Commercial, Demand Management, Energy Efficiency, Energy Storage  -  February 11, 2016

Energy efficiency in existing buildings must be addressed; here’s how

Large commercial buildings in the U.S. address only 2% percent per year of the net present value-positive investments in efficiency available to them, according to a recent Harvard Business Review article written by the Rocky Mountain Institute’s Iain Campbell and Koben Calhoun. The reason for this market short coming is that building efficiency retrofits are expensive and lack an institutionalized approach to deployment.

While that is no easy task, it is also not impossible. Informed by work with Retrofit Chicago’s Commercial Buildings Initiative — a public-private partnership to promote and support energy efficiency among commercial and institutional buildings — RMI suggests that retrofits need to be:

• Relevant (appropriate to their building)
• Fast (a project lasting less than a year)
• Capital-light (or better yet, funded by low-cost capital provided by a third party)
• Affordable (with a simple payback of less than 4 years, and ideally closer to 2)

To achieve these goals, RMI is "developing an industrialized approach to the building retrofit process that incorporates certain characteristics of the mass customization model.” Low-cost sensing technology and ability to acquire data from building systems and energy-consuming equipment is helping to make that possible.

RMI believes an industrialized approach can reduce the cost of retrofitting buildings by more than 30%, with a typical simple payback less than four years. City governments can facilitate this by implementing energy benchmarking and disclosure ordinances that help identify opportunity buildings; acting as a convener and potentially as a program administrator to enable the model to be deployed at scale; and passing legislation that enables innovative financing mechanisms, such as Property Assessed Clean Energy, or PACE, that deliver dedicated financing for energy efficiency.     

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