If you never counted your money, how would you know whether you are losing or saving money? You would not, right? Then, if you never measured your electricity consumption, how would you know whether you are wasting or conserving energy?

I suppose the conclusion is to measure in order to manage. And how does one exactly measure electricity consumption? Thankfully, there are various standards designed and published by international and national institutions in order to ensure accuracy in the field of Measurement & Verification.

Measurement and Verification (M&V) is the process of using measurements to reliably determine actual energy saving created within an individual facility by an energy management program (IPMVP Vol 1, 2007, Section 9). Measurement and verification main objective is to verify energy savings.

In these standardized methods energy usage before and after an intervention is compared and verified. In order to compare before with after, a baseline is set at the beginning of an assessment year, and then the energy reporting is given on the energy used during the assessment year. The energy savings are calculated over this period according to the correct M&V guidelines.

Comparison helps to manage innovation and investments into sustainability and energy efficiency. If energy savings are verified as successful, then further investments become more attractive. In other words, measurement and verification support the financial tools in decision making. Therefore, consistency is most important, this is where the standards guide us and provide us with international credibility. The IPMVP for instance, is widely adopted by national and regional government agencies and by industry organizations to help manage their programs and enhance the credibility of their reported results.

Once businesses are able to report reliably on their energy consumption, there are a number of incentives to reduce energy consumption available from various funds and agencies. SARS introduced a tax incentive for energy efficiency which requires a specific method for the measurement and verification of the project. The South African Income Tax Act of 1962 has offered tax incentives since 2009 using section 12i, the Industrial Policy Project Investment incentive for manufacturing-related projects with a 10% energy demand reduction component. In 2013, the National Treasury of South Africa published section 12L in the Government Gazette 37019, which allows deductions on energy efficiency savings in terms of the Income Tax Act.

It becomes clear that saving electricity and reducing demand may have a significant impact on your financials over and above the usual utility bill. The key however remains the measurement and verification. This is where Terra Firma Academy can be of assistance in teaching your team how to accurately follow national or international standards on measurement & verification. Sign up today, start saving tomorrow!