OVERVIEW
Commercial buildings, like shopping malls and office parks, are surprisingly complex systems to operate. Interactions within these buildings between lighting, climate control, ventilation, weather, use, productivity, and hundreds of other factors can mean the difference between profit or loss, efficient energy use or enormous waste. Keeping track of the variables and understanding the relationships between them would optimize building performance; however this requires both data and skill. Technologies to manage these factors are available1 but are only found in roughly 10% of commercial buildings.2 With the potential to save 19%3 of the more than 5 million GWh of energy used by commercial buildings annually,4 optimized building systems could have a large impact on U.S. emissions. Implementing better building systems would mitigate 200 megatons of CO2.5 This is the equivalent of eliminating almost all the energy used by New York state.6
ANALYSIS
“Building control system” can mean any of a wide variety of technologies that manage operations inside a commercial building. These systems, from climate control to fire alarms, can be highly automated and integrated or manual and separate.7 Many buildings have some form of an energy management system to help monitor or reduce energy usage, such as occupancy sensors for rooms or thermostats,8 but fully integrated, intelligent systems are rare.
Sophisticated building controls were a mere $10 million market in 2001, while more basic energy management control systems were only in 10% of commercial buildings.9 These systems are running up against many of the same barriers that other building efficiency improvements face: the principal-agent problem,10 building owners’ reluctance to commit to long payback periods,11 and a lack of trustworthy information.12 These systems also face some unique challenges, such as the higher need for user expertise and interaction,13 and a lack of interoperability between existing systems.14 This leaves buildings on a legacy system, even if better control software could help them gain more efficiency and save operating expenses. User education also plays a big role; the end user – building managers or engineers – may not realize the full potential of energy savings if the system is too complicated for them to understand or adjust.15
IMPLEMENTATION
The federal government should enact policies would encourage data standardization and holistic building energy management.
Congress should create an option for building operators to receive tax incentives based on documented energy reduction16 in lieu of tax incentives based on capital expenditure. This approach would encourage behavioral change and education on optimizing existing systems as well as provide additional encouragement for compliance with an expanded building energy benchmarking program. The current commercial building energy efficiency investment tax deduction, 179D,17 places the incentive on making capital investments in energy efficiency, rather than rewarding actual energy efficiencies realized.
The Department of Energy should develop an interoperability standard for building control systems and mandate that all systems in federal facilities be converted to compliant systems on an aggressive schedule. As a large user of building control systems, government adoption would require the building systems market to agree on standards and offer compatible systems. These compatible systems would then be available for non-governmental building owners, providing them choice and data portability that enable more frequent improvement and upgrade. This would also open up a space for competition and innovation in optimizing building control use and the building control market, ultimately lowering the payback period and increasing adoption.