Why Does a Level 3 Energy Audit Prove to Be a Good Investment for Properties?

By: Associated Renewable

Published: January 30, 2013

Level 3 energy audits build on the data gathered from the simple walk-through (Level 1)audits and the energy survey & analysis (Level 2) audits, making them the most detailed building analyses in terms of financial evaluation of ECMs, implementation costs, deeper-level attainable savings,  detailed audit reports and higher precision in determining energy savings.

Level 3 energy audits have a better financial return when compared with Level 2 audits because the final out-of-pocket cost to customers is lower with 50% rebates that are only applicable to Level 3 audits. This is one of the prime reasons we recommend a granular Level 3 audit, for which customers receive a deeper-level energy analysis while incurring lower upfront expenses due to incentives.

Engaging in a Level 3 audit requires that you determine whether your property requires and will benefit from higher accuracy and precision of the investment-grade engineering analysis. The following are some statements that can help you evaluate your need for conducting a Level 3 energy audit:

  • Does my building require capital improvements including boiler/ chiller replacements, lighting retrofits, HVAC equipment upgrades and other mechanical or operational changes?
  • Does an energy savings performance contract (ESPC), which involves paying for the upfront costs of energy upgrades through energy savings on my utility bills, sound like a valuable financing option for me?
  • Are the HVAC (heating, ventilation and air conditioning) systems in my building falling out of their intended performance range, resulting in higher energy loss from areas invisible to the untrained eye?
  • Will I benefit from higher technical accuracy and precision in the analysis of my building’s energy consumption profile compared to similar ones in the building stock?
  • Does an investment-grade engineering & financial study (including ROI projections, payback calculations, life-cycle costs analysis, ECMs savings and, implementation costs analysis) provide a sufficient reason to commission a Level 3 audit?
  • Utilities like Con Edison provide incentive payments and equipment rebates to their commercial and industrial customers (Con Edison’s Commercial and Industrial Energy Efficiency Program pays for 50% of the cost of a Level 3 audit up to $67,000). Should I take advantage of these incentives, grants and rebates to significantly lower the cost of my Level 3 energy study?
  • The use energy data loggers and high-grade audit equipment to record precise data (on temperatures, pump and motor operation, lighting levels, switching behavior) results in a highly accurate model of energy usage in the building. Will I benefit from comprehensive technical analyses that use computer-based modelling to determine the energy use profile of my building?


Additional features and benefits of a Level 3 energy audit are summarized below:

Audit Process

Data Logging

Detailed system modeling, including hourly energy usage

Whole-building computer simulation calibrated with field data

Schematic layouts for recommended measures (ECMs)

Investment-grade decision-making support (including financial analysis of ROI, payback, costs & savings)

Audit Report

Engineering & Economic analyses

Accurate vendor pricing for ECMs

Detailed description of recommended measures

Detailed ECMs cost estimates


We recommend a Level 3 audit for many of our customers and it typically identifies between 20% and 40% in annual energy and water savings measures. For each ECM, we provide the dollar amount to be saved, the amount of energy in Kwh (kilowatt hour) or therms or gallons to be saved, the amount each measure will cost and the amount of time it will take for the ECM to pay for itself, in addition to the amount of applicable incentives our grants team can identify. The end report provides realistic and verifiable savings opportunities with regard to baseline operating costs.