Enigin Update - Commercial Property Energy Efficiency Upgrades worth $190 Billion
A NEW report has estimated that the market potential for energy efficiency retrofits or upgrades in commercial real estate in the U.S. is projected be worth $190 billion over the next ten years.
The report from the Urban Land Institute (ULI), entitled "New Tools. New Rules”, acknowledges that retrofitting commercial building to be energy efficient is one of the least expensive ways to combat climate change and is becoming one of the primary ways to reduce green house gas emissions in the U.S..
The report looks at how real estate investors are considering energy efficiency in existing commercial buildings, particularly in the current depressed market conditions, tighter credit and new building regulations.
Patrick Phillips, ULI CEO, stated:
"Energy retrofits of existing buildings is creating real estate value, producing jobs and reducing greenhouse gas emissions.
"The commercial real estate community is demonstrating great leadership in these activities, helping to pave the way into the new clean energy economy. Utilities, public officials and policy makers need to take notice of the concentrated market potential of commercial real estate and the untapped professional capacity to unleash it on the existing building stock."
The sheer size of the commercial real estate sector's carbon footprint underlines the potential of energy-efficiency measures to make a substantial impact on reducing emissions, according to the report. Around five million commercial buildings across the U.S. are though to be responsible for 18 per cent of the total annual energy consumption nationally, with just seven per cent of those buildings representing half of the overall floor area of commercial buildings.
The report reveals that investing in energy efficiency in real estate requires new business approach and practices, along with government incentives:
"Recent efforts to catalyze investments in energy efficiency in buildings have challenged how policy makers and market participants view real estate finance and valuation practices.” The report states.
"Are investments in energy efficiency to be approached as a discreet value capable of being financed independently of the underlying real estate asset, and then traded as "efficiency-backed" securities on secondary markets?
“Or, is an energy efficiency investment to be treated in the same way a lobby upgrade is, which without question drives new value to the real estate asset? The answer is both, as policymakers work to unleash market forces to reduce energy demand." The report adds.
The reports discloses that innovation in this investment market requires evidence of real costs and returns. Information available currently on building performance shows that energy retrofits in an individual building typically save 20% to 30% with some cases provided as much as 60% saving on energy use, depending on factors such as a building's age, type, design, condition and maintenance.
Enigin Distributors have been installing Enigin PLC's Eniscope into clients buildings that display real-time energy use along with historical data, leading to accurate reporting of energy costs and usage and then intelligent action to reduce demand and utility bills.
Enigin PLC's Eniscope provides the reporting and proof of savings and where those savings can and are being made.
The report contends that there is a compelling business case for commercial property landlords and owners to incorporate energy efficient practices into their business plans and strategies:
* Operating-cost reductions through energy savings in an era of tighter budgets
* The creation of new markets or lines of service leading to economic expansion
* Reduced business risk in the midst of energy price volatility and changes in consumer preferences regarding green building
* Improved tenant working environments, leading to employee retention and higher productivity
* The creation of reputational advantage in the context of evolving voluntary and regulatory emissions reductions targets
* Lower building vacancy rates and tenant turnover
* Reduced reputational risk in a globalized, increasingly transparent marketplace.
The report proposes a sea change in the way that energy efficiency is viewed, instead of an "investment in less," as in less environmental impact, tit should be viewed as an "investment in more," that is as an investment that produces more value and cost-savings.
The report also calls for elevating U.S. government incentives for energy efficiency on to a level with those for solar, wind and other renewable energy incentives.
Image by Cherrylynx
