Why calculating energy savings is important
Insofar as investing in energy efficiency is smart operational practice, it’s crucial to determine your energy savings carefully to guarantee that your investment is cost-effective and ultimately worthwhile. More often than not quantifying these figures simply involves comparing and contrasting this years energy usage with previous years.
A bar chart is great for comparisons but it’s not an accurate way to calculate energy savings
Just because bills are reduced year-on-year does not mean you are saving money
Changes in influential factors such as production levels or weather, can cause our energy consumption to increase or decrease
These ‘apparent savings’ mislead people into thinking that they have improved energy efficiency when in reality this is not the case
Why standard methods are inadequate
This type of time-dependent analysis is a useful tool but it has it’s limitations; it’s difficult to identify why certain trends occur, or if perceived trends even exist at all. Attaining real energy saving figures is, by virtue of interfering factors, a little more complex.
Take, for example, the influence weather has on heating energy usage. Summers can be warm or cool, while winters can be mild or extremely cold. No two years are the same, which is why simply comparing one year’s heating consumption data with another’s is futile, as demonstrated in the chart below.
It’s impossible to tell whether efficiency is increasing or decreasing in a chart like this because energy consumption is not consistent every year
As various conditions influence energy usage differently every year, there is no standard or benchmark to compare against
This means that the year with the lowest consumption is not necessarily the most efficient
How Dattica solves this problem
At Dattica we are not comfortable guaranteeing our customer’s savings based on simple year-on-year numbers. We believe that if our customers are investing time and money in energy efficiency then they deserve accuracy when calculating their return.
That is why we employ a better, more reliable method: Regression Analysis. This statistical technique determines and quantifies the relationship between variables. Imagine you want to know the connection between your energy consumption and some influencing factors like occupancy, sales, weather, and production. Regression is the method of measuring the link between these phenomena. It’s purpose is to give you a better understanding of how your energy is being used and what event has the most impact.
Most significantly, regression analysis is used to forecast future energy performance which means you can predict what is likely to happen to your expenses in the next quarter or year, pinpoint and correct potential energy wastage costing you money, and calculate with accuracy the true energy saving figures.
How regression can impact your business
To better grasp the benefits this type of analysis has to offer, consider the following questions you may have asked yourself in the past:
- What driving factors contribute most to your company’s energy costs?
- What will a cold winter or hot summer do to your company’s profits?
- How will a price increase affect sales?
- What effect will an energy savings programme have on future production output?
- How much will the energy required to reach specific production targets cost?
- How much money will an energy efficiency scheme save?
- What will happen to energy costs when the price of oil starts increasing again?
Regression investigates and answers all of these questions, and more, providing valuable insight that can help your company make smarter decisions and move towards a more profitable future.
What this means for you
By fully appreciating the power of this analysis, Dattica delivers evidence-based energy savings analysis adjusted according to actual environment conditions, enabling you to look at energy with an entirely different perspective.