News Article
November 29, 2011

Trust but Verify – M&V: The Key to Monetizing Energy Efficiency Improvements

Measurement and verification of energy savings projects is drawing increasing attention among private- and public-sector decision-makers alike, Measurement and verification (M&V) is the process of quantifying a reduction in energy use, peak demand, greenhouse gas emissions, or some other quantity, usually resulting from a program or project. M&V is unique to activities that measure a reduction in consumption, making it more complex than other kinds of energy measurement. For example, the output of a solar photovoltaic array can be directly metered to obtain a clean and indisputable report of total kilowatt-hours generated and average kilowatts delivered. In contrast, an energy efficiency project depends on measuring both the metered usage and the energy that would have been used in the absence of the project. The need to estimate “business-as-usual” consumption presents one of the biggest challenges for M&V.

This illustration shows the basic concept behind all types of M&V – a comparison between the actual consumption and the expected consumption if no changes had been made.



Concept of Measurement and Verification

M&V is important at many levels, from nations’ attempts to reduce carbon intensity, to the retrofit of efficient motors or lighting fixtures. But various stakeholders define M&V differently. For example, in the international climate policy world, Measurement, Reporting and Verification has a slightly different and unique meaning that goes beyond M&V in the energy efficiency space. In all cases, the challenge is to produce a meaningful assessment of the savings on which all parties can agree. At the societal level, transparent and accurate M&V is necessary for evaluating and justifying policy and public expenditures. For individual projects and buildings, M&V serves as a virtual meter that allows energy reductions to be treated like generation in the marketplace. While the basic principle of M&V holds for many levels, the specifics – set of stakeholders, practical limitations of the measurement, and the appropriate methodology – vary significantly depending on the application. The accompanying diagram lays out a range of M&V applications in use today, and each item shown is explained below.



Range of M&V Applications in Use Today


Commercial Building Energy Consumption Survey (CBEC)

For the past 30 years, the U.S. Energy Information Administration has conducted a periodic survey of energy use in commercial buildings: CBECS. Relying on a statistical sampling, CBECS examines a set of buildings in detail and scales the results to represent the entire population of commercial buildings. In this way, policy-makers and advocates can measure and verify societal shifts in the way energy is used over long periods of time. Recently, energy consumption surveys have been applied in India and promoted for other countries through a committee of the International Energy Agency.


Policy Impact Studies

A common approach in the policy realm is to commission an independent review of a particular policy to assess its effectiveness. In the case of carbon reductions, this M&V strategy could entail periodic greenhouse gas inventories as well as auditing of major mitigation actions. An example of this type of evaluation is the book by Weyant compiling analyses of the Kyoto protocol for global greenhouse gas reductions.



Nationally Appropriate Mitigation Actions (NAMAs) are emerging as an important component of international negotiations on climate change. As each country develops a portfolio of actions to meet its targets, the rest of the world will require the promised reductions to be delivered and transparently reported. To this end, a Measurement, Reporting and Verification plan is crucial to any NAMA. A recent report by the Pew Center explores the subtleties of MRV.


Utility/State Program EM&V

With energy efficiency playing a growing role in policy objectives over the last several decades, utilities and government agencies find themselves responsible for allocating a budget devoted to energy savings. Evaluation, Measurement and Verification (EM&V) of energy savings is crucial to ensure good stewardship over ratepayer and taxpayer funds. However, with the diversity of approaches being employed by utility and government programs, EM&V approaches must be flexible, ranging from auditing to ensure the proper installation of lamps and ballasts to behavioral economics research to gauge the impact of energy information on aggregate energy consumption. A paper from the California Public Utilities Commission addresses several common approaches to EM&V for energy efficiency programs.



Standardized approaches for measuring and verifying savings can facilitate contractual agreements between providers of energy efficiency savings and their customers. In addition, standards serve as a foundation for utility programs and other aggregations of projects. For M&V, the International Performance Measurement & Verification Protocol fulfills this function, providing four basic M&V options for various applications. The protocol has grown in popularity and is now commonly used for energy efficiency and other projects all over the world. IPMVP is supported by the Efficiency Valuation Organization. The four options for M&V outlined in the protocol depend on the scope of the project (single piece of equipment or whole building), predictability of savings (climate sensitivity, operational factors) and the availability of data.


IPMVP Option



Option A

Isolated measure, single parameter

Replacing T12 lamps and magnetic ballasts with T8s and electronic ballasts. Savings is the number of lamps and ballasts installed times the known savings per installation.

