The Shockingly Short Payback of Energy Modeling

Energy modeling is often used to evaluate energy conservation measure (ECM) payback, calculating the operational energy savings that accrue after an initial capital investment. Energy modeling itself can also be viewed as an ECM, with an upfront cost during design that leads to operational savings. Given that viewpoint, it is interesting to evaluate the cost-effectiveness of modeling. As a rule of thumb, an ECM is considered cost-effective or attractive if its payback is shorter than three years. What is the typical payback of modeling?

Architecture firm HOK calculated the payback of energy modeling—cost of modeling divided by modeled energy cost savings—for a number of their projects. The results? Modeling usually pays for itself in a month or two. Credit: HOK.

Project Name% Modeling
Fees vs.
Gross Fees
Annual Modeled
Energy Cost
Savings
Payback on
Modeling Fees
in MONTHS
Office Building0.7%$122,8762
Office Building0.5%$306,6921
Justice Center0.8%$350,0003
Convention Hotel0.6%$233,7911
Regional Hospital2.4%$3,300,0001
Government Office Building3.3%$186,0004
Government Building 201.1%$224,2762
Cancer & Critical Care Tower0.6%$853,0133
Institutional Research Center0.6%$340,0003
Energy Institute2.5%$169,4327
Institutional Research Facility1.0%$302,1691
Science Teaching/Research Facility0.8%$419,5991
Corporate Headquarters1.0%$239,8354

See the full article at energy.gov