Environmental Leader

Commercial buildings are responsible for 37 percent of California’s energy needs, according to a new report by Next 10.

The findings suggest a new, untapped resource for reducing the state’s energy needs through efficiency measures. The report, Untapped Potential of Commercial Buildings: Energy Use and Emissions, suggests that energy use by commercial buildings could be reduced by up to 80 percent through energy efficiency measures, based on national averages.

Simple energy efficiency improvements to existing buildings, such as insulating window films, yield three dollars in savings on average for every dollar invested. Existing building stock represents the greatest opportunity for capturing the low-hanging fruit for

energy efficiency gains. In the average building, upgrading building insulation results in energy savings of 30 percent. Advances in lighting technology offers energy savings of up to 20 percent, according to the study.

Advances in lighting technology have created great potential for large negative-cost efficiency gains. Using CFL or LED technology offers average efficiency gains of 8–18 percent and 10–20 percent respectively.

The study also found that only 60 percent of all new commercial building construction meets California energy efficiency standards. A 2 percent increase in construction costs could yield energy savings from one-third to one-half less for new buildings, according to the study.

It also pointed out that California has no energy efficiency standards for existing building stock, which could yield substantial savings in energy. In existing buildings, split incentives, elevated hurdle rates, upfront capital costs, and an information gap have diminished large-scale adoption of energy retrofits, while in new commercial construction a lack of incentives for developers and ineffective installation and inspection methods are barriers to energy efficiency efforts.

But energy efficient buildings retain higher real estate value, commanding higher rents (6-7 percent) and maintaining higher occupancy rates than less efficient buildings, which could provide an additional financial argument for moving to more efficient building stock.

The U.S. Department of Energy has recently awarded more than $76 million in funding from the American Recovery and Reinvestment Act to support advanced energy-efficient building technology projects and the development of training programs for commercial building equipment technicians, building operators, and energy auditors.

Meanwhile, the Environmental Protection Agency (EPA) has announced a new pilot program to further improve energy efficiency in commercial buildings across several states and utilities.