How is SIR Calculated?

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A standard SIR calculation is achieved by performing a simple calculation of:

[Life Time Savings of a Measure]  /  [Cost of the Measure]


Using Hancock Software, the State and Corporate Administrators are able to extend the SIR calculation by including the following for consideration:

- A Non-Energy Benefits Multiplier :  This has been used by states to encourage the implementation of Measures which would reduce  fire deaths & costs, reduce hypothermia, reduce water use, and increase property values.  This value can only be set by the Program Administrator and is available on the Program Information > Savings Calculation > Non Energy Benefit Coefficient  page.


- Fuel Escalation and Discount Rates : This is used by states to record and adjust the cost-effectiveness analysis parameter settings for changes to the fuel escalation and discount rates


The SIR calculations in Hancock take these additional parameters into consideration, making the Amended calculation:


([Life Time Savings of a Measure] [State & Corporate Considerations]) /  [Cost of the Measure]




Does the SIR calculation include the utility usage entered through the client intake screens ?


The user entered utility usage from the energy consumption screen is not used in energy modeling or SIR calculations. Instead, the energy model takes the existing conditions entered by the user and models a pre-usage. The calculated pre-usage can be viewed on the energy savings screen. It is the modeled post usage minus the modeled pre usage that determines the energy savings.


Why does the SIR not match my Calculation of total Measure Savings over the Lifetime of the Measure?

Two additional parameters are considered in SIR calculations for Hancock Software:  The Non-Energy Benefits Multiplier (see above) and the Fuel escalation and discount rates. These multipliers are critical in measuring the true cost and benefit of a measure and are unique per program.

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