How much should an energy audit cost?

There are a lot of concerns on what is the appropriate fee for the various Energy Efficiency services. Of great interest are the energy audits. I do not know what happens in other countries but in Kenya we still do not have a standard procedure to price our energy audits. CEEC through KAM has been doing energy audits though with subsidies from various donors. This has largely affected the market since they act like a subsidized competitor to other freelance energy auditors. I suggest we consider the various dynamics to pricing of energy audits and hopefully develop some acceptable guidelines.
We can create some guideline to help auditors determine the price of the audit. This guideline can be followed by all energy auditors to ensure we do not undercut each other or dilute the energy auditing business. I would suggest the following in determining the price:

1. The type of the audit. Is it general or investment grade? A minimum fee can be set for both.

2. Size of the facility. After agreeing on the fee for type of audit, we can combine it with size so that we have a fixed metric for it. For example; Ksh. 80 per sq ft. This can largely apply for buildings and closed unit manufacturing plants. This pricing method may not apply on open farms or large plantations.

3. Complexity of the facility. We can allow auditors to price higher for more complex facilities like hospitals, detention facilities or treatment plants. We can have a category of complex facilities and allow our auditors to price a little bit higher for such.

I know other things like experience of the auditor or audit firm counts but that can vary from consultant to consultant. We need to come up with costing system that is realistic to the various sectors/categories and also sufficiently remunerate consultants. Do we factor in turnover of the company or how much energy they consume in the pricing model? We can come up with various bands which reflect this.
How do we handle a group of companies with similar production processes/services? Or how do we handle a group but with units of different sizes? Do we offer discount in some cases? Also when we talk of energy, some facilities spend/consume more fuel than electricity hence tricky if one did costing based on electricity costs only. Can consultants compute their fee per daily rate….man days/hours or as a lump sum? What does IEK/Ministry of public works state as professional fees for engineering consultants? What are the international rates especially for energy audits? Let me know your opinions and what you think we can do to create a pricing model for energy audits.

2 Comments

  1. Bernard

    Chris,

    Great stuff. Keep it coming.

    Bernard Muturi

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