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Are We Spending Money in the Right Spot?

Is the current Obama administration’s approach to eliminating greenhouse gases (GHG) balanced? It seems the in vogue thing to do is build a wind farm, set-up solar PV panels and put more and more money toward clean energy. I agree that all these measures have a tremendously positive impact on our environment. However, it appears the lost child in this whole green initiative is improvements on how existing buildings actually consume energy.

The amount of private commercial real estate that exists is in the billions. According to the Energy Information Administration’s latest report, there are over 4.8 million commercial buildings in the United States covering over 71.6 billion square feet. These buildings consume over $82 billion in electricity and spew out GHG. The cost of improving these buildings’ energy efficiency would be a fraction of the cost to build a wind farm or install an array of solar panels. Marc Gunther of Reuters recently covered Silicon Valley venture capitalist Sunil Paul’s “Gigaton Throwdown” report that details how top clean energy technologies can have a significant impact by 2020. Gunther writes, “building efficiency is a much, much cheaper way to reduce greenhouse gas emission than solar thermal power or nuclear” noting that it’s the least expensive option.

It’s plain and simple: today’s buildings don’t run efficiently and it’s the worst kept secret in America. There are many buildings that are either too cold or too hot and are wasting energy by allowing those kilowatts to literally escape out the window. I have been involved in commissioning millions of square feet of all types of buildings and can tell you that finding savings is easy and relatively inexpensive.

So why aren’t more building owners doing it? Reasons abound – building operators are too busy keeping their buildings from falling apart and dealing with tenant complaints. In addition, tenants are often kept in the dark with building costs and problem areas, but still have to foot the bill because of how leases are structured. This waste is quickly written off as the “cost of doing business” and not investigated further.

What incentives will encourage building owners and tenants to look at actively decreasing energy consumption as a bottom-line saver? The highest expense our businesses face today (other than payroll, benefits and rent) is energy. Improving energy consumption by just 10% will undoubtedly increase profits and save jobs by improving the bottom-line.

ROI should be proof enough to support energy efficiency of buildings. An upcoming study by ACEEE found that for every kilowatt-hour saved by installing solar panels we spend 20¢ or more. But for every kilowatt-hour saved by improving an existing building’s systems we only spend 3.5¢. Why does the current administration not see this and invest more toward building efficiency instead of focusing so heavily on clean energy? This too creates jobs, saves money and reduces GHG. President Obama recently said changing light bulbs is not that sexy, but he’s doing it. Though I give him credit, more still needs to be done. For now, building owners can follow suit and launch initiatives to capitalize on these low/no cost energy saving measures.

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Filed under Building efficiency, commissioning, energy audit, energy efficiency, Retrofit