Energy Disclosure & the New Frontier for American Jobs
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Transcript of Energy Disclosure & the New Frontier for American Jobs
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7/31/2019 Energy Disclosure & the New Frontier for American Jobs
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Building EnergyTransparency
ENERGYDISCLOSURE& THE NEW
FRONTIER FORAMERICAN JOBSby Andrew C. Burr
Institute for Market TransformationMarch 2012
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urprisingly, the answer isght in front of us. New laws inw York City, San Francisco and other large
es requiring energy perormance disclosure
buildings have the potential to become a
t century engine or job creation and signi-
ntly improve the course o Americas energy
ure.
As a Silicon Valley venture capitalist, I
ould believe that technology will rescue our
onomy. Ater all, I spend my days searching
the next big thing: Hybrid vehicles, smart
hnologies, new sources o energy and the
e. Sometimes called clean tech, these are
breakthroughs that could reduce our ad-
tion to oreign oil and create jobs.
But will technology alone really creates? I worry that many existing technologies
languishing, unused. For example, in com-
rcial and industrial buildings, smart lights
d smart motors can reduce electricity con-
mption by more than 50 percent. Yet, even in Caliornia, these money-saving
hnologies are rarely used. My enthusiasm as an investor is muted when last
ars big innovation is collecting dust on the shel.
This is troubling. Why invest in new technologies when no one is using
existing money-saving technologies? I energy-saving products dont sell,
s bad news or the environment and terrible news or American workers. I
oney-saving innovations sit on the shel, the unemployed sit at home.
Economics 101 says when a technology saves money, it will be used. Not so
in my experience. Amid the excitement about clean
technology, the bigger problem is: How to motivate
the use o existing energy-saving products.
Some American cities are solving this motiva-
tion problem with a novel new idea: Grade buildings
based on how much energy they use and publish the
scores on the internet.
Brilliant in its simplicity, public disclosure
o building energy consumption will start a stam-
pede to upgrade buildings motivating the good
buildings to achieve higher levels o eciency and
prompting the laggards into action. Using the na-
tionally accepted ENERGY STAR perormance
scoring system which grades buildings rom 1 to
100 and is based on actual utility bills an anemic score o 17 in a class A
Manhattan oce tower will generate action: An energy auditor will be hired,
meters installed, lighting ungraded, ans and motors tuned, and old rerigera-tors replaced. The ENERGY STAR score o 17 becomes 77. New jobs will be cre-
ated and the building owners and tenants will spend less on their utility bills.
Under Mayor Michael Bloombergs direction, New York City is now im-
plementing a public disclosure law or its largest commercial and multiam-
ily buildings. Washington, DC, and San Francisco are ollowing close behind.
San Franciscos situation is noteworthy because its regulation was spearheaded
by large property owners who had grown weary o green-rating schemes that
sometimes give top honors to very wasteul buildings and usually ail to recog-
nize the most ecient buildings.
The owner o one iconic building in San Francisco discovered his building
had an ENERGY STAR score o 1, the lowest on the scale o 100. High utility
bills had been ignored in this San Francisco landmark, but the threat o public
Foreword
We have entered a new era o constrained spending, highnemployment and complex political turmoil, yet the question onveryones mind is simple: How do we create jobs?
disclosure nally inspired an energy m
In each o these cities, building
no longer ask what is the cheapest air
or the cheapest light xture, but rathe
I get my building to an 80 or 90? Ex
become the goal. And as building ow
smart thermostats, smart lights and
jobs will be created.
Public disclosure o commercial
ergy consumption will unleash the ma
capitalism. Eventually, disclosure sho
the law across America. In the meantim
ies should ollow the leadership o New
San Francisco and Washington, DC. P
sure will motivate millions o energy
and employ many thousands o skille
workers. With no subsidies, these citie
secure Americas energy uture.
Elton Sherwin is a Silicon Valley vent
and the author o two books, Addicted to
The Silicon Valley Way. The Senior Ma
tor at Ridgewood Capital, he serves on
fve private companies, including NR
which develops non-electric hybrids.
Ledby MayorMichaelBloomberg,New York
Cityhas adopted sweepingbuilding energy
transparencyrequirementsthataectapproxi-
mately16,000o thecityslargestcommercialand multiamily residential properties. Busi-
nessleadersinNew Yorkcreditthis initiative
orexpandingthe marketor energy-ecient
productsandservicesandcreatinglocaljobs
improvingbuildingoperations.
y Elton Sherwin
uilding Energy
ansparency
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16,000Number o commercial
and multiamilyproperties required toannually benchmark and
publicly disclose energyperormance under thecitys Local Law 84.
By theNumbers: Howtransparencyhas transormedbusiness in NewYork Cityinthepast 18months
The New Frontier orAmerican Jobs
We have long known that
improving the energy eciencyo Americas buildings canuel economic growth in localcommunities across the country.
Reducing energy consumption in our oces, malls, schools, apart-
ment buildings and other large structures creates high-paying jobs that
will ne ver be exporte d and puts dollars back in the poc kets o business-
es and amilies. Most o the existing buildings in American cities were
built decades ago and will live or generations to come beore they are
replaced. By investing in our past, we can reinvest in our uture.
Our cities are up to the challenge. Innovative energy disclosure rules
adopted by several o Americas largest cities are shepherding in a new era
o energy awareness and transparency in ex isting buildings. Simple yet
powerul, these rules are uncovering energy-savings opportunities that
have gone unnoticed or years by building operators and businesses, un-
locking market-driven demand or energy-ecient products
workers including engineers, acilities managers, energy au
tainability consultants, sotware developers, architects a nd co
workers. Bet ter still, this pro-bu siness env ironment is emerg
public investments or subsidies, proving that job creation an
sponsibility can go hand-in-hand.
