Green Retrofits Help Facilities Achieve a Sustainable Future
Even if new construction isn't on your company's agenda, building owners can still reap sustainability's benefits with green retrofits.
November 2010
After a building boom during the first half of the decade, new construction has ground to a halt due to a mortgage meltdown, credit crisis, and recession. This has curtailed implementation of sustainable practices, which are a key component of new developments. With recovery in development still far off, retrofits represent the best opportunity today for industrial users to harness the benefits of sustainable design.
Just how vast is this opportunity? Pike Research says 80 percent of all U.S. commercial buildings are more than 10 years old. This property glut encompasses more than 80 billion square feet, and is one of the country's top energy consumers and carbon emitters.
Find the Savings
In California, commercial buildings account for a staggering 37 percent of total energy consumption, state-based independent research organization Next-10 says. A considerable number of those buildings fail to maximize potential energy savings. The data reveal an opportunity for significant energy and cost savings via green retrofits. The potential savings are significant if buildings are evaluated and upgraded. Pike's study suggests that a 10-year retrofit program based on modern best practices can yield annual savings of more than $41.1 billion. And Next-10 finds that 80 percent of energy currently used is not maximized. Some low-cost fixes could save both businesses and states significant cash.
The benefits of sustainable retrofits have captured the government's attention. Representatives from states including Florida and California are campaigning for programs that give financial incentives to property owners who make sustainable retrofits. PACE (Property Assessed Clean Energy) bonds fund these programs, with proceeds for commercial and residential property owners to finance retrofits and repay the funds over 20 years through annual assessments of property tax bills.
These programs mitigate the high upfront costs of some sustainable construction projects (particularly in a challenging economy), and seem to be finding favor. PACE financing for commercial buildings will reach $2.5 billion annually by 2015, Pike says.
With a large supply of obsolete facilities, a global push for efficiency, and a groundswell of governmental support, we are at the start of a golden age for sustainable retrofits. Property owners who find ways to increase efficiency are poised to lead the sustainability race.
Where to Look
A successful sustainable project has four key objectives. First, it must have a positive environmental impact. With a wealth of research highlighting the importance of environmental stewardship, companies face tremendous pressure to reduce their carbon footprints.
Second, the facility must increase efficiency. As an owner with a large portfolio of properties near the Ports of Los Angeles and Long Beach, the majority of Watson Land Company's tenants maintain global supply chains, which change with the world economy. The uncertainty surrounding cargo volume requires flexible and efficient distribution centers, two prime features of sustainable industrial buildings.
Third, the project must reduce operating costs, including use of electricity, water, and any other resource requiring usage fees or ongoing maintenance and repair. While each of these components can serve a separate function, they collectively unlock a reservoir of untapped cost savings.
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