To achieve our energy goals, we must improve how existing commercial office buildings use energy. It is not enough to build new buildings that are radically more energy efficient. Estimates suggest 80 percent of the office buildings in U.S. cities today will be here in 2030 and beyond.

Office buildings demand our attention not just because of how much energy they use, but because of how much they waste. Consider these common scenarios, drawn from actual case studies, of energy-intensive building systems wasting energy:

  • The cooling system schedule is set to turn on early in the morning to pre-cool the building for hot summer days. But the schedule remains in place through the fall months, when pre-cooling is not needed, and even into winter, when the cooling system fights the boiler trying to heat the building.
  • A temperature sensor breaks on one floor of an office building, and it calls for the main chiller to come on at night when the building is unoccupied.
  • Lighting on a floor is switched to “on” for a one-time Saturday meeting, then is not set back to the regular schedule after the event, so the lights come on every Saturday until someone notices months later.

Case studies show these kinds of basic system faults are common. They occur in even the best buildings, including in Energy Star–rated and LEED-certified buildings. Simply put, all buildings may stray from how they are designed to run.

These kinds of faults are usually hidden. A typical occupant of a typical office building would not likely notice and report that the chiller is on at night. The building staff often only notices faults by happenstance, after the system has run off schedule for months or longer, wasting precious energy. And correcting these kinds of faults typically means minor repairs, not major construction.

Building owners periodically hire engineers to “re-commission” a building. Years ago, building staff with Navy experience borrowed this term from the commissioning process applied to ships. It refers to the hands-on, intensive process of reviewing and resetting building systems and schedules, checking to make sure sensors work, and the like. This is one way we know system faults are common in office buildings—because engineers routinely catch and correct such faults in the re-commissioning process. But re-commissioning can be expensive and might occur once every few years, at best, in a building.

Conventional utility bills, showing 30-day usage totals, are often the sole clue to system faults. An accounting person in a real estate firm might notice a high bill and ask facility staff to investigate.

This insight led software innovators and building owners to a great opportunity. It turns out that new smart meter data is a fantastic source of intelligence about building systems. A meter is “smart” because it records readings at regular, granular intervals, such as every five, 10, or 15 minutes. The data stream is rich and offers detail that can reveal clues about faults in building systems.

New information technology has transformed many other industries, and it offers capabilities to help reduce energy waste.

Here’s how it works: Software can operate on a small computer in the building or externally with an integration to pull in the essential meter data. The information can come from the utility’s smart meter or from submeters installed on specific equipment, such as a chiller, or the air handlers serving a particular floor. Software then can produce what I call a “smart meter report” with extremely useful information that can enable building staff to catch and correct problems quickly, instead of discovering them by happenstance months later.

For example, smart meter reports can show charts of energy usage information over a whole day, revealing usage patterns and showing the actual operating schedule of systems. A report can show metrics such as energy use per square foot or usage averages on workdays, at night, and on weekends. It can show red flags if there are patterns in the data that are tell-tale signals of certain system faults, such as a chiller cycling on and off too quickly.

Reports can be delivered to facility staff by email, on paper, or through an online portal showing results from the prior day’s usage. Messages in reports can alert facility staff to correct problems quickly, instead of allowing energy waste to persist for months.

There has been rapid growth in the number of companies that provide such systems, including companies such as Agilis, AtSite, BuildingIQ, First Fuel, Retroficiency, and SkyFoundry. Companies that make building controls, such as Honeywell, Johnson Controls, and Siemens, offer similar functions with their new products. Some equipment manufacturers such as Trane can offer customers smart meter reports tied to their chillers. Companies such as EnerNOC that offer load management services also offer smart meter tools and functions. Companies such as BuildingIQ and Jones Lang LaSalle offer software tools that can be integrated to building systems to automatically make changes to set-points based on internal and external information, such as weather forecasts or occupancy changes.

Some leading building owners are now using systems with these functions, including large retailers such as Target, Kohl’s, and Walmart. Some leading commercial real estate companies, such as Vornado Realty Trust and The Tower Companies, have reported on their recent initiatives with similar systems.

But the vast majority of buildings in the U.S. still rely on traditional, every-30-day utility bills to understand their actual energy usage. The vast majority of building owners have no systematic way to identify the stray that is likely to occur in every building.

Some building owners report a fear of flooding facility staff with unhelpful data. This points to the defining challenge for software providers: reports must be actionable with distilled, useful metrics and clear corrective actions, not streams of meter data. But it’s also important to hear from the many owners that have implemented such tools: they often report “being hooked” on the new information. They say they could not imagine running their buildings without it, any more than the finance officer of a company might relinquish online access to bank accounts in favor of an old-fashioned every-30-day paper bank statement.

Some owners report concern with the cost of implementing a system to deliver smart meter reports. Several case studies suggest that the savings from lower utility bills in the first year alone will pay for the cost of the systems, plus some. And there are other values realized by owners, such as lower maintenance expenses due to running equipment better, and better load management which can reduce utility rates. A large portion of the cost of systems is simply the setup to obtain meter data.

This points to the major opportunity we have. Utilities are in a fantastic position to help their customers realize benefits from the intelligence that lies in smart meter information. Utilities could deliver a basic smart meter report to building owners and customers who request it. Conventional utility bills are terribly archaic in light of the rich stream of smart meter data and the software capabilities available.

A utility’s smart meter report could include granular metrics about usage such as daytime use, nighttime use, weekend usage, building start-up times, and shut-down times. It could include charts of daily usage so that spikes are evident. Utilities could run software against the rich data set to identify any unusual spikes in usage or patterns that warrant a “red flag” email. The reports could offer comparative insights—for instance, how nighttime base load in your building compares to other similar buildings. These ideas are just a starting point, and utilities could work with their customers to identify the information that is most useful.

A building owner would avoid the expense of installing new metering hardware and systems to get the data the utility already collects, and the utility’s costs of operating the central software and delivering reports could potentially be recovered by fees paid by the users of such reports.

Several leading utilities today operate programs to explore how commercial customers benefit from functions such as smart meter reports. Pacific Gas and Electric Co. in San Francisco, Commonwealth Edison Co. in Chicago, the New York State Energy Research and Development Authority in New York, and Duke Energy Corp. in North Carolina all have related programs, but much more could be done by many more utilities to learn from these examples.

Of course, this approach would not be right for every building or building owner. But, it would give a vast number of buildings new tools and actionable insights to reduce energy waste.

Commercial buildings often waste energy, but the building operation appears normal until the faults are detected. Innovation in information technology has given us tools that can help operate buildings better. Utilities can be great partners in the endeavor by delivering reports that give their customers intelligence and insights. Utilities need to hear from their commercial customers about this opportunity and the importance of action.

Philip Henderson
Denise Nestor Philip Henderson
Philip Henderson is a senior financial policy specialist with the Center for Market Innovation at the Natural Resources Defense Council, where he works with market participants, utility programs, and government on projects related to energy efficiency in buildings.