Energy audits: Are they worth the effort?

By John Nicholson   

Industry Operations Energy Manufacturing energy manufacturing utilities

Significant cost savings result from implementing recommendations.

Thanks to an energy audit, Magnotta Winery in Vaughan, Ont. also met York Region’s sewer bylaw limits, reducing surcharge costs. PHOTO: EBC

Any good business owner knows the two ways to affect the bottom line: make money or save money. Most businesses focus on the former at the expense of the latter. In Canada, there is renewed interest in energy audits because of the rising cost of electricity and the availability of government assistance to offset the cost of the audit and implementation of recommendations.

Many public utilities around the world encourage energy conservation. From the public utility perspective, it’s cheaper to invest in electricity reduction programs than it is to construct new generation capacity. With climate change policy becoming enacted as legislation in many jurisdictions across North America, the drive toward energy conservation is being accelerated. For the most part, reducing energy use also reduces a business’s carbon footprint.

The most basic form of an audit is the examination of the electricity use at a facility, which includes a walk-through to determine potential no/low cost energy savings. More complex audits breakdown energy uses, identify conservation measures, and calculate the cost/benefit of implementing specific energy saving measures.

Brian Bobbie, president of the Altech Consulting Group, which has been performing energy audits since early 1990s, says energy audits usually pay for themselves. “We view energy audits as an important first step in reducing the electricity costs for businesses. We’ve found that companies that arrange to have an energy audit also find efficiencies in other areas of the facility such as water usage.”


There are very few instances where companies that commit to energy audits do not find it useful. There is plenty of anecdotal evidence that significant cost savings result from implementing the recommendations from an energy audit.

Do energy audits pay?

There are plenty of examples of companies implementing energy saving measures that have immediate pay off that reduce electricity bills by 20% or more. But to qualify for rebates, you need to ensure that you hire a qualified energy auditor who is a professional engineer (P.Eng.), certified energy manager (CEM) or other designation specified in the program. Ask the firm for its designation, request references and confirm with licensing bodies.

“There are a number of firms in Canada that have the qualifications, expertise and experience to conduct an energy audit,” says Bobbie. “The key to a successful audit is finding an auditor that has a depth of experience, can do the cost-benefit analysis, and payback calculations that allows for easier decision making on what energy saving recommendations to implement.”

Ask candidate firms for examples of how they were able to use the findings from energy audits to generate recommendations that were practically integrated with the business and operations of the company.

Would you refuse $25,000 in financial incentives to conduct an energy audit? Ontario utilities, through the Save-on Energy Program, offer just that to businesses interested in arranging for an energy audit and reducing energy costs. The program not only applies to industries that own their own buildings but companies that are tenants as well as commercial firms, institutions and multi-residential buildings.

Ontario’s audit funding program covers up to 50% of the cost of an energy audit. The funding allotment is based on the size of the building. Buildings up to 30,000 square feet receive an incentive of $0.10 per square foot up to a maximum of 50% of the audit cost. Buildings larger than 30,000 square feet receive $3,000 and $0.50 per square feet up to $25,000 or 50% of audit costs thereafter.

There are several types of audits ranging from a simple electricity survey and analysis to a detailed analysis of capital-intensive modifications.

The detailed analysis identifies potential capital-intensive projects from the electricity survey analysis. Detailed field data combines with in-depth engineering analysis to provide potential project costs and savings calculations.

To get started, contact your local hydro electricity company. It will guide you through the application process. You need to complete a form and also select an acceptable auditor.

Available capital incentives

What is the use of an energy audit that has some really good suggestions if you can’t afford to implement them? Under the existing programs, there is funding available for implementation.

In Ontario, a capital incentive program provides up to 70% for the cost of capital equipment. The small capital incentive supports investment in capital projects for large projects that will increase the efficiency of a process or system at a facility. The project capital incentive is aimed at very large process and system energy efficiency projects. Generally, large projects that don’t fall within the Small Capital Incentive Agreement parameters would go through the Project Incentive Agreement.

Your local hydro electricity company pays out the funds. The Ontario Independent Electricity System Operator (IESO) oversees the entire program, which is responsible for balancing the supply of and demand for electricity on a second-by-second basis across Ontario’s high-voltage transmission lines.

It’s also the lead on province-wide conservation efforts that are expected to reduce electricity consumption by seven terawatt-hours by the end of 2020.

To find success stories, one needs only to visit the web sites of the local electrical utility. Almost all of the web pages for utilities have a link to conservation programs.

For example, a meat processing facility saved $70,000 in annual electricity costs by rescheduling the electrical loads from refrigeration systems. The payback on the cost of implementing the modifications was one month. Another company was able to immediately realize an annual savings in electricity costs of $19,000 from a refrigeration system by better controlling the airflow through the plant.

Another success involves the Flakeboard Co. Ltd. located in Sault Ste. Marie, Ont., a manufacturer of medium density fibreboard panels used in construction. It replaced an industrial dryer with a new, energy efficient unit. The result was annual savings of $130,500 in electricity costs. Moreover, Flakeboard received $355,600 from the local utility to offset the cost of the new equipment as part of the power authority’s incentive program to reduce energy use.

Pulling the trigger on an energy audit is similar to the commitment to lose weight or to quit smoking. It’s common sense that it will be helpful but competing priorities and procrastination sometimes push it down the list of things to do.

Now is a good time to make an energy audit a priority. The Ontario incentive program is set to expire in 2020.

John Nicholson is president of Environmental Business Consultants (EBC) in Toronto. E-mail or call (647) 836-4064. Visit

This article originally appeared in the September 2018 print issue of PLANT Magazine.



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