Commercial Energy Audits for Cannabis Facilities: What to Expect

What an energy audit is, and the three ASHRAE levels

An energy audit is a survey and analysis of how a building uses energy, with the purpose of finding ways to use less without hurting operations. The standard that defines how one is done for commercial buildings is ANSI/ASHRAE/ACCA Standard 211, which establishes consistent practices for conducting and reporting energy audits, defines the procedures required to perform Energy Audit Levels 1, 2, and 3, provides a common scope of work for those levels, and sets minimum rigor and minimum reporting requirements [ashrae-std-211]. The U.S. Department of Energy's Audit Template tool follows the same standard [doe-audit-template], and utility programs increasingly write "must meet ASHRAE Standard 211 Level 2" into their incentive terms [pse-ashrae-audit].

The levels are cumulative. Each one includes the previous one and adds depth.

DOE describes a Level 2 audit as collecting building information, utility data and benchmarking, energy use by end use, and energy savings opportunities [doe-audit-template]; Puget Sound Energy describes the same level as a detailed engineering and economic analysis with actionable next steps [pse-ashrae-audit]. Those two descriptions are the most useful test of whether the report you receive is really a Level 2: if it does not break your energy into end uses and put a cost and a saving next to each recommendation, it is a Level 1 with a longer cover letter.

What an auditor measures in a cultivation facility

Cannabis facilities are unusual buildings and a good auditor treats them that way. In the Northwest Power and Conservation Council's survey of licensed producers, lighting was 66 percent of electricity use, flowering rooms alone were 49 percent, cooling was 15 percent, ventilation 12 percent, dehumidification 4 percent, and heating 3 percent [nwpcc-cannabis]. So the audit lives in the grow rooms and the mechanical room, not in the offices.

Expect the auditor to collect the following. Having it ready shortens the engagement and lowers the fee.

Utility data. Twelve to thirty-six months of bills, and interval data from the utility's meter if you have an AMI meter. Denver's cannabis energy guide describes three tiers of building data: utility bills, interval data where available, and data loggers at the building or sub-meter level [denver-bmp-energy-2019]. Level 1 lives on the first tier; Level 2 and 3 need the second and third. See interval data and AMI meters for how to pull it.

Lighting. Fixture counts, wattages including drivers or ballasts, photoperiods by room, dimming capability, and a light meter reading at canopy in each room. The auditor is checking two things: how many kilowatts switch on at once, and whether the delivered photon flux at the canopy justifies the watts. Denver's guide recommends tracking micromole levels at the canopy so you replace bulbs and reflectors when they underperform rather than on a calendar [denver-bmp-energy-2019].

HVAC and dehumidification. Nameplates, setpoints, sequences of operation, and logged run time. In a grow, the auditor is looking for the sensible-versus-latent mismatch: conventional equipment performs best at a sensible heat ratio of 80 percent or higher, and grow rooms often run well below that, especially during lights-off [hpac-latent-2023]. Equipment that short-cycles on temperature and never runs long enough to dry the room is a finding in nearly every audit we have seen a cultivator share. HVAC sizing for grow rooms covers the mechanics.

Envelope and air changes. Infiltration, roof insulation, and how much outside air the system brings in. Denver's guide advises sealing spaces to reduce CO2 exhaust, improve biosecurity, and reduce odors [denver-bmp-energy-2019], and every cubic foot of humid outside air you do not admit is a cubic foot you do not have to dehumidify.

Controls and schedules. When rooms start, whether lights-on is staggered across rooms, and what the HVAC does in the first 30 minutes after lights-on. Denver's guide notes that facilities are billed on kWh and peak kW and that staggered room schedules can significantly reduce energy costs [denver-bmp-energy-2019]; the auditor will look at the interval data to see if your schedule is doing that.

Motors, pumps, and power quality. Fan motor sizes and whether they are on variable-frequency drives, well and irrigation pumps, and power factor. A low power factor from a building full of drivers and ballasts can trigger a utility penalty; see power factor penalties.

Findings that come up again and again

Every facility is different, and we cannot cite a published tally of cannabis audit findings. What follows is the pattern operators commonly report from their reports, labeled as such.

1. Lighting schedule sets the demand peak. All flower rooms on the same photoperiod, all contactors closing in the same interval. The fix costs nothing and usually leads the list.
2. HVAC and lights start together. No staged start sequence, so compressors add their inrush to the lighting step.
3. Dehumidification is the wrong tool. Air conditioning doing latent work it is not built for, or portable dehumidifiers in a room with a rooftop unit fighting them.
4. Lights are overdriven or underdelivering. Canopy photon readings that do not match the fixture spec, from aging lamps, dirty optics, or bad mounting height.
5. Outside air is uncontrolled. Exhaust fans and make-up air pulling humid summer air that the dehumidifiers then remove.
6. Envelope leaks. Unsealed penetrations, uninsulated roof deck over flower rooms.
7. Rate class and tariff mismatch. Not an efficiency measure, but auditors who look at bills often spot a demand ratchet from a previous tenant or a rate class that no longer fits. See utility rate classes explained.

