The Rise of Building Efficiency and Retrofits: State of Green Business Forum - Chicago

It's commonly believed that when it comes to energy efficiency and buildings there's some low-hanging fruit -- but going after the rest costs a lot of money. Actually, that's not true, says C. David Myers, vice president for Johnson Controls and the firm's president for Building Efficiency.

Myers was in the spotlight Tuesday at the State of Green Business Forum in Chicago for a conversation with Senior Contributor Marc Gunther about perceptions, barriers and opportunities for energy efficiency in new and existing buildings.

The forum followed the release of the annual State of Green Business Report, which found that green building continues to be the buoyant element in the building industry. Energy efficiency retrofits in particular have seen growth as the projects produce financial benefits for the companies that pursue them as well as the firms that do the work.

{related_content}Energy efficiency in buildings, batteries and power solution are core to business at Johnson Controls. Building efficiency alone is a $13 billion business for the company, which has paid consecutive dividends since 1887.

Capital budgets and financing continue to be barriers for many businesses contemplating energy efficiency upgrades -- but the obstacles can be hurdled with the help of energy service companies (ESCOs), Myers said.

In such arrangements, the firm that provides solutions performs an analysis for the client to assess the capacity of facilities, designs strategies and solutions for the client, partners with a bank to secure financing and is paid through the savings realized by efficiencies.

In the case of Johnson Controls, "we guarantee those savings, which enables the projects to go forward," said Myers. "To date, we have guaranteed and delivered more than $50 billion in savings."

Johnson Controls' track record as an ESCO has enabled it to partner easily with banks, said Myers, and so has the firm's participation in high-profile retrofits that showcase the sites, their owners, project partners and savings gained by ramping up energy efficiency.

Work to make the Empire State Building a model of efficiency is among those projects. The Empire State Building Company, Johnson Controls Inc., commercial real estate services company Jones Lang LaSalle, the Clinton Climate Initiative and the Rocky Mountain Institute, teamed up to transform the New York City icon.

The $20 million retrofit -- part of a sweeping $500 million renovation of the Empire State Building -- is cutting energy consumption 38 percent, reducing energy costs by $4.4 million a year and is expected to have a three-year payback.

"The Empire State Building is a great story," said Myers (pictured right). "The owner, Tony Malkin, had a vision. He wanted to prove to the private sector that energy efficiency could have a financial payback that's sound."

As the supplier of HVAC and other building systems at Chicago's Willis Tower, the skyscraper known as Sears Tower until July last year, Johnson Controls also has a role in the green facelift of that highrise.

Gunther acknowledged the firm's long-held focus on energy efficiency -- Johnson Controls has been cosponsor of the Energy Efficiency Forum in Washington, D.C., for 21 years -- and asked Myers for a reality check on net-zero energy buildings, structures that produce or offset as much or more energy than they consume.

Net-zero energy buildings, Gunther noted, are an exciting aspect of energy efficiency -- an important subject but one that's "not sexy, usually."

"Zero net energy -- is it a fantasy? Just how faraway are we?" Gunther asked.

"It's something that happening today, it's not 15 years down the road," said Myers, adding that legislation has been in introduced in Europe on net zero-buildings.

In the U.S., examples of net-zero energy buildings include the headquarters for Integrated Design Associates (IDeAs), which set up shop in a former bank branch in San Jose. Johnson Controls helped develop the retrofit project that created California's first net-zero energy and zero-carbon commercial building.

The facility was recognized as a "Green Groundbreaker" by the U.S. Green Building Council's Northern California Chapter last fall and was among the projects highlighted at a conference on retrofitting commercial buildings held last month in San Francisco.

Full coverage of the State of Green Business Forum is available at