There are two types of indicators that businesses use to evaluate their performance: leading indicators and lagging indicators. For over 20 years, NABERS has been the most important lagging indicator of energy performance for Australian commercial office buildings.
That is not a criticism of NABERS. Far from it! Just as a P&L statement is a lagging indicator of a company’s profitability (because it tells the reader what has happened, not what is going to happen), a NABERS Energy or NABERS Water rating tells the story of how well a building was managed up until the date it was rated. It doesn’t give any insight as to what’s happening right now, or what’s to come.
What is NABERS tracking and what’s the problem with it?
For almost as long as there have been NABERS ratings there have been “NABERS trackers.” Building owners and operators don’t want to wait until the end of a rating period to find out if their rating has risen or slipped in much the same way as business owners don’t want to wait until after the end of a Financial Year to learn whether they’re making money, or not. Accounting software systems address this by providing tools to generate live P&Ls and other reports that give a “live” status of a building’s financial position and performance. Vendors of energy analytics software do the same for NABERS ratings. But (assuming all the inputs are correct) the NABERS-tracking dashboards, apps and reports are still lagging insofar as they talk about what’s happened, not what’s to come.
There are two problems with the thinking behind most NABERS trackers:
- NABERS ratings don’t change day-to-day. NABERS measures the annual performance of a building on a six-star scale to a granularity of 0.5 stars. A great / terrible day or even week is unlikely to move the dial. This means that tracking NABERS at this granularity is pointless.
- They give little insight as to what’s coming or, therefore, what the likely outcome of what’s coming is going to for the next NABERS rating. Does that make sense?
The road ahead matters more than what’s in the rear vision mirror!
All of this begs the question: what is a “leading indicator?” Put simply, a leading indicator is any metric that can help predict future events before they happen. In finance it can be sales pipeline data, customer success metrics like promoter scores, or employee training investments.
For a NABERS rating this can be quite tricky. Leading indicators of a building’s energy performance are a combination of actions taken to influence the building’s consumption, and the operating conditions that are coming up. For example, tuning an HVAC system will typically save energy, but its influence will depend on the operating conditions, especially weather.
Recognising that the past is past, and you can’t do anything about it, Buildings Alive’s focus is helping customers focus on what can be done to achieve the best possible outcome for their next rating. This is why we’ve recently introduced an important series of upgrades to our NABERS forecasting and reporting capability.
Projecting NABERS
Like others in the industry, Buildings Alive has been tracking NABERS ratings for buildings and portfolios for many years. We interface with the NABERS API to ensure our platform is always up to date with official rating data. But, recognising how important a forward-looking proactive approach is to our customers, our capabilities now include the following:
- Projected NABERS Rating (rounded and unrounded) for four scenarios: BAU, Baseline, Target, and With Measures Implemented.
- Rating Confidence level (Good / Moderate / Unreliable) based on metering coverage delta vs last rating (<5% = Good, 5–15% = Moderate, >15% = Unreliable), data completeness, elapsed time in rating period, and reliability of floor area (NLA) and Hours inputs.
- Portfolio Overview: weighted NABERS SPI, per-building projected ratings, last official rating, unrounded rating, margin, and data issue flags.
- Building Tracking: projected rating, baseline/target/with-measures comparison, moving annual emissions, and metering coverage check.
- Values from NABERS API: unrounded rating, Renewable Energy Indicator (REI), on-site renewables percentage.
- Values from Reverse NABERS API: electricity/gas consumption targets for the target rating and the next lower rating band.
NABERS was not designed for day-to-day building energy management and performance optimisation (but Buildings Alive was!!!), however its role as a communicator of building management excellence is undeniable. We’ve been very pleased with the initial response to our latest toolset developments and will be pleased to demonstrate these to anyone who cares about taking their building(s) to the next level of performance.