An LED conversion is often the largest single kWh measure in the report, and it is the one that also changes the HVAC load, since fewer watts of lighting means fewer Btu to remove. The LED retrofit ROI calculator lets you test the auditor's assumptions; the page on LED vs. HPS energy cost explains where the savings come from.

A worked example of how a finding becomes a dollar figure

All inputs here are ours, chosen so you can follow the arithmetic.

Assume a facility with three 4,000 square foot flower rooms at 35 W per square foot, 140 kW each, all on the same 12-hour photoperiod, with HVAC adding 50 percent of lighting kW at lights-on and 30 kW of other load. Assume a delivery demand charge of 12 dollars per kW-month and an energy price of 13.33 cents per kWh, Pennsylvania's June 2026 commercial average [eia-epm-5-6-a].

• Current coincident peak: (3 × 140) + (0.5 × 420) + 30 = 660 kW. Demand: 7,920 dollars a month.
• Finding 1, stagger rooms: one room on the opposite photoperiod. Lighting peak falls to 280 kW, HVAC at lights-on to 140 kW plus, say, 40 kW for the dark room. Peak: 490 kW. Demand: 5,880 dollars. Saving 2,040 dollars a month, about 24,500 a year, with no capital.
• Finding 2, staged HVAC start over 30 minutes: knocks perhaps 40 kW off the coincident interval. Another 480 dollars a month.
• Finding 4, LED conversion cutting lighting kW 35 percent: lighting to 273 kW total, and HVAC load falls with it. Energy: lights ran 420 kW × 12 h × 365 = 1.84 million kWh a year; at 273 kW, 1.20 million. Saving 644,000 kWh, about 85,800 dollars a year at 13.33 cents, before HVAC savings and before the rebate. Capital cost is the number that decides the payback, and that is what a Level 2 report puts next to it.

A report that lists those three findings in that order, with those numbers, is doing its job.

Who pays for the audit

Often not you, or not all of you. Three kinds of programs exist.

Utility commercial programs. Puget Sound Energy pays a base incentive on ASHRAE Level 2 audits that meet Standard 211, at 10 cents per square foot for combined electric and gas customers, covering up to 70 percent of audit cost, with a further 30 percent conversion incentive when the customer implements at least one approved measure, for buildings of 20,000 square feet and up [pse-ashrae-audit]. Terms vary widely between utilities, and many programs exclude industrial facilities or require pre-approval; PSE's page notes that multifamily and industrial facilities are generally ineligible [pse-ashrae-audit]. Ask your utility's business program how it classifies a cultivation building before you assume.

State agricultural and rural programs. The Oregon Department of Energy's Rural and Agricultural Energy Assistance Program pays 75 percent of the cost of an energy assessment for Oregon agricultural producers and rural small businesses, with assessments typically running 4,000 to 8,500 dollars [odoe-rural-ag-audit]. NYSERDA's Agriculture Energy Audit Program serves farms and on-farm producers including greenhouses, for customers of New York's investor-owned utilities who pay the System Benefits Charge, and each audit report comes with farm-specific recommendations [nyserda-ag-audit]. Neither page names cannabis [odoe-rural-ag-audit] [nyserda-ag-audit]. Eligibility for a licensed cannabis grower is a question for the administrator, and the answer has changed over time in several states; get it in writing.

Public and grant-funded programs. Washington's Department of Commerce awarded about 14 million dollars to 299 public building owners to fund ASHRAE Level 1, Level 2, and targeted Level 2 audits [wa-commerce-audit-incentive]. Programs like this are not open to private cultivators, but they are a signal of where audit funding is heading, and they set the Standard 211 vocabulary that private programs copy.

Whoever pays, insist on the deliverable: a Standard 211 Level 2 report with end-use breakdown and a measure table. A free "assessment" that is really a lighting vendor's sales visit is worth what you paid for it.

Using the report in negotiations

The audit report is the most complete description of your load that exists, and load is what every counterparty prices.

• With a competitive supplier. A supplier quoting a fixed or block-and-index contract wants your hourly shape and your expected changes. A report that documents a planned LED conversion and a staggered schedule lets you contract for the load you will have, not the one you had, and avoid paying for a shape you are about to fix. See fixed vs. index vs. block-and-index contracts.
• With the utility. The report's peak demand analysis is the evidence for a rate class review and for challenging a ratchet set by a previous tenant. It is also what a demand response aggregator needs to enroll you; see demand response programs.
• With a landlord. In a master-metered building, the end-use breakdown is your case for a fair allocation; see submetering for multi-tenant buildings.
• With a lender or investor. Level 3 numbers are the ones that survive underwriting. If capital is the goal, say so before the auditor scopes the work.
• With your own team. The measure table is a capital plan. Sequence the free measures first; they change the demand profile that every later measure is priced against.