Energy cost

Energy cost is the cost of electricity, fuel oil, gasoline, heating oil, natural gas, or other source of energy utilized for the operation of a building. It is a commonly used metric for evaluating building performance, and is often used as a code compliance metric (ASHRAE Standard 90.1 Energy Cost Budget approach and Performance Rating Method approach). Energy cost is an easy to understand metric, but it is important to understand when it is appropriate to use.

Strengths of energy cost metric

Energy cost is an easy to understand metric, and is useful for communicating to building owners since they ultimately receive utility bills for operational cost. Presenting design alternatives in terms of financial savings can be a motivator for building owners to implement efficient design strategies. Additionally, energy cost can be used to calculate other factors used in making financial decisions such as payback, net present value, and life-cycle cost.

Weaknesses of energy cost metric

Energy cost only reflects financial aspects of energy use, not the environmental impacts. Inexpensive energy from greenhouse gas intensive generation sources may make a building less expensive to operate, but does not necessarily mean it is more efficient. Energy costs are also variable based on factors outside of the building such as changes in utility rates, so changes in cost over time may not be based on changes in the building's performance.

Communicating energy cost data

From an energy modeling perspective, it is very important to communicate energy cost information effectively.

Design phase analysis

During any phase of the design, energy costs calculated from building simulations are unlikely to accurately predict actual energy costs when the building is operational. This is due to factors such as:

• Actual weather differs from weather file data
• Occupants use the building differently than occupancy assumptions in the model
• Product substitutions during construction
• Systems not commissioned

It is advised to present design-phase cost data as a cost differential between two or more design options rather than absolute costs. This approach is how cost data is used in code compliance analysis.

Operational buildings

Once a building is operational, utility bills and metered data can be collected for a period of time (usually a minimum of one full year). At this stage, design phase models may be calibrated to align the simulation results with the operational data. Once the model is accurately calibrated, it is more reasonable to present results in terms of absolute energy cost, although weather and occupants will still introduce some uncertainty in future performance.

Calculating energy cost

Energy cost can be calculated as a rough estimate using an average cost per unit of energy, or more accurately using detailed rate structure information. Read more at: Utility rate inputs and calculating energy costs