Development Authority estimates a company could save as much as $103 a year replacing exit signs alone.

There is also a federal tax deduction, called the Commercial Building Tax Deduction, for small businesses. Recently renewed through 2013, this allows business owners to claim 30 cents to $1.80 per square foot of the building.

How Do I Get Started?

Ed Smyth, a project manager at KEMA, a global energy consulting firm, emphasizes that smarter usage habits are a key part of an energy audit. He says that part of the intent of the audit is educating business owners that their attitude and behavior is just as important as better equipment. “There’s no replacement for common sense,” he says.

In fact the golden rule of energy efficiency, says Smyth, is that the “cheapest, cleanest, greenest kilowatt is the one that’s never used.”

To get you started on your own energy audit, check out the Database of State Incentives for Renewables and Efficiency website, which gives visitors a list of federal and state programs that can help you save money by reducing your energy output.