COMMERCIAL BUILDING MATERIALS

OVERVIEW

Commercial buildings account for close to 20% of U.S. energy use, a share that’s been growing over the last 30 years.¹ Our malls, offices, schools and hospitals represent a huge opportunity for efficiency gains and carbon reduction, as they consume more than 5 million GWh of energy² and produce1,000 megatons of CO₂ equivalent annually.³ Just heating and cooling alone accounts for a third of this energy use⁴ and could be vastly improved by modernizing standards in building shells⁵ and materials. With comprehensive data, targeted investment, and government building stock adjustments, improvements to commercial building shells could eliminate the need for more than 100,000 GWh of energy use,⁶ and the need for 13 traditional coal-fired power plants.⁷ Even with the slow turnover common in building stock, changes implemented now could have significant impact over time.

ANALYSIS

The existing 81 billion sqft⁸ of commercial building stock presents unique challenges when it comes to building shell improvements. New York City’s 2012 benchmarking report, which included all buildings larger than 50,000 sqft, found that newer buildings are generally more energy-intensive than older buildings by design and use⁹. With commercial building lifetimes averaging more than 50 years,¹⁰ it is likely these newer, less efficient buildings will be in use for many more years. Although often considered difficult to retrofit, building envelopes can be improved with advances in windows, window films, roofing, insulation, and leakage detection.¹¹

New buildings can incorporate more efficient design choices into planning and construction, eliminating the need for retrofitting building shell materials and keeping operating costs low. Unfortunately, new buildings often present a principal-agent conflict – the builder is different from the owner and ultimate tenant, making the builder resistant to adding potential upfront costs that would save on long-term operating expense.¹² Building standards, both mandatory ones like ASHRAE 90.1¹³ ajnd voluntary ones like LEED,¹⁴ contain efficiency requirements but are less effective without a broad baseline of energy usage measurements against which improvements can be gauged.

Although the Energy Information Administration (EIA) estimates the overall environmental impact of commercial building energy use in the U.S.,¹⁵ there is no data directly measuring the efficiency of buildings. Voluntary benchmarking programs¹⁶ and mandates in individual municipalities¹⁷ have started to gather real world data, but neither of these gives us the standardized and comprehensive data necessary for a detailed look at the U.S. building stock. Without these data, it’s impossible to determine best practices, make the most impactful improvements, or help businesses make informed location choices.¹⁸ New York City recently found that the least efficient 2% of buildings in the city accounted for 45% of energy use.¹⁹ By identifying these buildings, New York is making cost-effective, high impact improvements that could reduce the city’s GHG emissions by 9% to 15%.²⁰ With comprehensive data, this could be applied across the U.S., cutting emissions by 200 megatons or more.²¹

IMPLEMENTATION

While buildings’ envelope improvements present unique challenges and long timescales, some current actions could start the U.S. on the path to improved large building efficiency:

Strengthen and Expand Building Energy Benchmarking

Rating and disclosure of building energy use is a market-based policy tool that provides transparency to potential owners in the case of sale and also to capital markets that may be willing to invest in the returns efficiency can provide.²² Following the lead of cities from Philadelphia to Seattle,²³ the EPA disclosure program should be extended to include all commercial properties over 25,000 sqft and all government-owned or leased properties over a 5 year ramp-up. In addition to helping investors identify new opportunities, these data can be used to ensure that federal funds invested in improving building efficiency have the largest impact.

Adopt Building Standards and Improvement Program

To further encourage and add clarity to commercial building energy use, the bipartisan Energy Savings and Industrial Competitiveness Bill of 2011²⁴ would have directed the Department of Energy to establish an official standard for non-residential building efficiency and establish a loan guarantee program for funding improvements to meet this standard.²⁵ By adopting the measure, Congress would incentivize improvement of the least efficient existent building stock and create jobs.

Lead by Example with Government Facilities

The government should use its own building stock and purchasing power to drive efficient building adoption. Federal agencies should include building envelope efficiency requirements when evaluating contracts, whether for the nearly 3 billion square feet of federal office space,²⁶ or when taking bids for Housing and Urban Development building contracts. Additionally, improving on the Better Buildings Initiative,²⁷ each governmental agency should be directed to conduct an energy audit on a regular schedule to reevaluate whether technology advances or pricing has opened up more opportunities for them to enter Energy Savings Performance Contracts. These contracts save the government operating expenses without requiring upfront funds, ultimately saving taxpayers money, creating jobs, and potentially reducing greenhouse gas emissions by 2 megatons.²⁸