With tax season upon us, the last thing you probably want to hear is the word “audit.” However, not all audits are created equally, and one type – an energy audit – can actually save you money.
In our work, we have been doing farm energy audits for 25 years. An energy audit analyzes your current energy use and makes specific recommendations for where you can save energy.
Most farms can expect to identify about 10 to 35 percent energy savings through an energy audit. While that probably sounds intriguing, you may be curious to know a little bit more about what those recommendations look like and how useful the information actually is.
Until recently, there was no accepted definition of a farm energy audit. In 2008, the American Society of Agricultural and Biological Engineers (ASABE) created Standard 612: Performing On-Farm Energy Audits. Adoption of this standard created a common definition of an energy audit.
A Type 2 audit looks at all fuels used on the farm and all stationary equipment on the farm. This is the type of audit you can use to access funding through the USDA Natural Resources Conservation Service’s EQIP program as well as Rural Development’s Rural Energy For America Program (REAP), so it is a versatile document that can be used to tap into several different funding sources.
Here are some important components of a farm energy audit with examples taken from an actual 70-cow dairy that recently received an ASABE Type 2 energy audit.
Analysis of current energy use
To understand where you can save energy, an auditor must first know how much you are currently using and where the energy is being used. Your auditor will request your utility bills from the last year to determine your baseline energy use and then analyze that information alongside your equipment specifications and run-time information for that equipment.
Figure 1 is a pie chart from an energy audit showing the breakdown of electricity use on the farm.
From this, it’s clear that milk harvest – that is, the pumping and transport of milk – is the largest energy use on the farm, followed by lighting.
Current versus proposed energy use
The audit will go into further detail with an inventory of the equipment used on the farm. Most energy audits present information in several formats using narrative text, tables and charts to present the information in a way that works best for you.
Pie and bar charts allow you to see at a glance where the opportunities lie. Figure 2 is a bar chart of the annual versus projected energy use for that same farm.
Remember how most of the energy use on this farm was in milk harvest and lighting? There’s good news for this farm; those are also the two areas that have opportunities for energy savings.
Summary of recommendations
Table 1 shows the recommendations for this farm. This information is typically presented right at the beginning of the audit. After all, if you’ve just received a detailed report, you want to be able to go straight to the bottom line that tells you at a glance how much energy you can save.
In this case, we clearly see that the farm can save about $1,700 in annual energy cost savings if all recommendations were installed, with a payback of about five years.
A little further down in the audit, we go into greater detail about those recommendations so the farmer knows exactly what is recommended. Table 2 shows exactly what makes up that milk harvest recommendation.
Note the specific equipment recommendation for an energy-efficient alternative as well as the electricity savings, cost savings and implementation costs that make up each component of this recommendation.
The estimated payback divides the estimated annual cost savings by the implementation cost. This example shows that upgrades to the milking equipment will pay for themselves in 6.6 years.
With an estimated useful life of 15 years, this equipment will pay for itself in energy cost savings long before it will need to be replaced. Is that a good deal for the farm?
Only the dairy farmer can say for sure how this recommendation lines up with other priorities on the farm, other benefits of installing the equipment besides cost savings and the long-term plans of the farm.
However, with an energy audit in hand, this dairy farmer will have the information readily available to make an informed business decision. This information can be given to an equipment dealer to quote a recommendation and can also be used to access financial assistance for implementing the equipment.
The type of recommendation, the energy savings and the payback period can vary widely based on the size of your dairy, the type of equipment already in place and your local energy costs. This means the new equipment your neighbor is putting in might not be the best choice for you.
A customized energy audit can analyze your specific situation and come up with recommendations that are unique to your farm, calculated based on your actual energy costs and equipment use patterns.
Plus, an energy audit also provides resources about the equipment recommended in the report, links to funding sources that can help with the cost of installing a new project, and general energy tips and best practices.
If you are looking to cut energy costs and want to make sure you are investing in the right places, consider the benefits of a customized energy audit to get you on the best path forward. PD
- Engineering Team Lead, CEM
- EnSave Inc.
- Email Kyle Booth