Profitability calculation for your investment
In times of rising energy prices and growing demands for sustainable management, companies are faced more than ever with the challenge of evaluating energy efficiency measures not only from a technical perspective, but also from an economic one. This is precisely where DIN 17463 comes in: it offers a structured method for the uniform evaluation of the economic efficiency of energy efficiency measures.
The standard is becoming increasingly relevant, particularly due to the Energy Efficiency Act (EnEfG) and the growing importance of ESG criteria (environmental, social, governance). The following article sheds light on what lies behind DIN EN 17463 (sometimes referred to simply as DIN 17463), who it is relevant for, and what advantages it offers companies—both strategically and operationally.
What is the DIN EN 17463 (ValERI) standard and why is it relevant for companies?
DIN EN 17463, also known as ValERI (Valuation of Energy Related Investments), is a German standard that provides companies with a standardised procedure for evaluating energy efficiency measures. It aims to present the economic efficiency of such measures in a transparent and comparable manner—across the entire life cycle. It thus goes beyond traditional methods such as simple amortisation calculations and considers not only investment and operating costs but also energy savings, maintenance, and, if desired, risks.
For companies, this means that investments in energy efficiency can be evaluated objectively and transparently with the help of the standard—an important aspect when it comes to justifying decision-relevant measures internally, applying for subsidies, or meeting legal requirements, such as the implementation obligations under the Energy Efficiency Act (EnEfG).
Of course, the evaluation of the measures is only as good as the data used as input parameters, and comparability is only possible if my actual energy costs are also taken into account.
However, the application creates clear added value, particularly in conjunction with energy audits in accordance with DIN EN 16247-1 or energy management systems in accordance with ISO 50001: it helps to select from a wide range of possible measures those that make the most sense in terms of both energy and economics. Companies thus not only strengthen their energy efficiency but also their future viability and competitive position.
This is how the assessment of energy-related investments works in accordance with DIN 17463
The assessment in accordance with DIN EN 17463 within the framework of the standard is carried out in several steps:
The first step is to describe the measure and document all benefits and costs. As an example, we can refer directly to the standard, which describes the replacement of a large pump system with five individual pumps. This example is taken directly from the standard.
The costs of the measure are primarily financial in nature. First and foremost, these are, of course, the investment costs for the pumps. In this case, the installation costs are included in the investment. If this is not included, or in the case of costs incurred by your own staff, these must, of course, be listed separately. The standard also includes the planning costs for the design of the new pump system and the costs for production downtime. All costs are one-off costs incurred at time zero, i.e. before the measure is implemented.
In this example, the benefit, i.e., the reason why the measures are being investigated in the first place, is primarily the savings in energy consumption of the new pump system compared to the existing system. The costs are to be applied in each year of the analysis. Every two years, the reduced maintenance costs resulting from the more modern pumps come into play. Another benefit is the scrap value of the pumps, which, of course, is only applied once at the beginning of the project.
The standard also recommends taking non-monetary benefits into account in terms of quality – such as positive effects on CO₂ balances or security of supply. In the example given in the standard, these include lower noise emissions from the pumps and reduced space requirements. This information can still be included, and these evaluation criteria can be used when comparing variants.
Based on these principles and a net present value method, the financial benefit of the measure is calculated over its entire useful life. Positive net present values indicate that the expenditure makes economic sense. Price increase effects are taken into account. In addition, the degradation of the systems and risks can also be considered.
In order to calculate the net present value accurately, a reasonable value for a replacement investment, the capital interest rate, is required. This is often not so easy to identify. Sometimes it may be a requirement of management or financial accounting; in other cases, it is the explicit interest rate of a loan recently obtained from the bank. If the capital interest rate cannot be determined, we use the base rate as a reference in our valuations. Adjustments can still be made easily at a later date.
Overall, DIN EN 17463 enables a well-founded, structured, and comprehensible assessment, which is extremely useful both for internal investment decisions and in the context of legal requirements and funding applications.
Differences from traditional amortisation calculations and ROI considerations
The assessment of energy efficiency measures according to DIN EN 17463 differs significantly from conventional methods such as payback analysis or return on investment (ROI) analysis—particularly in terms of depth, accuracy, and informative value.
1. Observation period and life cycle
While traditional amortisation calculations generally only consider the time required to repay the funds invested, DIN 17463 analyses the entire life cycle of a measure—including operation, maintenance, servicing, price increases, and disposal costs. This provides a more comprehensive picture of the actual economic efficiency and return on the capital invested.
2. Consideration of all costs and benefits
ROI or payback calculations usually focus only on investment costs and direct savings. ValERI, on the other hand, takes all relevant economic aspects into account, including subsidies, operating costs, energy prices, financing costs and potential risks. The result is a more detailed and realistic assessment.
3. Net present value instead of simple key figures
Instead of a static ROI or payback period, the net present value (NPV) is calculated. This dynamic method allows the total financial benefit of the measure—discounted to the present day—to be determined precisely. This means that measures requiring higher investment but offering long-term benefits can also be classified appropriately. A dynamic ROI can then be derived from the net present value, which often provides further interesting insights when compared with the static value.
4. Comparability and decision support
One major advantage of the standard is standardisation: it creates a uniform basis for evaluation that allows different measures to be compared objectively – ideal for selecting the most economically viable energy efficiency projects within a company. Nevertheless, it must be clear that, as described above, too short a time frame or incorrect assumptions cannot be corrected by the standard, but will continue to have an impact.
5. Sensitivity analysis
In our opinion, one of the greatest advantages of the standard is sensitivity analysis, in which all relevant factors influencing the net present value are varied alternately, thereby identifying the best and worst cases, as well as the parameter on which the net present value mainly depends.
Which companies should use ValERI – and when? What are the pitfalls?
The calculation is particularly useful for companies that want to invest strategically in energy efficiency measures and need a comprehensive, well-founded basis for decision-making. It does not matter whether the company is a manufacturing industrial enterprise, a large building operator, or a service provider—the decisive factor is the objective: to evaluate expenditure in a sustainable, economical, and comprehensible manner.
However, current legislation also makes it clear that Valeri is not optional, but rather mandatory, especially with regard to the implementation plans pursuant to Section 9 of the Energy Efficiency Act (EnEfG), by the Federal Office of Economics and Export Control (BAFA) when conducting energy audits and certifying ISO 50001 energy management systems.
Over the past few years, we have come across many different calculation tools based on DIN EN 17463, as part of ISO 50001 support and also in energy monitoring input masks. What most of these tools have in common is that they are incomplete and would usually not even be able to calculate the example discussed in the standard.
However, the absence of sensitivity analysis is particularly critical. This means that one of the key advantages of the standard over other calculation methods is missing, as is an important decision-making aid for the measures at hand.
Conclusion: How can I use ValERI effectively?
DIN EN 17463 is much more than just an evaluation method—it is a strategic tool that helps companies analyse and evaluate energy efficiency measures from an economic perspective. In contrast to simple payback calculations, it considers not only the pure costs but also energy savings, operating costs, CO₂ reductions, and long-term effects.
ValERI offers a clear, transparent basis for decision-making, especially for companies that are facing significant investments, want to apply for subsidies, or must comply with legal requirements such as the Energy Efficiency Act (EnEfG). The result: investments that not only pay off, but also contribute to long-term competitiveness (again, caution is advised if your company exceeds 2.5 GWh of final energy consumption per year).
Would you like to know how ValERI can be used in your company and what savings potential it offers? Do you need help calculating your measures?
Contact us now to work together on planning your energy efficiency measures in an economical and sustainable manner.