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Preparing a Successful Energy-Savings Proposal

Feb. 1, 2010
The analysis and documentation that go into a successful presentation

Convincing a client to incur the additional first cost of an energy study during systems implementation is as much about marketing as it is about technology. The old adage that a good product sells itself applies as much to this situation as with any other product or service. If the concept is approached correctly and the right principles are applied, there is a good possibility everyone will come out a winner. This article discusses the preparation required for a successful energy-savings proposal.

Getting Started

To be of service to a client, an engineer should become as familiar with the client's business as possible. Meeting with the client (or end user if the client is a second party) to discuss the business's daily operations and walk through its facility to observe common activities and practices should be an integral part of this effort.

A general examination of site activity schedules could reveal potential wasted energy. For example, certain types of equipment may be run during peak utility hours, using large amounts of electricity. A plant could realize the same production volume while significantly reducing equipment operation costs by running equipment during a second or third shift.

An examination of the types of energy used, as well as relative unit costs, is critical for a proper energy-usage evaluation. A building that primarily utilizes electricity for heat and power will need to be evaluated differently than one that uses natural gas or fuel oil for the same applications. For example, an engineer may wish to examine the feasibility of using cogeneration, photovoltaic cells, or battery storage as options for electrical power. Likewise, the engineer may want to investigate optional fuel mixtures, reclaimed waste oil, or alternate gases (such as propane/natural gas) if fossil fuel is a major energy source.

When examining energy-reduction options, such as alternate fuel sources, in-house scheduling, or alteration of energy-usage habits, an engineer must become familiar with base costs, rate schedules, and market trends for each utility. Additionally, future energy usage and economic trends need to be anticipated.

An engineer also needs to survey for possible avenues of energy waste in existing buildings as well as anticipate the conditions for retrofits, major renovations, and new construction. This should be completed while the engineer considers potential methods of energy-waste reduction and energy-use improvement or optimization and energy sources currently in use and those that may be used in the future.

Lastly, potential savings areas should be addressed with the client. (In this case, the term “savings” refers to one or more of the following sources: first, maintenance, replacement, and/or life-cycle costs; energy-usage and/or energy-cost reduction; a minimum payback period; and government/utility grants, incentives, and/or rebates.)

To find potential savings in existing buildings, consider:

  • Modifying current practices that impact energy usage.

  • Modifying current powered systems and/or components.

  • Replacing existing systems and/or components.

  • Implementing entirely new systems.

To find potential savings in new buildings, including major renovations and additions, consider:

  • Developing a baseline energy model for comparison.

  • Developing new energy models.

  • Implementing systems or combinations of systems.

The engineer needs to be responsible for asking questions and working closely with the client to determine which savings avenue will be the most beneficial and acceptable.

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Energy-Savings Proposal

The three major stages of a successful energy-savings proposal are study, documentation, and presentation.


Although the format of an energy study may differ from one project to another, a good study at least should include:

  • Present-condition energy analysis

    For new buildings, a present-condition energy analysis requires the development of an energy model that makes assumptions based on the systems employed in buildings of similar use within the same (or similar) geographic region.

  • Project energy analysis and comparison

    A project energy analysis and comparison requires energy modeling for new construction and existing structures.

  • Related building information

    For new and existing buildings, related information includes building-envelope type, construction, fenestration, materials, building orientation, and climate.

  • Budgetary data

    Budgetary data exclusively are a function of the client/end user. The data should contain project first-cost limitations, as well as periodic budgets (monthly, quarterly, annually, etc.). The data also should include any grants, incentives, and rebates offered by the local, state, or federal government or local utilities. Financial benefits may be realized for use of Energy Star-rated equipment, meeting specified local or state energy-reduction guidelines, and/or achieving a specified level of Leadership in Energy and Environmental Design (LEED) Green Building Rating System certification.

Energy analyses are completed in much the same way regardless of whether a building is new or existing. However, with an existing building, the engineer may not have the option of altering building materials. When possible, becoming involved with a new-construction project at its early stages can be highly beneficial.

An important concept to understand is that an energy analysis can be performed exclusive of energy costs. Typical energy-modeling software includes fields for cost data (equipment, materials, utilities, etc.), which can be entered if available. However, because energy usage is the primary interest at this stage, the initial focus should be on building construction, usage, and environment.

When analyzing a building as a whole, checklists/tables can be of great assistance. A large amount of data usually is acquired during this phase, and checklists/tables provide a convenient means of organization. Furthermore, the format developed during an initial project can be carried over to subsequent projects.

A building-construction analysis should include the following, which are required by most energy-modeling software: wall/roof construction and composition, floor-slab type and composition, fenestration and shading, and insulation.

A building-usage analysis should include use category, lighting type and density, occupancy and schedules, powered equipment and system types and schedules, and energy bills.

A building-environment analysis should include geographic location, local climate, building orientation, and indoor/outdoor design conditions, such as temperature and humidity.

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Present or projected energy usage can be calculated based on these analyses. Subsequent scenarios can be run and compared with existing or baseline conditions. Once this is complete, equipment and utility costs can be inserted to develop a rough estimate of first and life-cycle costs and payback periods.

At this point, some engineers might prepare a preliminary report for the client. For smaller projects, the report simply might state the potential for present or near-future energy savings and/or implementation payback periods. For larger projects, especially those with limited budgets, the report can be used as a tool to tailor the remainder of the study to meet as many of the client's needs as possible within a given budget. Some clients will provide the engineer with a budget at the outset of the project; however, that is not always the case. Budgetary issues should be considered during a project's earliest stages when deciding if a preliminary report is necessary.