Option B

Isolated measure, all parameters

Replacing an old chiller with an efficient one to serve the same cooling load. Meter the electricity used by the chillers before and after the retrofit and subtract to find savings.

Option C

Whole building

Installing a bundle of energy efficiency improvements to the building envelope, HVAC system and lighting. Savings is the difference between utility bills before and after retrofit.

Option D

Comparison with model

Incorporating energy efficiency into the design of a new building. Savings is the difference between modeled or actual building energy use and the energy model of a comparable building built to code.

The full IPMVP standard is available from EVO, with supporting materials and analysis provided through Lawrence Berkeley National Lab. A comparable reference is ASHRAE Guideline 14, outlining minimum standards for M&V in projects that reduce energy, demand, carbon and other quantities.


FEMP Guidelines

Similar to the IPMVP standard, the Federal Energy Management Program (FEMP) has provided U.S. Government decision-makers with an approach to measuring and verifying the savings of energy, water, and other efficiency projects. These guidelines are a backbone to the successful Energy Savings Performance Contracts program for retrofits of government facilities. The guidelines and a set of supporting materials are publicly available through FEMP.


Smart Meter and Behavioral M&V

Utilities around the developed world are rolling out advanced meters and improving the resolution of customer energy data, creating a new and rapidly growing repository of information about how energy is used. Meanwhile, a host of new technologies are being developed by small and large companies to harness this new data source as a driver for greater efficiency. One promising trend is the direct impact of providing consumers with better energy information, either through a real-time monitoring system or simply by providing monthly reports with the context of comparisons to neighbors and peers.


Day-Ahead Demand Response

Many utilities and electricity market operators now offer demand response programs in which customers can reduce their consumption during peak periods in exchange for payments from the grid. While this concept is a promising way to optimize existing assets, reduce costs, and increase reliability, demand response also presents an M&V challenge because it encompasses financial transactions based on a reduction of electricity. Program administrators have created standard approaches and algorithms for calculating savings, typically applying electric meter data from the days leading up to a demand response event to generate a baseline profile from which the savings are derived. In the U.S., a voluntary coalition of stakeholders has begun a process of developing standards for demand response M&V. The Federal Energy Regulatory Commission has recently endorsed this effort and will continue to drive toward standard approaches that will support more demand response participation, both in the U.S. and internationally.


Ancillary Services Demand Response

As communication and control technology increases across the grid, customers are able to deliver load reductions on faster timescales and with short notification. The electric system of the future could see near-real-time adjustments in millions of plants, buildings and homes that together act not only as a relief during overburdened periods, but also as an intelligent response to emergencies (avoiding blackouts and brownouts) and real-time load balancing capacity (frequency regulation, high power quality). To be an effective part of grid operations, demand-side participants must be enabled with real-time M&V. Just like the metering equipment on the output of a power plant, demand response resources will need high accuracy, fast-response, and communicating devices that not only measure the actual usage, but also calculate baselines and report the load reduction in “negawatts” (reductions of megawatts).

Measurement and Verification is crucial to worldwide efforts to curb carbon emissions and to the rise of energy efficiency and end-use reductions as the “first fuel” to meeting growing demand. M&V today is largely the realm of utility specialists, expert consultants and energy engineers. As energy reductions play a larger role in energy systems of the future, rigorous M&V will provide a necessary foundation for a “negawatt” marketplace. The path to widespread, scalable, rigorous M&V of the future relies on several trends that are evident today and will continue to grow.

  • Standardization – To facilitate scalable contractual relationships that allow for financing of energy efficiency improvements on the basis of expected energy savings, all parties (customer, service provider, financier, etc.) must agree on the formula for calculating savings. Standards have emerged for both energy efficiency and demand response, but there is significant work to be done on this front

  • Automation Technology – To date, M&V is somewhat of an art, requiring the expertise of a dedicated engineer and a customized, manually implemented plan for each program or project. Improved hardware (e.g. metering, building controls) as well as new analysis algorithms are moving M&V toward a “black box” approach, making it simple and scalable. This is a benefit of the smart grid that is not frequently mentioned.

Standards continue to improve and gain wider acceptance, while M&V technology is poised to change the field. With these developments, rigorous M&V will play an important role in the scaling up of energy efficiency, demand response, and carbon mitigation.

November 2011


Related Article(s)