Measurement and Verification (M&V)

Measurement and Verification (M&V) is the term given to the process for quantifying savings delivered by an Energy Conservation Measure (ECM), as well as the sub-sector of the energy industry involved with this practice. There are four major M&V activities in the federal energy savings performance contract (ESPC) process. They include:

  • Determining baselines and estimated savings
  • Developing the M&V plan
  • Developing the post-installation M&V report, which is part of conducting post-installation M&V activities
  • Performing annual M&V, which is part of conducting annual M&V activities 

M&V Activities

  • Determining Baselines and Estimated Savings
    Baselines are compared to post-installation energy use to determine savings. Typically, the energy service company (ESCO) defines the baselines as part of the investment-grade audit (IGA). Baseline physical conditions (such as equipment inventory and conditions, occupancy, nameplate data, energy consumption rate and control strategies) are characterized through IGA surveys, inspections, spot measurements and short-term metering activities.
    Baseline conditions are established to calculate savings by comparing the baseline energy use to the post-installation energy use. Baseline data are also used to account for any changes that may occur during the performance period that could require baseline adjustments. The baseline data are included in the ESCO’s proposal. SEA ensures that the baseline has been properly defined.

    In almost all cases, after the energy conservation measure (ECM) has been installed, it is impossible to re-create the baseline. Therefore, it is very important to properly define and document the baseline conditions. Deciding what needs to be monitored, and for how long, depends on factors such as the complexity of the measure and the stability of the baseline, including the variability of equipment loads and operating hours, as well as other variables that affect the load.
  • Develop the Measurement and Verification Plan
    The M&V plan is the single most important item in an energy savings “guarantee.” SEA will work with the energy service company before starting the investment-grade audit, because the M&V methods chosen will significantly affect how the baseline is defined, which will determine which activities are conducted during the IGA. The project-specific M&V plan includes project-wide items as well as details for each ECM, including:

    • Details of baseline conditions and data collected
    • Documentation of all assumptions and sources of data
    • What will be verified
    • Who will conduct the M&V activities?
    • Schedule for all M&V activities
    • Details of engineering analysis performed
    • How energy savings will be calculated
    • Utility rates and how they will be used to calculate cost savings
    • Details of operations and maintenance (O&M) cost savings claimed
    • Defined O&M reporting responsibilities
    • Defined content and format of all M&V reports
    • How and why the baseline may be adjusted
  • Conduct Post-installation measurement and Verification Activities
    Post-installation verification is conducted by the ESCO and SEA to ensure that proper equipment and systems were installed, are operating correctly, and have the potential to generate the predicted savings. The verification is accomplished through commissioning and M&V activities. Post-installation M&V activities specified in the M&V plan may include surveys, inspections, spot measurements and short-term metering. The results of the M&V activities are presented in a Post-Installation Report outlined delivered by the ESCO before final project acceptance
  • Conduct Annual Measurement and Verification Activities during the Performance Period
    At least annually, the ESCO and the federal agency verify the installed equipment and systems have been properly maintained, continue to operate correctly and continue to have the potential to generate the predicted savings. Although an Annual M&V Report from the ESCO is required to substantiate savings guarantees, more frequent verification activities can be appropriate. SEA ensures the M&V monitoring and reporting systems are working properly, allowing us to fine-tune measures throughout the year based on operational feedback and avoids surprises at the end of the year from facility owners.