Energy audits have long been a part of property management best practices, but their role has shifted dramatically in response to regulatory changes, aging infrastructure, and new financial and operational priorities impacting real estate owners and investors today. Too often, audits miss the mark by delivering generic recommendations. Tailoring the audit scope to each property’s unique characteristics and your organization’s investment strategy is key to driving real value. When done right, energy audits serve as critical tools for compliance, risk assessment, capital planning, sustainability strategies, and more. Understanding how to best leverage energy audits based on your property’s unique features and organizational goals can result in positive financial and climate outcomes at the asset level and portfolio-wide. This guide outlines the purpose, process, and benefits of energy audits, helping you make smarter, future-ready investment decisions.
What is an Energy Audit?
Energy audits are comprehensive assessments of a building’s energy and water use that evaluate the efficiency of equipment, building systems, and operations. They involve systematic analysis of utility consumption patterns, equipment performance, and building envelope characteristics to identify inefficiencies and optimization opportunities. As a best practice, these assessments should include water use, though not all scopes do. Energy audits provide actionable recommendations to improve energy and water performance, identify opportunities to decrease operating expenses, reduce emissions, and increase asset value. They serve as critical decision-making tools for property owners and managers by quantifying potential savings, prioritizing capital improvements, and establishing performance benchmarks against industry standards and regulatory requirements.
Why Energy Audits Are More Important Than Ever
Building Performance Standards (BPS) and regulatory requirements are expanding across jurisdictions, making energy audits increasingly essential. Property owners and managers who proactively conduct audits can mitigate risk, ensure compliance, and uncover cost-saving opportunities.
Beyond compliance, energy audits offer:
- Operational efficiency – Optimize equipment and systems to reduce energy consumption, lower maintenance costs, and improve tenant comfort. “
- Regulatory compliance – Stay ahead of evolving performance mandates and energy disclosure laws to avoid fines and penalties.
- Risk mitigation – Identify infrastructure vulnerabilities before they impact NOI or asset performance.
- Capital planning insights – Prioritize energy-efficient investments that align with long-term asset strategies.
How Are Energy Audits Conducted?
Energy audits typically follow a three-step process:
Step 1: Data Collection & Review
- Gather utility data (electricity, gas, water) for landlord and tenant systems.
- Review building documentation, including equipment specs and maintenance records.
- Conduct interviews with facility teams to assess current practices.
- Perform an on-site (or desktop) review of major building systems (HVAC, lighting, water, controls, and envelope).
Step 2: Analysis & Solution Development
- Model the energy profile to identify conservation opportunities.
- Align recommendations with the building’s operational needs.
- Develop a prioritized list of energy efficiency measures focused on cost savings and emissions reductions.
- Assess compliance with local regulations and potential financial incentives.
Step 3: Report & Action Plan
- Provide a detailed financial analysis, including capex, savings, and ROI projections.
- Identify available rebates, tax credits, and incentives to reduce implementation costs.
- Prioritize projects with clear cost-benefit analyses.
- Outline an actionable implementation plan, including budgeting and regulatory considerations.
Choosing the Right Energy Audit Scope
Energy audits can range from basic assessments to comprehensive technical analyses, each serving different strategic objectives. The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) formally defines three standard levels of audits (L1, L2, and L3), creating a progressive framework of increasing depth and detail. However, at GreenGen, we’ve identified an additional intermediate level—Level 1.5—that often best addresses our clients’ specific needs by balancing thorough analysis with practical implementation. This “Actionable Energy Survey” bridges the gap between preliminary assessments and more resource-intensive evaluations, delivering targeted insights with streamlined efficiency. Choosing the right level depends on asset complexity, compliance requirements, and investment goals. Here’s a breakdown:
ASHRAE Level 1: Basic review identifying no-cost/low-cost efficiency improvements.
Level 1.5: This is GreenGen’s standard scope and targets high-impact systems, delivering prioritized solutions with financial analysis.
ASHRAE Level 2: A detailed site investigation providing technical and financial analysis of recommended measures.
ASHRAE Level 3: An investment-grade audit and analysis supporting large-scale capital investments with advanced modeling.
Additional Evaluations to Consider
Energy audits can be paired with additional assessments to provide a more comprehensive understanding of building performance. Common add-ons include:
- Regulatory Risk Review – Evaluate compliance with BPS and energy disclosure laws.
- Climate Risk & Resilience Review – Assess building vulnerabilities to climate-related risks.
- Net Zero Pathway Analysis – Develop a roadmap for achieving net zero emissions.
- Building Certification Gap Analysis – Compare current performance against certifications like LEED or BREEAM.
- Electrification Feasibility Study – Assess building readiness for electrification and grid decarbonization.
Costs & Timelines for Energy Audits
Energy audit costs vary based on property size, complexity, and scope. As a general guideline, an ASHRAE Level 2 audit typically costs between $0.10 and $0.15 per square foot. Larger, simpler buildings tend to fall on the lower end of the pricing spectrum, while complex assets require more in-depth analysis and higher costs.
Timeframes also vary but generally follow this schedule:
- Desktop audits – Delivered within a few weeks.
- On-site assessments – Completed within 1-2 months.
How to Maximize the Value of Your Energy Audit
Many property owners complete energy audits to meet compliance requirements, but the true value lies in leveraging audits as strategic planning tools. A well-executed energy audit helps real estate professionals optimize building performance, reduce risk, and unlock long-term asset value.
For a portfolio-wide approach, consider partnering with an energy solutions provider to develop customized strategies tailored to your specific asset mix and investment goals.
Take Action Today
Energy audits are more than just compliance checkboxes—they are powerful tools for operational efficiency, cost savings, and asset value growth. Whether you’re preparing for regulatory changes, seeking sustainability certification, or simply looking to lower expenses, an energy audit is the first step toward smarter, more profitable real estate management.
Need expert guidance? GreenGen helps real estate owners and investors translate audit findings into customized, investor-aligned strategies – tailored to your asset types, regulatory landscape, and long-term financial goals.
Contact us to get started: