Looking to reduce costs and enhance the value of your properties? Energy efficiency upgrades can help you do both. Energy costs are a big budget item and slick new devices, such as LED lights and smart thermostats, are appealing to potential tenants. If you’re looking to save energy, begin by asking yourself these questions:
1. Are there fluorescent lamps or incandescent bulbs in common areas?
Cost-effective LED replacement options are available. LEDs are highly efficient and last much longer than conventional lights. LEDs also offer improved light quality, enhancing safety and visual appeal.
2. Do you frequently find lights on in empty spaces?
Even high efficiency lights still waste energy illuminating empty spaces. Occupancy or vacancy sensors can solve this problem by automatically turning lights on and off based on need. They’re especially effective in common areas with varying occupancy, such as restrooms, fitness rooms and laundry facilities.
3. Are hot water pipes properly insulated?
Water heating accounts for 18% of energy costs in multifamily buildings, and much of that goes to waste through unwanted heat loss. Pipe insulation is a simple and cost-effective measure for reducing energy loss and saving money.
4. Are water leaks fixed in a timely manner?
Water leaks can waste a significant amount of water and energy for water heating. For example, a showerhead leaking at 10 drips per minute wastes more than 500 gallons a year. Regularly inspect for leaks and fix them quickly. While you’re at it, install water-efficient showerheads and faucet aerators. They’ll save water while still providing a comfortable flow.
5. Are Wi-Fi enabled thermostats installed throughout your building?
Adjusting building temperatures is the simplest and most effective way to reduce energy costs. WiFi-enabled programmable thermostats add convenience and optimize savings. They also offer advanced features, such as remote control.
Commercial and residential buildings account for nearly 40% of the energy consumed in the United States. All available cost-effective, energy efficiency improvements would require roughly $279 billion in investments, resulting in more than $1 trillion in energy savings over 10 years. However, currently only 1% of all U.S. investment dollars are directed toward energy efficiency projects.
The reluctance to invest in such projects is driven by the lack of predictability in long-term returns, as well as the lack of standardization in the energy efficiency market. To address these issues, the Environmental Defense Fund (EDF) established the Investor Confidence Project (ICP).
The ICP developed ways to measure and predict energy savings so that investors are more willing to finance energy efficiency projects. The project recently introduced several energy performance protocols which standardize how projects are baselined, engineered, installed, operated and measured:
Large Commercial, for whole building (more than 150,000 square feet) retrofits greater than $1 million, with annual energy savings of more than 20%.
Standard Commercial, for whole building (up to 500,000 square feet) retrofits priced below $1 million. Projected savings cover investment cost.
Targeted Commercial, for upgrades involving a single measure, such as lighting or windows, or multiple measures costing less than $1 million and in buildings up to 500,000 square feet.
Large Multifamily, for whole building (up to 500,000 square feet) retrofits costing more than $1 million. Projected savings cover investment cost.
Standard Multifamily, for whole building (up to 500,000 square feet) retrofits costing less than $1 million. Projected savings cover investment cost.
Targeted Multifamily, for single or multiple measure projects costing under $200,000 in buildings up to 500,000 square feet.
Targeted protocols strike a balance between the need to minimize overhead for less complex projects while maintaining the necessary rigor to attract investment for smaller projects. All protocols are aimed at boosting investor confidence in the resulting savings and return-on-investment.
The EDF also developed a Quality Assurance Credential, which authorizes third-party providers to verify a project conforms to ICP protocols and certify it as an Investor Ready Energy Efficiency project. For investors, standardized projects and documentation enable efficient due diligence, faster underwriting and more reliable returns.
To overcome the small quantity and low quality of data available for evaluating investments in energy efficiency assets, the EDF’s Energy and Loan Performance Data Project collected and analyzed data about loan performance and energy savings from efficiency upgrades. With better data, loan performance is more easily and accurately predicted, making large-scale investment in building retrofits more attractive.