Preparing the documentation

After the study has been conducted, documentation should be prepared. The energy analysis's goals for the final presentation are accuracy, focus, and legibility. It is important to remember that the client's opinion of the final product ultimately may make or break the project. Therefore, it is up to the engineer to address these goals in an acceptable manner.

Before final documentation is prepared, it is imperative that all available energy and cost data, including energy-study data; equipment, installation, maintenance, and fuel costs; utility rates and schedules; and client budgets, be recorded.

Costs will fall into three primary categories:

  • Energy

    Energy costs include fees from local utilities and other power sources.

  • Implementation

    Implementation costs include charges accrued from required demolition and construction (e.g., labor, materials, equipment, transportation, storage).

  • Maintenance

    Maintenance costs include expenses garnered from equipment care and parts/equipment replacement.

When examining energy and maintenance costs, it is important to factor in market-value changes over time. Energy costs will be affected the most; however, maintenance costs also will need to be adjusted for standard inflation.

Standard utility items, such as electricity, natural gas, and water, are affected by inflation, periodic rate hikes, and deregulation. Additionally, fossil fuels and derivatives, such as coal, oil, kerosene, and propane, are affected by the international oil market. Proportional material- and transportation-cost increases should be accounted for as oil prices escalate because many products are made with petroleum derivatives, and all products require transportation. It is important to account for all of these issues in a life-cycle analysis.

Figure 1 is a typical cost-estimate worksheet that includes energy cost savings and payback periods. The worksheet includes items such as labor rates and burden, overhead, and sales tax.

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Lead time, which applies to equipment delivery and transportation, as well as earth-moving-equipment availability, often is overlooked during documentation. This information should be included in the final presentation.

Documentation also should address various areas of concern, such as safety, ease of use, and code compliance. This is especially important when a cost-savings initiative is not easily quantifiable. Some clients may address these areas up front. If not, it is good practice to ask a client if such items should be included in the final report. The engineer also should be aware of items that the client does not want to see in the report.

Delivering the presentation

A final presentation should include results of the energy analysis, system options, and cost comparisons. These elements should provide the client with an overall picture of potential energy and cost savings.

Regardless of whether it is given in person or by correspondence, a presentation at least should include:

  • A narrative that includes a project overview, assumptions, summary/recommendations, cost-savings initiatives and procedures, and areas of concern.

  • Energy-analysis results.

  • Payback-analysis results.

  • Graphics, such as charts, tables, photographs, and/or schematics used to clarify, illustrate, and/or support the material in the narrative.

The narrative should be supported by all of the other documentation. It should contain easy-to-understand language presented in a format useful to the client. Often, energy-analysis and payback results and graphics are included as appendices. Equipment-catalog cuts may be included in the supporting material as well.

The energy-analysis portion of a presentation should include complete lists of energy sources and energy-utilizing equipment, as well as minor items, such as heat for domestic hot water and other incidentals. Baseline and projected reductions in energy usage should be provided on the basis of monthly, quarterly, annual, seasonal, and zoned use for ease of review and comparison. To clarify potential energy savings, a table with comparative values for each use may be prepared, giving the client an “at-a-glance” view of energy savings.

Providing system options allows clients to tailor the subsequent HVAC, electrical, and other energy-utilizing systems to their specific needs. A client may have some alternatives in mind already; however, the engineer needs to be aware of the capabilities and limitations of each option. It is the engineer's responsibility to be familiar with the types of systems that are available for specific applications and to work closely with vendors and product representatives who know the capabilities and limitations of their equipment. An analysis of system options should include existing or baseline system data and requirements, as well as data and requirements, benefits and drawbacks, and required maintenance and expected equipment life for each proposed system.

The engineer also must be prepared to give details concerning any customized systems or approaches. Figure 2 is an illustration of a custom heat-recovery system designed to reclaim heated waste water for use in a hot-water pre-heating application.

Cost comparisons are critical to a presentation's successful delivery. A good cost comparison should include installed costs, financing data, simple payback on investment based on projected energy savings, life-cycle and maintenance costs, and depreciation. Also, it should provide “breakout” costs to match the energy analysis. In this manner, the client can see the energy and cost savings in each area. Not only will this assist the client in understanding areas of potential savings, it will provide the engineer with a tool that illustrates where significant energy savings are being realized through planning and/or remediation. These items then can be highlighted in the narrative.


Preparing a follow-up plan is a courtesy that will go a long way in maintaining a good client relationship. To assemble additional documentation that can be utilized for a follow-up plan:

  • Develop a comprehensive plan that promotes good energy-usage practices.

  • Offer some modifications to existing equipment-usage schedules.

  • Review building occupancy schedules and provide a comparison to system and equipment schedules.

  • Suggest the use of a standard format, such as LEED for New Construction criteria for enhanced commissioning, to ensure that all disciplines are working together from the outset of the project.

  • Use a standard format to measure and verify temperature, humidity, and comfort control, ensuring proper equipment performance and occupant satisfaction.

  • Be prepared to provide value engineering during the project's design phase.

  • Be prepared to provide construction-administration services during the project's construction phase.


As with all engineering endeavors, good planning lays the foundation for a successful energy-savings presentation. A thorough study of the project and available energy data provides accurate material for documentation. Being mindful of the presentation throughout the process makes it that much more useful and impressive to the client. When the engineer is successful and the client saves money, both come out winners.

Did you find this article useful? Send comments and suggestions to Associate Editor Megan White at [email protected].

A senior mechanical designer for Century Engineering Inc., Jack Burton, LEED AP, has been employed in the engineering and construction fields since 1984, having worked in the civil-, electrical-, structural-, and mechanical-engineering disciplines. He holds a bachelor's degree in mechanical engineering from Warren National University.