Ensuring Savings and Impact, the Ultimate Goals

Jeff Klein
Jeff Klein

Carbon Lighthouse’s commitment to guarantee revenue and deliver impact over the term of a contract is managed by a dedicated Energy Performance Team. This team is responsible for the ongoing managed energy service, and shares energy performance results on a quarterly and annual basis in terms of dollar savings, energy reductions, and CO2 reductions achieved.

Since our savings results come from the absence of energy usage, determining energy performance is not a straightforward calculation. How do we measure something we did not use?


What data is used during the baseline and evaluation periods?

To determine the performance of an implemented Energy Solution, the Energy Performance Team follows industry standard Measurement & Verification (M&V) practices to quantify energy performance. Our methodology is guided by the International Performance Measurement and Verification Protocol (IPMVP) developed by the Efficiency Valuation Organization (EVO), which began in 1994 under a U.S. Department of Energy initiative.[1].

As explained in the IPMVP, “M&V is the process of using measurement to reliably determine actual savings created within an individual facility by an energy management program,” such as the Carbon Lighthouse energy service. “Savings cannot be directly measured, since they represent the absence of energy use. Instead, savings are determined by comparing measured use before and after implementation of a project, making appropriate adjustments for changes in conditions.”

We refer to the periods before and after implementation of the energy solution as:

  • Before = baseline period
  • After = evaluation period


What conditions are used for the basis of adjustments?

Similar to economic data like unemployment rates, we want to evaluate overall energy performance and not be distracted by short-term anomalies. While economists normalize for inflation rates and seasonality in employment, we normalize for weather and utility rates. While trends in weather and utility escalation rates can be predicted, actual conditions during the evaluation period are unpredictable. We determine energy performance based on a “typical, average, or ‘normal’ set of conditions.” This is referred to as the “fixed conditions basis” in the IPMVP.


What does this mean in our analysis?

  • Weather: We use weather data from the National Oceanic and Atmospheric Administration (NOAA) for the baseline period and evaluation period and normalize energy use based on a typical meteorological year (TMY) provided as TMY3 data by the National Renewable Energy Laboratory (NREL). NREL TMY3 data is the industry standard used for building and solar models, including by the U.S. Department of Energy.[2] Furthermore, we collect weather at the building to capture site-specific conditions.
  • Utility Rates: We use the utility rate schedule for the building at the time of the baseline period along with the utility escalation rate agreed upon in the energy services agreement to determine the utility rate schedule for the evaluation period. The utility escalation rate is determined based on historical utility rates and calculated as a compound annual growth rate.


A combination of system-level key performance parameter measurements, system-level interval meter data, and whole-building or sub-building utility interval meter data may be used. These types and methods of data collection correspond to the IPMVP options A, B, and C for determining savings, respectively.

  • Retrofit Isolation: Key Parameter Measurement
  • Retrofit Isolation: All Parameter Measurement
  • Whole Facility

Our methodology will follow the industry standard M&V practices as they evolve. Given our mission to solve climate change, we are critical about our real impact and take pride in evaluating and improving upon the measured performance of our implemented energy solutions.


Read how how to protect your investment with ‘savings persistence’.



[1] “Concepts and Options for Determining Energy and Water Savings: Volume 1.” International Performance Measurement and Verification Protocol, Efficiency Valuation Organization, January 2012.

[2] “Weather Data Sources.” EnergyPlus, U.S. Department of Energy Building Technologies Office,

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