Benchmarking 

to Save Energy

Protect Our Environment

Through Energy Efficiency
 

•	 In commercial real estate, decreasing energy costs by 30 percent is equivalent to increasing net

operating income by 4 percent.

•	 In the healthcare industry, each dollar that a hospital saves in energy costs is comparable to

generating new revenues of $20.

•	 In the supermarket retail industry, a 10 percent reduction in energy costs is equivalent to

increasing sales per square foot by $70.

Realizing these savings can be catalyzed through benchmarking.

Benchmarking is necessary for effective energy management. Through benchmarking, the key

metrics for assessing performance are identified, baselines are established, and goals are set.

This process helps to identify the key drivers of energy use and provides an important diagnostic

tool for improving performance.

By evaluating trends and variability in energy use, benchmarking can improve management

decisions on investments in energy-related projects. Developing a historical perspective on

current and past energy use provides a context for those decisions. Benchmarking against the

industry provides key insights into the competitive use of energy.

Benchmarking demonstrates the value of an energy program and prospects for additional

savings. It enables an organization to understand the opportunities lost by remaining average in

energy performance—and the benefits of progressing beyond the average.

Benchmarking energy performance enables the energy manager to identify best practices

that can be replicated. It establishes reference points for measuring and rewarding good

performance. It identifies high-performing facilities for recognition and prioritizes poor

performing facilities for immediate improvement. At certain performance benchmarks—

milestones—an organization becomes eligible for recognition from ENERGY STAR.

SUCCESSFUL BENCHMARKING

Successful benchmarking begins with upfront decisions on the goals, scope, and metrics that

will support energy management activities and objectives. Determining the options that are

available, such as using existing tools, is necessary.

Conducting benchmarking involves uncovering the key drivers of energy use and adjusting or

“normalizing” the metrics used to compare energy use. At a facility, for example, the data can

be normalized for weather, production levels, or product characteristics that affect energy use. 

Normalizing data ensures the meaningful comparison and analysis of data and can be done

either through simple or sophisticated statistical techniques. Normalizing creates a level playing

field that avoids comparing apples and oranges.

Evaluating and acting on benchmarking results is as important as gauging energy performance.

Successful benchmarking also requires testing methods and approaches in order to establish a

system that can be used to drive continuous improvement.

Benchmarking for Success

Businesses are reducing their energy costs by 10, 20, and 30 percent through effective energy

management practices that involve assessing energy performance, setting energy-savings goals,

and regularly evaluating progress. Facility- or building-level energy performance benchmarking

is an integral part. It provides the reference points necessary for gauging the effectiveness of

energy management practices and management for continuous improvement.

The U.S. Environmental Protection Agency’s (EPA) ENERGY STAR® program provides guidance

and benchmarking tools to help organizations successfully save energy. These resources enable

energy managers to determine the energy efficiency of their operations and make informed

management and investment decisions.

Demand for energy performance benchmarking is growing. The number of commercial,

institutional, and industrial facilities benchmarked using EPA’s tools increased by 50 percent in

the past two years. Many of these facilities have earned the ENERGY STAR for their superior

performance—with the result that they are using 35 percent less energy than the average,

while providing the same or better services.

Why Benchmark?

Benchmarking informs organizations about how they use energy, where they use it, and what

drives their energy use. It is a key step in identifying opportunities to increase profitability by

lowering energy and operating costs. For example:
0

30

60

90

120

150

Assessing Performance

Steps:

a Analyze data needs

a Collect energy use data

a Normalize energy use by

controlling for external factors,

such as weather

a Test benchmarking process

to see how well it predicts

performance

a ENERGY STAR Tools:

Portfolio Manager, Industrial

Energy Performance Indicators

Benefits:

a Improves understanding of

energy consumption patterns

and key drivers

a Quantifies performance of

buildings and plants relative to

each other

a Evaluates the organization’s

position relative to the rest of

the market

Key steps and Benefits of Benchmarking 

Evaluating Results

Steps:

a Analyze the data for measuring

current position relative to

benchmarks

a Continuously reassess the

benchmarking process

a ENERGY STAR Tools: EPA’s

National Energy Performance

Ratings, ENERGY STAR Recognition

Benefits:

a Provides tools to diagnose

problems

a Pinpoints need for improvement

(by internal and/or external

comparisons)

a Identifies what drives superior

performance and thus a target to

shoot for

a Creates basis for internal and

external recognition

a Improves the organization’s bottom

line by ensuring best return on

investments

Supporting Energy Management

Steps:

a Determine the objectives for benchmarking

a Define the scope (entire organization, single

facility, or individual equipment)

a Identify measures of energy intensity, such

as Btu per unit of product

aEstablish a baseline to measure progress

a Engage senior managers and other partners

a Examine options for benchmarking

a ENERGY STAR Tools: Guidelines for

Energy Management

Benefits:

a Initiates continuous improvement in

corporate energy performance

a Facilitates ranking facilities to prioritize

capital investments

a Ensuresfacilities or buildings are quantitatively

compared on a level playing field

a Produces cooperation

among key players to

drive change


Benchmarking Tools

ENERGY STAR helps energy managers and organizations achieve their energy management goals

through a suite of easy-to-use, yet sophisticated, software tools and technical guidance. 

Portfolio Manager is a free online software tool for tracking energy and water use, and rating

the energy performance of selected building types. The tool enables users to:

•	 Track multiple energy and water meters;

•	 Benchmark facilities relative to past performance;

•	 View percent improvement in weather-normalized source energy;

•	 Monitor energy and water costs;

•	 Verify building energy performance; and

•	 Determine energy performance ratings.

For many building types, Portfolio Manager can provide an EPA energy performance rating.

EPA’s national energy performance ratings are derived from U.S. energy and facility data, and

account for the impact of weather variations and key physical and operating characteristics of

each building. Ratings are provided on a scale of 1 to 100.

Energy performance ratings are a critical management tool for evaluating how efficiently a

building is using energy compared to similar buildings nationwide.

Buildings with superior performance are eligible to earn EPA recognition. The ENERGY STAR

label is awarded for facilities achieving the top 25 percent of performance ratings nationally,

without compromising comfort or services. 

Energy Performance Indicators (EPIs) are industry-specific benchmarking tools that

enable energy managers and corporate executives to evaluate the energy efficiency of their

manufacturing plants relative to similar facilities. EPIs are derived from facility-level production

and energy data. The tool normalizes for key factors that drive energy use, including plant

utilization, weather, product mix, and facility and product characteristics. EPIs provide key

performance metrics and EPA energy performance ratings on a scale of 1 to 100.

EPIs are a critical management tool for evaluating how efficiently a plant is using energy

compared to the entire sector.

Plants with superior performance are eligible to earn EPA recognition. The ENERGY STAR label is

awarded for those that achieve the top 25 percent of performance ratings nationally and satisfy

specific compliance criteria.

Benchmarking Guidance provided by ENERGY STAR helps energy managers develop

benchmarks for facilities where EPA does not provide them. EPA’s technical guidance helps with

planning, developing metrics, normalizing data, and using the results. The guidance is accessed

through ENERGY STAR’s online Guidelines for Energy Management.

Successful benchmarking programs are tailored to the structure and culture of each specific

organization. Although a single approach will not address the needs of every organization, all

can benefit by implementing a benchmarking process.

For More Information

Participation in ENERGY STAR presents an opportunity for an organization to benchmark itself

against peers, reduce costs, improve energy efficiency and environmental performance, and gain

recognition for its voluntary energy efficiency accomplishments.

For detailed information on establishing a benchmarking program to achieve world-class

performance, see:

ENERGY STAR Guidelines for Energy ManagementBenchmarking Section: www.energystar.gov/index.cfm?c=assess_performance.benchmark	

Portfolio Manager: www.energystar.gov/benchmark

Energy Performance Indicators: www.energystar.gov/epis
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