It doesn't take much for building owners to enjoy a savings bonanza from energy efficiency, as the non-profit Carbon War Room explains in a report today. However, despite the potential, many private building owners miss out on the financial rewards of readily available technology.
The white paper, "Raising the Roof: How to Create Climate Wealth Through Energy Efficiency," says misinformation and a lack of understanding are just a few reasons why building owners leave easy money on the table. That's according to research gathered from 30 municipalities, from Chicago, to Wellington, New Zealand, over 30 months.
Yet with key steps, buildings can slash their energy use by 80 percent, cutting more than $78 billion per year from the electricity bills of American consumers and businesses. The report provides building owners and city sustainability officers with fine points about harnessing technology, finance and policy.
"We already have an industry and commercial technologies that could achieve a 3 to 20 percent reduction in carbon emissions with little to zero upfront costs," said Joshua Kagan, the Carbon War Room's operation lead for building energy efficiency. "We can globally abate a gigaton-level of carbon dioxide and generate hundreds of billions of dollars in profits."
Kagan points out that many building owners are waiting for some sort of breakthrough.
"There's been a misperception that we need future technologies to be discovered or created to drive down emissions and we already have those technologies today," he said.
So how can commercial and private building owners begin to capture some of that money?
A deep retrofit primarily of ventilation, temperature and high-performing light systems can add $3 to $30 per square foot to the value of office space for an occupant, the report says. That's based on potential productivity gains of 1 to 5 percent. This type of retrofitting can include installing new HVAC systems, windows, lightbulbs and ventilation systems; monitoring energy use to gauge room for improvement; and using energy storage. In addition, government programs and policies can help with costs associated with retrofits.
"Energy efficiency is both the challenge and the opportunity," Kagan said. “If you're a business and you're able to reduce efficiency costs to a building, which oftentimes is the largest expense, you can reduce the operating costs (and) therefore increase the value of the building.”
Software plays an important role in benchmarking, auditing, implementation and capital upgrades, the report details. Building operators can use analytics from FirstFuel or Retroficiency, for example, to monitor building energy usage. The Peer Building Benchmarking database of more than 120,000 buildings can aid with meeting Energy Star best practices. And tablet-based apps such as those from kWhOURS can assist with auditing.
Until recently, municipalities, universities, schools and hospitals have paid the most attention to energy efficiency, but more commercial building owners are starting to invest.
The Carbon War Room's research included:
• Examining energy systems that worked and that needed improvements.
• Looking at cities' energy benchmarks to gauge whether they've helped in savings.
• Using software to track the energy output of municipalities studied.
• Gathering feedback on the hurdles and opportunities of launching energy plans.
The Carbon War Room advocates that building owners choose from among many energy models rather than follow a "one size fits all" approach. In addition, creating a budget for upgrades and marketing and communications about any new changes are key. While the future is bright for energy efficiency worldwide, however, many obstacles interfere.
"We have some big barriers, like high upfront costs to do retrofits, and building owners just don't have the capacity," Kagan said. "Either they don't have the capital to do it themselves or they don't have the capacity to source additional debt. ... Another barrier is the lack of data and information about how a project has performed historically. So much project data is confidential; there's no open source database that tracks historical performance."
In addition, legal and structural challenges such as mortgage covenants can prevent the sourcing of additional debt. But even with significant barriers, energy efficiency for commercial buildings will continue to grow by leaps and bounds around the world.
"We estimate that $100 million in projects will be (privately) funded this year and this will scale to $1 billion within three years," said Kagan.
Building image by Anton Havelaar via Shutterstock