Why Don’t More Commercial Buildings Implement Efficiency Projects?

Gita Subramony for Zondits, May 14, 2014

Energy efficiency provides opportunities for buildings to dramatically reduce their operating costs by lowering their energy bills, but why don’t more commercial buildings complete these projects? The Guardian discusses a few of the roadblocks. Many buildings engage in easy upgrades that result in high rebates and minimal payback periods; LED lighting is a prime example of this type of project. Projects that go beyond the low-hanging fruit of lighting upgrades can be more complicated and less likely to be installed. Installing HVAC upgrades and building management systems, for example, have some very real barriers. Higher costs resulting in longer payback periods dissuade building owners from doing these projects. Additionally, the lifespan of heating and cooling systems can be very long, and facility staff is unlikely to upgrade them unless they are inoperable. Split incentives are also a huge barrier to these types of projects; when tenants pay their own energy bills, landlords are unlikely to foot the bill for capital projects that result in energy savings. Additionally, the Guardian article points out that contractors, developers, and decision makers at times overestimate savings and costs, which in turn lessens the probability that future projects will be completed.

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Too big to save: why commercial buildings resist energy efficiency

While many see beauty in a city skyline lit up at night, energy efficiency researchers see wasted resources and missed opportunities. Leaving lights on in empty buildings is just the tip of the iceberg. A recent behavioral study (pdf) by the University of California Davis and the California Air Resources Board (CARB) concludes that low cost changes in building operations can save from 5% to 30% of buildings energy usage, but often these changes aren’t made.

“We know what the issues are, and we know how to solve them,” said Stephen Selkowitz, senior advisor for building science at the Lawrence Berkeley National Laboratory. It’s possible to get buildings to net zero or near net zero, but on average businesses still have a long way to go to improve efficiency, he said. “Energy use in buildings is a $400bn to $500bn a year problem.”

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