Reliable savings begin with reliable data — and that starts with a proper audit

In the world of energy efficiency retrofit projects, the pressure to move fast can tempt project owners and decision-makers to skip critical steps. One of the most underestimated — yet foundational — steps is conducting a detailed ASHRAE Level 3 Investment Grade Audit (IGA) before entering into an Energy Savings Performance Contract (ESPC).

While preliminary assessments or Level 1/2 audits may offer quick insights, they lack the rigor needed to de-risk large investments and secure financing. In contrast, an IGA dives deep into a facility's systems, operating patterns, and actual performance to develop robust, bankable savings estimates. These estimates are what investors, financiers, and insurers rely on when standing behind multi-year performance guarantees.
 

What’s at Stake Without a Level 3 Audit?

Skipping the IGA or relying on a lower-level audit introduces major risks:
 

Savings uncertainty

Without detailed energy modeling and M&V planning, projected savings may not materialize.
 

Limited investor confidence

Financiers are unlikely to support a project without solid baseline data and engineering-grade ECM estimates.

 

Legal and commercial exposure

Performance guarantees tied to incomplete audits can lead to disputes, unmet expectations, and even default.
 

IGA: The Bridge Between Potential and Performance

A proper IGA turns theoretical energy savings into credible, contractual commitments. It helps all parties — client, ESCO, and financier — align on:
 

• What energy conservation measures (ECMs) will be implemented
• How much each ECM will save (and cost)
• What the baseline and M&V methodology will be
• What risks are accounted for — and which aren’t

Without this clarity, there is no foundation on which to confidently sign an ESPC, let alone seek financing or performance insurance.

 

Conclusion: No IGA, No Deal

A successful ESPC project doesn’t start with a contract — it starts with certainty. And certainty only comes from a properly conducted ASHRAE Level 3 audit. If the savings are to be guaranteed, they must first be proven. That’s what makes the IGA not just a technical step, but a commercial necessity.