Steve Gossett, Jr., vice president of Transcend Equity Development Corp, addressed those in attendance by saying the “market for energy efficiency will mature significantly over the next 5 years,” but that several key barriers to achieving scale in the marketplace from a finance perspective still need to be overcome. Chief among these barriers is the persistence of what is commonly referred to as the “split incentive” issue—when developers make energy-saving investments and tenants then accrue the benefits of lower energy bills, whereas the beneficiaries of the investments are not the same parties that bear the costs which thereby split the incentives across users.
William Miller, senior advisor with SENTEC Inc. and the U.S. Department of Energy (DOE), added to the discussion of marketplace constraints by citing the difficulty of deploying and implementing certain technologies that he feels would serve to provide certainty among building owners and tenants alike, namely the ability to create dashboards that educate tenants about their energy use and behavioral interactions with the buildings in which they work. The DOE Office of Energy Efficiency and Renewable Energy’s Better Buildings Program, which to date has focused more on the residential sector is now increasingly focusing on the opportunity for technologies applicable in commercial properties and how a greater knowledge of trends and tools in energy finance is important to the efforts of DOE.
Moderated by A. James Tinson, principal and chief executive officer of Hart Howerton, the panel also focused on the importance of “continuous commissioning.” Building commissioning is the practice of making sure a building—existing or new—is properly “tuned” for optimal operations. This provides documented confirmation that systems function according to equipment specifications and to an owner’s needs to ensure continued performance over time. This time series performance data is crucial to tracking and benchmarking and is often the missing element that helps hurdle another barrier—lenders’ restrictions on the financing of building equipment such as chillers and HVAC systems necessary to complete retrofit projects. Wes Frye of Cisco Systems shared with the audience a number of initiatives the company is working on to help communicate the performance of these building system elements so that owners and operators can better manage performance of their building portfolios.
Director of the Office of Federal High-Performance Green Buildings at the U.S. General Services Administration (GSA), Kevin Kampschroer, presented highlights of GSA’s efforts to deeply reduce energy use and CO2 emissions in its properties nationwide. “By not advancing energy efficiency, we as an industry are failing to address a significant risk in the market today,” said Kampschroer, in reference to the federal government’s role of leading by example and incorporating energy efficiency finance strategies into its suite of measures to optimize performance of its real estate holdings as outlined in President Barack Obama’s Executive Order 13514, issued by the Obama Administration in the Fall of 2009.
As part of meeting requirements under Executive Order 13514, the GSA, a lead agency in two major initiatives under the executive order, declared its long-term goal of reaching a zero environmental footprint and released aggressive greenhouse gas reduction measures, laying out how the agency will reduce its overall greenhouse gas emissions by 30 percent by 2020. Towards this goal, GSA’s sustainability plan commits to reducing energy consumption in federal buildings by one-third, increasing renewable energy generation and reducing fleet petroleum consumption by 30 percent, reducing emissions from employee commuting and business travel by 25 percent, and diverting at least half of GSA’s nonhazardous waste from landfills.
“If we used existing commercial space efficiently- which is currently underutilized approximately 50% of the time during an average workday—we wouldn’t need to build any more office space for the next ten years” cited Kampschroer, who concluded that in the next few years, the GSA will no longer manage buildings that are not at least EnergyStar labeled.