There has been a huge increase of interest in energy audits of commercial and industrial buildings. The first step is usually understanding how energy is being used in the facility. This requires measuring power (kW), the rate at which energy is expended by the facility, and demand (kVA), the total requirement that a facility places on the utility to deliver voltage and current, without regard to whether or not it does actual work.

A digital multimeter (DMM) can measure voltage and current, the product of which equals demand for a simple single phase circuit with a stable load. For a real life load, we need to also account for power factor (PF) which is equal to kW/kVA. Utilities often collect a penalty charge is PF falls below 0.95.

To measure real power we need to simultaneously measure voltage, current and Imaginary Power or Volt-Amps Reactive (VAR), a current flow that is present on the distribution system but produces no work. It's usually caused by motor inductance and is greater when motors are not loaded to their full capacity. Harmonic currents, reflected back into the system, also reduce power factor.

Measuring real power requires a meter that can simultaneously measure voltage, current, VAR and harmonics on a one-second period. A DMM cannot do that but a power quality analyzer (PQA). PQAs will typically measure power usage for one hour, which  makes it possible to estimate energy usage for a month or year. A power logger, another type of power quality tool, can perform a 30-day load study to provide an even better understanding of power consumption over time.