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Investment Grade Energy Audits

John Herbert

The energy audit is a powerful tool, recognized by many organizations including fortune 500 companies, that offers business owners an opportunity for energy experts to review your operations helping you lower your energy cost, saving money, and giving your business a key competitive advantage.

Additionally lowering fuel consumption lowers your environmental emissions helping you lower your impact on the environment. Businesses connected to traditional power station utilities gain fourfold, effectively reducing their carbon dioxide, particulates, NOX and sulfur emissions.

What is an Investment Grade Energy Audit?

With the increasing interest in p2e2 a brief regarding investment grade energy audits is timely.

Surveys indicate that more than seventy five percent (75%) of buildings are:

  • operating incorrectly
  • have inappropriate maintenance
  • lose money by inefficient energy usage
  • lose 50% of energy through poor design

Coupled with the fact that an increasing proportion of expenditure is spend of fuel business owners are searching for opportunities to lower fuel related spending.

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They are not alone, shareholders and fund managers are also looking for energy smart organizations because they perform better. One investment analyst compared the performance of energy smart organizations, and discovered that the performance of energy smart companies surpassed their peers.

P2E2 solutions provide opportunities to enjoy the benefits of modern energy efficient equipment that lowers energy consumption WITHOUT capital investment, and still keeping a share of the credit from the reduced energy consumption.

For example, let's say a factory has a wishlist of energy conservation measures, including a cogeneration plant, all of which will lower the recurrent expenditure, and providing a key competitive advantage. However, they suffer from insufficient war chest to fund these improvements.

An investor has the necessary capital, earning a pitiful interest rate at the bank.

In essence p2e2 is the process of using investment capital to fund energy improvements, lets say a cogeneration plant for factory, and both share in the resultant energy saved, it is that simple.

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So what is the investment grade energy audit? It is the assessment conducted by the investor to locate and identify the energy management opportunities and setting out the terms of the contract. However and let's be clear here, although the target is lowering energy consumption, the investor requires a good return on investment and operator should be aware that the deal will likely be structured to favour the investor. Why? because the investor is paying for the investment grade audit, and will have an interment knowledge of the installation and possible EMO.

An investment grade energy audit tend to focus more closely on the investment, and financing side of the balance sheet, rather than lowering consumption across the board.


Energy Services COmpanies (ESCO) provide capital investment and services for p2e2 projects. Most of the major automatic control companies also provide an ESCO service. However it must be noted that if you are considering a manufacturing ESCO's - they exclusively chose their own products, and that's fine. But be aware that after the contract is finished, the factory / building owner may find himself left with a single vendor installation, that still requires an on-going relationship.


The contract will set out the specifics of the deal between the building owner and the ESCO. Having a lawyer check the contract is recommended. Is there a different between Kilojoules per sec, Kilocalories per hour, and Watts? Ask the experts, order a Kelcroft review.

Further Information

Kelcroft's expertise drives energy conservation excellence, coupled with our long standing experience in E&M capital works, Kelcroft offers real, not theoretical energy saving opportunities that boost your business.

For further information call Mr John Herbert at our Hong Kong office He has been conducting energy audits for more than fifteen years.

Call Kelcroft today telephone number +(852) 2335 9830, fax: +(852) 2335 9862, or email and start saving money tomorrow.