A commercial energy audit is a detailed analysis of a commercial building's energy usage patterns to identify areas of energy waste or excess usage and suggest upgrades to improve energy efficiency and minimize operating costs.

We offer energy audits and analysis, ranging from preliminary walkthrough audits to detailed investment-grade energy audits, which identify energy conservation measures and quantify energy and cost savings. We base our levels of auditing and analysis on the recommended practices of the American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE).

The time it takes to complete commercial energy audits ranges from a few hours and weeks, depending on factors like

• The size of your building or facility
• The service you choose to conduct the audit
• The level of detail you require for the report
• Overall energy consumption and complexity of the unit
• Ease of accessibility to your building and energy systems

Manual auditing methods typically take longer as they involve physical measurements and visual inspections, which could be very time and resource intensive depending on the size and complexity of your portfolio.

The first step in realizing valuable energy savings is to contract a reputable consultancy to perform an energy audit. We start with an Energy Usage Index (EUI) analysis, from which the magnitude of available energy savings can be estimated. Then, an in-depth energy audit can commence identifying all the potential energy conservation measures (ECM) for your facility. The three ASHRA energy audit levels are summarized below:

Building Energy Modeling (BEM) is the use of computer-based simulation software to analyze a building's energy consumption and energy-using systems. It requires an energy modeler to input data to create a mathematical model of the building which is then analyzed using equations based on thermodynamics and building science. The results of the simulation are reported for annual performance and include space cooling and heating loads, energy costs and other performance-related parameters. BEM is useful for comparing energy-efficiency options, optimizing operation, exploring retrofit opportunities, and includes whole-building simulation as well as component analysis utilizing specialized software tools.

Building Energy Modeling (BEM) supports an Integrated Design Process and provides significant benefits to both new construction and retrofit projects. BEM helps make strategic tradeoffs between upfront project costs and annual building energy costs. It can also be used to check and inform operations for existing buildings. By comparing it with actual performance, owners can identify performance deficiencies and resolve inconsistencies to ensure everything is working correctly.

• Reduced First Costs
• Reduced Operating Costs
• Improved Occupant Satisfaction

BEM is increasingly used in building efficiency projects to improve building performance, support high-performance building design, and demonstrate performance claims. It can help achieve different modeling objectives and is categorized as modeling to compare, comply, or predict. Understanding the differences can help define the modeling scope.

• LEED certification (EAc1) Adhere to LEED Building Design + Construction (BD+C) requirements for Energy & Atmosphere, Credit 1 - Optimize Energy Performance to determine and document points achieved
• Energy code compliance Demonstrate compliance with the commercial building energy code
• C-PACE energy assessment Evaluate the impact of individual energy efficiency measures (EEMs) affecting the building design
• Utility incentives
• 179D tax deduction Under Section 179D of the US tax code, owners of commercial buildings or primary designers have the chance to claim a tax deduction for properties that are created energy-efficiently.
• Energy Star SEDI a report that provides an overview of your design metrics, including the predicted ENERGY STAR score for a building that is yet to be constructed. It is also used for Designed to Earn the ENERGY STAR applications.
• Measurement & Verification Develop a calibrated model representing the existing building to establish baseline conditions to support a Measurement & Verification approach

Reducing energy costs through energy efficiency and demand response programs is good for both Federal facilities and utilities. Utilities benefit from reducing energy consumption demand at peak times because there is less need to add additional capacity through costly construction projects. Also, as more utilities are faced with competition, responding to customer requests with energy service programs increases their chances of retaining large accounts.

Programs/Agenda 2 Prescriptive Gas Programs

• Rebates for HVAC equipment for residential and commercial customers ranging from $50 - $1,500+. C&I Custom Gas Program
• Rebates up to $100,000 for comprehensive energy efficiency projects. Electric Rebates
• Prescriptive and custom rebates for residential and commercial customers. NBA, GET Gas & Sales Information
• Promote contractor partnerships and expansion of gas service. Inflation Reduction Act
• New federal tax credits available for a variety of HVAC equipment

UGI Gas Incentive Programs

• 5-year program running through September 30, 2024
• Applications updated every year on October 1
• New program will be designed and filed later this year

Commercial & Industrial Custom Program

• Incentives to help customers reduce electricity use through more efficient equipment
• Pays $.08/KWh saved annually for small business customers and $.05/KWh for large business customers, up to $100,000
• Sample projects include:
  
  • Lighting retrofits
  • Efficient new construction
  • HVAC, VSD and/or process equipment upgrades
• Requires pre-approval

New Business Activation (NBA) Program

• Benefits
  
  • Activate customer meter at time of natural gas conversion equipment install
  • Listed as a trusted resource on UGI Online Contractor Locator
• Participation
  
  • Contractors will need to refresh documentation and training periodically (currently every three years)
  • Steps include completing Information Form, Acknowledgement Form and providing a Certificate of Commercial Liability listing UGI Utilities as an additional insured
  • Training is online, self-guided module (takes approximately 45 minutes)
    
