Efficient Inefficiencies: The Disparity between Investment and Performance

LEED, Energy Star, Utility Rebates, Market Perception, lowering Operating Costs, increasing Net Operating Income. There are many reasons to invest in Energy Efficiency. For most buildings, this comes in the form of major capital investments for infrastructure improvement. We operate mostly on the assumption that things are expensive because they’re old, and something has happened in recent history to make a newer option better. To be clear, this isn’t entirely wrong. Newer equipment does have the potential to operate more efficiently and improve our bottom line, but how direct is that relationship? Does investment always lead to return?

The chart below was compiled by the Energy Information Association using information from the Commercial Building Energy Consumption Survey (CBECS). CBECS is a survey performed every four years and includes details such as what investments have been made in a building and how it performs from an energy usage standpoint.

Figure 1. Building Performance Defined: the ENERGY STAR National Energy Performance Rating System Bill Von Neida, U.S. Environmental Protection Agency Tom Hicks, U.S. Environmental Protection Agency https://www.energystar.gov/ia/business/tools_resources/aesp.pdf

How to Read this Chart

I promise this chart is valuable, but first, a note on how to interpret it. We can see the top of the chart is divided into four categories: ENERGY Star Offices, CBECS Average, CBECS Upper Quartile, CBECS Lower Quartile. These categories denote a building’s energy performance in terms of Kwh per square foot. Working from right to left, CBECS Lower Quartile are the worst performers, CBECS Upper Quartile are the best performers, and CBECs Average is the middle of the pack. Now, ENERGY Star Offices are special. These are buildings that have received their ENERGY Star designation. To have an energy star designation, a building must be among the best performers and apply to Energy Star program. In this way, ENERGY Star buildings can be thought of as buildings from the CBECS Upper Quartile that made a commitment to track and publish their energy performance.

Within in each category (column) we see percentiles in rows. These rows represent the percentage of buildings in each category that have the feature denoted in that row. For example, if we look at the first row, under “Construction,” “Concrete,” we see that 30 percent of ENERGY Star Building have concrete, 16 percent of CBECS Average buildings have concrete, 10 percent of CBECS Upper Quartile have concrete, and 23 percent of the CBECS Lower Quartile have concrete. One more example, if we want to know what percentage of the CBECS Upper Quartile have VSD’s (Variable Speed Drives), we simply find the intersection of the CBECS Upper Quartile column and the VSD’s row, giving us the percentage at 19 percent.


Let’s start by looking at EMS systems. Energy Management Systems are considered the de facto first step in achieving energy efficiency by many, and are pretty much standard in modern commercial buildings. However, if we look at the CBECS Upper Quartile (our best performers) we see that only 23 percent have EMS systems, while 56 percent of Lower Quartile (our worst performers) have EMS systems. Doesn’t this relationship seem inverted? Shouldn’t our best performers be equipped with the systems that we expect to help them get there? The situation is further blurred by the ENERGY Star offices with 84 percent having EMS systems.

Let’s move down the rows and examine Economizers, VSDs, and Motion Sensors. All of these features that are categorized as “Energy Efficiency” are not positively correlated with the performance of the buildings in which they are installed. Furthermore, we see that the features (and as a result, investment) installed in the ENERGY Star offices is similar to the Lower Quartile (worst performers), but we know based on the definition of ENERGY Star, that these buildings perform like ones from the Upper Quartile (best performers).

Confused? Good, that means you’re not crazy. Long story short, we see evidence here that investing in Energy Efficiency doesn’t guarantee performance (Upper CBECS vs. Lower CBECS). However, we also see that you can invest in Energy Efficiency and become an ENERGY Star building.

Don’t take my word for it

I really wish I could take credit for seeing this myself, but I owe this article to the following quote, taken from the same report as the table above:

“This paradox – the apparent similarity of efficient equipment between the lowest and highest performing buildings – challenges a longstanding misconception that building efficiency can be defined by the presence of efficient equipment.” The report goes on to say, “… problems with energy efficient equipment is frequently a primary source of energy inefficiency.”

What does this all boil down to? What are we looking at here? In the end, this all adds up to a vicious cycle where we make investments in energy efficient equipment, but we don’t take the necessary steps to ensure that we achieve our expected return in the form of performance improvements.

At Datakwip, we call this Performance Drift, and it is one of the key enemies that we try to eliminate. Using a combination of machine learning algorithms, rules, and alerts, we monitor all the equipment in a given building and ensure that it performs to the baselines needed to ensure building owners achieve the return on investment they expect. Visit us at datakwip.com, or email us at info@datakwip.com to learn more.