Measurement and Verification (M&V) is a crucial part of energy efficiency project finance, but its high cost, complexity, and lack of transparency have caused many building operators to lose trust. We believe, though, that open source software can make M&V easier, faster, less expensive, and most importantly transparent. If we can fix this weak link, we can open up more energy efficiency projects for financing.
When you first come to energy efficiency finance, the Measurement and Verification (M&V) seems very reasonable: After you’ve invested in efficiency upgrades at a building, you’d measure the energy use, compare it against a baseline model before the upgrades, and calculate the savings. Based on those verified savings, you can determine if the project is successful and allocate payments. And thanks to ASHRAE Guideline 14, the International Performance Measurement Verification Protocol (IPMVP), and the U.S. government’s Federal Energy Management Program’s M&V Guidelines, now in version 4.0, you’d feel comfortable that it would be done fairly and correctly.
Then you’d get to the real world.
Just about everyone in the energy efficiency industry could tell you a few M&V horror stories. They all share the same plot: It was slow, complicated, and expensive. The results were delayed, sometimes by months. When you got them, they seemed highly subjective, even rigged. There’s often a nagging feeling that the project developer or vendor who did the M&V was not playing fair.
In fact, real world M&V is complicated for three reasons:
- It requires data, and lots of it. Gathering all this data in the past has meant going through utility bills or trying to download CSV files manually from data loggers. Needless, both are slow, expensive, and error-prone.
- It requires building complex statistical models based on past energy usage, and then running those models regularly. Believe it or not, this was often done in Excel, which made the models tedious and slow to build and run.
- Energy efficiency project developers want to show the effectiveness of their work by isolating M&V to their project, but building operators would feel better if they saw savings on their overall energy bills.
Because the whole process is so slow and complex, only professional energy efficiency developers such as Energy Services Companies (ESCO’s) have the knowhow and resources to do it. Few building operators could do their own M&V. Unfortunately, this made them suspicious of ESCOs’ M&V results, especially if the ESCOs’ M&V showed energy savings from their retrofits, but the whole building’s energy use was not lower.
Furthermore, because gathering data, building models, and regularly running them costs the same amount of money regardless of the size of project, M&V was impractical for all but very large-scale projects. Even at large U.S. federal government buildings, the recommended M&V costs is 3% to 5% of the energy savings achieved, and the upper threshold is an astounding 10%. (By comparison, standard servicing costs for mortgages are 0.25% to 0.5%, with a healthy profit built-in for the servicer.) As a result, smaller buildings or projects with small capital costs could not afford M&V and are thus shut out of energy-as-a-service funding models.
Since our goal is to open up energy finance for everyone, M&V was the first thing we had to get right. We needed to make M&V both inexpensive and transparent, so that smaller projects are possible, all parties could independently verify the results, and building operators could believe in M&V-based project financing again.
To make this happen, we’ve integrated several key open source components into opentaps:
- Green Button XML: An industry standard for utilities to share data with their customers. This is used to get building-level meter readings quickly and efficiently into opentaps for analysis.
- VOLTTRON: An open source project developed by the US Department of Energy for grid-smart buildings, VOLTTRON can pull data from building systems such as Building Automation Systems (BAS) using standard MODBUS and BACNET protocols.
- OpenEEMeter: An open source project which implements the CalTrack 2.0 standard for modeling metered energy use against weather data.
Together, these tools allow you to get lots of data and build energy usage models much faster and at much lower cost. Furthermore, you no longer have to choose between only looking at the building’s energy use as a whole or the systems inside the building. Instead, we could now verify energy savings with data from both. For example, you could verify that HVAC set points were correctly set throughout the day and compare those to meter-level readings.
This means that M&V could actually bring ESCO’s and building operators together. Instead of arguing over M&V results vs. energy bills, open access to data and technology allows everybody to work on figuring out ways to make the building even more efficient.
We’ve incorporated these components into opentaps SEAS, so you now have an open source platform that could perform M&V easily and inexpensively. This could be run by an ESCO or vendor, but it could also be run by a building operator or installation contractor. Everybody could see the results, check them, and get comfortable with what they’re seeing.
Of course, this is just the beginning. There are many kinds of buildings, with different equipment and different operating schedules. They would require different ways to acquire data and different models of baseline energy use. By making opentaps open source, we hope to make it easy for everybody to build out those data interfaces and models over time. Most importantly, by reducing cost and increasing transparency, we hope that this would make M&V believable again and bring trust back to energy financing models based on it.