    • Each employee who will be operating the convenience valve on the customer fuel line needs to complete the training using their own unique email address

Growth Extension Tariff (GET) Gas Program

• Benefits
  
  • Provide natural gas service to areas that are unserved or underserved
  • GET Gas customers can opt for a monthly surcharge over a 10-year period instead of paying for the gas main extension cost up-front
    
    • Commercial GET Gas customers pay a $20.03 monthly fixed charge + $1.87 per Mcf for all usage OR a custom one-time up-front payment
• Participation
  
  • UGI is selective in which communities it identifies for this program, so it is not offered in all areas that UGI serves

Inflation Reduction Act (IRA) Tax Credits

• Inflation Reduction Act (IRA) passed in 2022
• Tax credits primarily for residential measures installed between January 1, 2023 and December 31, 2032
• Credit for most gas-powered HVAC measures is 30% of cost capped at $600 per measure, with an overall cap of $1,200 for multiple measures
• Separate 30% credit for electric heat pumps and biomass capped at $2,000, creating an overall maximum of $3,200

The Energy Policy Act of 2005 created a tax deduction for energy efficient buildings found in Section 179D of the Federal Tax Code. Section 179D provides a tax deduction for energy efficiency improvements to commercial buildings. A building may qualify for a tax deduction under Section 179D for as much as $5.00 per square foot. An energy efficient envelope, heating, ventilating, and air conditioning (HVAC) system, or lighting system can qualify for the 179D tax deduction. Energy simulations are required to show compliance with the energy and power cost savings requirements.

Ideal candidates for EPAct deductions are newly constructed buildings and renovation projects with at least 30,000 square feet. The following chart shows some examples of the 179D deduction amount you might expect to receive based on building size.

There are two groups of candidates eligible to claim the 179D tax deduction:

• Architects, engineers, ESCOs, and designers of energy efficient municipal building projects
• Private owners of energy efficient commercial properties

The 179D deduction is calculated based on the energy efficiency of the commercial building, as compared to an ASHRAE 90.1-2007 baseline building. This baseline will be in place through tax year 2026. For new buildings and renovations placed into service in tax year 2023 and beyond, there is only one viable compliance pathway to qualify for 179D and that is via a whole building energy model.

Beginning in 2023, the 179D deduction ranges from $0.50/sf to $1.00/sf. The amount of the deduction is directly related to the energy savings predicted in the energy model analysis. This is a sliding scale from 25% energy savings to 50% energy savings correlating to the $0.50/sf minimum and $1.00/sf maximum. However, if the project meets the prevailing wage and apprenticeship requirements outlined in the Inflation Reduction Act or construction can be shown to have begun prior to January 29, 2003, then there is a 5x multiplier increasing the deduction range to $2.50/sf minimum and $5.00/sf maximum.

For tax years 2022 and earlier, there are three compliance pathways to qualify for the 179D federal tax deduction:

• Whole building qualification with 50% energy and power cost savings shown through energy modeling.
• Partial qualification for envelope, HVAC, and lighting with energy and power cost savings shown through energy modeling with threshold options (see chart below).
• Partial qualification for lighting through the interim lighting rule based on reductions in installed lighting power.

A qualified individual is required to perform a modeling analysis on the building, conduct a site visit, and provide a certificate of compliance to the tax payer. According to the IRS, a qualified individual is (1) not related to the taxpayer within the meaning of Section 45(e)(4), (2) is an engineer or contractor that is properly licensed as a professional engineer or contractor, and (3) has represented in writing to the taxpayer that he has the requisite qualifications. In other words, an independent third party who meets the above criteria is required to perform the study.

• Step 1: Preparation The team works to aggregate all documentation for a building (blueprints, plans, and specifications). After reviewing the documents, they schedule a site visit with the plant manager.
• Step 2: Site Visit The goal of the site visit is to understand how the building operates as a system—specifically, the mechanicals, heat and air conditioning, hot water, ventilation, interior lighting, and building envelope. The team works to document each facet of the building so they can pass the data to our energy modelers.
• Step 3: Energy Modeling Our energy modelers use AutoCAD and Department of Energy and IRS-approved software to compare the building model to a reference model and determine if the building has 25% or greater energy efficiency than the reference model (which is required to qualify for the deduction).
• Step 4: Certification Our Professional Engineers provide a certificate of compliance. The certificate of compliance is then attached to Form 3115 and submitted to the IRS, where an adjustment is made to reflect the deduction. A report is provided to the owner for backup documentation for the year they claim the tax deduction, which will detail the following information:
  
  1. Property overview
  2. Summary of allowable deduction
  3. Summary of energy efficient systems installed
  4. Energy model inputs
  5. Energy model results
  6. Energy cost savings calculations
  7. Field inspection summary
  8. Certificate of Compliance
  9. Allocation Letter (for non-profit, governmental agencies, etc. if applicable)