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How to Determine Smart Building Benefits, Costs, ROI

Smart buildingSmart building technology can be expensive, so building owners should look at several areas to achieve the best benefits and highest return on their investment, according to HPAC Engineering.

In smart buildings, energy savings are tied to energy information systems, which are used to store, analyze and display building energy data. The Lawrence Berkeley National Laboratory recently did a study of EIS, examining 28 buildings and nine facility portfolios containing 260 million square feet of space.

Reported energy savings were as high as 35 percent, with median savings of 17 percent for individual buildings and 8 percent for portfolios, or $56,000 annually per individual building and $1.9 million annually per portfolio.

EIS costs varied considerably based on system size and complexity. The median five-year software-procurement cost for the facility portfolios was $150,000, which breaks down to $1,800 per monitored point, or 6 cents per square foot. Researchers calculated an upfront software cost of $250 per point and an annual median software cost of $200 per point.

The most frequently reported benefits of EIS were the abilities to identify efficiency opportunities, track and compare performance, manage demand charges, validate utility billing, measure and verify project-specific savings, and collect information useful in setting energy goals.

Beyond EIS, the “brain” of a smart building is its building automation system, and these systems can be very complex, with potential for problems in software, hardware, networking and user error. The study noted that facility staff need to be trained and retrained to understand and operate a building automation system in order to get the best performance from the technology.

Adequately trained staff are also crucial in the area of analytics. Smart building software can automatically analyze asset data in real time, however this information is worthless without adequately trained people to act on it.

According to a report by Jones Lang LaSalle last year, pressure to manage costs, risks and energy consumption are pushing commercial building owners and investors to explore how smart building technologies can help a company’s increase its bottom line.

In addition, earlier this year Jones Lang LaSalle created a graphic that discredits the top 10 smart building myths.

Photo credit: Smart building via Shutterstock

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5 thoughts on “How to Determine Smart Building Benefits, Costs, ROI

  1. EIS costs varied considerably based on system size and complexity. The median five-year software-procurement cost for the facility portfolios was $150,000, which breaks down to $1,800 per monitored point, or 6 cents per square foot. Researchers calculated an upfront software cost of $250 per point and an annual median software cost of $200 per point.
    Comment = EIS cost also depends upon whose solution you choose. It’s interesting to note the above software cost per point and compare them with what is really available today, for example –
    Assuming a web convergent technology based EIS solution and let’s focus on smart lighting –
    Excluding the web convergent BMS/BAS/BEMS platform from whichever vendor is chosen –
    The price per point, per light fitting of the software to monitor power per fixture is 25 cents!
    Even if you include the cost of the web convergent BMS/BAS/BEMS platform you are adding just 75 cents extra per point or $1.00 per point.

  2. The most frequently reported benefits of EIS were the abilities to identify efficiency opportunities, track and compare performance, manage demand charges, validate utility billing, measure and verify project-specific savings, and collect information useful in setting energy goals.

    Comment = According to building owners, developers, managers and major users the financial benefits from more efficient operations & maintenance can be more than an order of magnitude greater according to their own measured experiences.

  3. Beyond EIS, the “brain” of a smart building is its building automation system, and these systems can be very complex, with potential for problems in software, hardware, networking and user error. The study noted that facility staff need to be trained and retrained to understand and operate a building automation system in order to get the best performance from the technology.
    Comment = This is not entirely true. It depends again upon the solution chosen as to how complex is the solution or how much existing skill, knowledge and experience may be leveraged. It is also dependent upon how widely those skills exist.

  4. Adequately trained staff are also crucial in the area of analytics. Smart building software can automatically analyze asset data in real time, however this information is worthless without adequately trained people to act on it.
    Comment = Couldn’t agree more

  5. According to a report by Jones Lang LaSalle last year, pressure to manage costs, risks and energy consumption are pushing commercial building owners and investors to explore how smart building technologies can help a company’s increase its bottom line.

    Comment = Excellent news!

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