Over the next couple of months I am planning to write a number of posts on the subject of energy audits. This is driven by the recognition that there is a fundamental problem with energy auditing.
The Problem: Good quality energy audits may appear expensive whilst cheap, poor quality energy audits waste money.
This first post addresses the issue of PRICE vs QUALITY.
In over 20 years’ experience of energy auditing (as an independent auditor and quality reviewer for Carbon Trust) I have seen the good, the bad and the ugly! I also sit on the BSI committee that covers energy auditing, so hopefully I am well placed to comment on the topic.
Whilst price alone is not an indicator of quality, we know that if the price is below a minimum it is unlikely that a high quality, value for money audit will result. That said a high cost audit does not automatically equal high quality.
In simple terms the cost of an audit is determined by:
- The agreed Scope of Work
- The cost of the auditor(s) = Grade of auditor x Time spent
- Travel expenses = Number of site visits x Mode of transport
- Overheads – administration, etc.
Given that a commercial provider needs to make a profit how can they reduce the cost of an audit? Their options are:
- Doing less work
- Reduce time spent on site. Only looking at ‘common’ systems for which there are ‘packaged’ recommendations, avoiding any complex processes
- Automate processes. For reporting use as much templating and boiler plating as possible. Ideally have an application that drafts a report with minimal input data – a little like the advisory reports for DECs! Provide a lot of pages, but with little site specific content.
- Use lower cost auditors
- Experienced, skilled energy auditors are not low cost so use a recently qualified or under qualified person. No age discrimination here – a ‘cheap auditor’ could be fresh from college or someone recently retired or made redundant. The recently retired come with experience – but is it energy audit experience?
- Subsidize the cost
- Loss leader against future work?
In simple terms – do less work with lower cost staff.
It is not rocket science to see that as you reduce the scope of work and the skill of the auditor you reduce the potential benefits of the audit.
In the UK funding of surveys or audits by government since the 1980’s has led to many not placing a realistic value on energy audits. Instead of providing funding the government now sees ESOS as a driver for audits. However, we are now seeing ESOS participants buying on price alone. Anecdotally, I have heard of ratios of 9:1 between low and high bids. This goes to support a concern that I had at the introduction of ESOS. Some organizations will see it only as a compliance issue and look to buy at the lowest costs that ‘complies’.
I recently took part in a professional services marketing workshop and the leader said the following:
“If you make your buying decision on price alone then I do want you as a customer.”
I have to say that I agree.
The next post will look at scoping and specifying energy audits.
In the meantime any questions on energy auditing, you know where to come!