This report proles just a ew o the many business lead
day are leveraging greater energy transparency to do more b
create real jobs by controlling energy costs or businesses and
With similar stories waiting to be told in scores o commun
the country, this new rontier or American jobs is well within
uilding Energy
ansparency
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uilding Energy
ansparency
Competingto Use Less
There is intense competitionmong automakers to sell vehicleshat cost us less at the pump.
75 millionSize in square eet o the combined portolios onew real estate clients at Ecological, a locally basedsustainability services rm.
By theNumbers: Howtransparencyhas transormedbusiness in NewYork Cityin thepast 18months
Food companies compete or our appetites by slashing calories and using
althier ingredients. But imagine a world where cars and trucks didnt have
l economy stickers, and not a single snack or beverage carried a nutritional
el. Without that inormation, there would be little competition among man-
cturers to make uel-ecient vehicles or healthier oods and little demand
them because nobody would know the dierence.
For decades, nobody has known the dierence between an energy-e-
ent building and an energy-inecient building. Companies that can help
sinesses reduce energy usage and utility bills have struggled in a marketplace
ere inormation about building energy consumption is virtually nonexistent.
Thats why these companies are welcoming building energy transpar-
cy with open arms. They know that better inormation means more market-
ven demand and competition or better buildings. It means more private
estment channeled into improving building operations, training workers,
nducting energy audits, retuning mechanical systems and upgrading equip-
nt. And that means more work improving American buildings and more
merican jobs.
40Expected number o buildinenergy improvement projecexecuted this year by FS Enelocally based multiamily enmanagement rm, up rom projects in 2010.
By theNumbers: Howthas transormed businesCityin thepast 18month
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Proles
cological | www.ecologicalgroup.com
ndsay Napor McLean, Chie Operating Ocer
More than 400 new clients covering 75 million SF in New York City in
past 12 months as a result o Local Law 84 and other Greener, Greater
Buildings Plan laws
The Greener Greater Buildings Plan has spurred the New York market
to interest and activity around energy eciency. As the benchmarking
process was completed or the rst year o compliance in 2011 and build-
ings were able to see how their usage stacks up, we saw a signicant rise
in the number o clients that are interested in the actions they can take to
improve their buildings eciency, and their bottom lines. The transpar-
ency that GGBP and Local Law 84 bring to the market around energy use
is having the intended impact and sharpening the ocus on ceasing to
waste expensive resources. We anticipate that this trend will continue in
the New York market with each year o compliance reporting.
rig
Energy Print | www.energyprint.com
Mike Williams, Chie Operating Ocer
Doubled subscription base and added approximately 2 FTEs as a result
o Local Law 84 and Seattles benchmarking ordinance. Added six value-
added resellers to the companys network, enabling local revenue to con-
tractors and consultants
The majority o building owners do not have visibility to the energy per-
ormance o their portolios, nor do they understand that energy is one o
their largest controllable operating expenses. ENERGY STAR is the right
rst step by bringing awareness to energy usage, however it doesnt give
owners actionable inormation on how to improve. Thats why compli-
ance with benchmarking laws is important to us. We tell clients, I you
have to do it, get something out o it. We use benchmarking ordinances
and ENERGY STAR administration as a catalyst to drive real change,
helping owners and managers operate more protable buildings.
10-15Number o employees hired by Steven Win
Associates, a high-perormance buildingconsulting rm, to meet growing client demor energy efciency services.
By theNumbers: Hhas transormed busCityin thepast 18mo
Bright Power | www.brightpower.com
Jefrey Perlman, president and ounder
4 FTEs added and maintained as a result o Local Law 84 and other
Greener, Greater Buildings Plan laws
Local Law 84 is a really positive orce. The act that we have competitors
that didnt exist beore shows that its growing the market. Our pitch to
our customers is you have to do the benchmarking, and ENERGY STAR is
good but doesnt give you everything you need, which is where our Ener-gyScoreCards sotware comes into play. Our client base in New York City
is a lot bigger than it was beore Local Law 84 was adopted. Its helped us
gain traction, especially in the market rate housing sector, which doesnt
have the same targeted incentives as aordable housing. The law has
helped us get in the door with owners and oer them something they
now need - a must have rather than a nice-to-have.
Sustainable Real Estate Solutions | www.srmnetwork.c
Brian McCarter, chairman, CEO and ounder
Increased New York City client base by more than 30 percen
additional account management sta as a result o Local Law
Market evidence continues to mount that benchmarking an
regulations are achieving their public policy goal to stimulate building owners and managers to urther invest in energy e
industry best practice is emerging in markets with disclosure
where the rst step is a desktop benchmarking analysis inclu
and public benchmarking database resources, ollowed by an
ergy audit to identiy energy conservation measures and relate
cial metrics or poorly perorming buildings.
uilding Energy
ansparency
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uilding Energy
ansparency
RatingAmericasBuildings
Case StudyFS Energy / FirstService Corp. / www.FirstService.com
For a compelling example o how transparency in NewYork Citys building stock is already changing businesusual, look no urther than FS Energy (FSE).
This locally based building energy management compa-
ny, a division o the real estate services rm FirstService Corp.
(NASDAQ:FSRV; TSX: FSV), has grown rom less than three
employees in 2009 to a sta o more than 10 in 2012. Interest
in building energy improvements across the companys man-
aged portolio o 400 multiamily cooperatives, condominiums
and rental properties is skyrocketing. With less than 10 retrot
projects completed rom 2009 to 2010, FSE now has 30 retrot
projects in progress and expects to have 40 projects completed
by the end o 2012.
The secret to success is benchmarking and transpar-
ency, says David Diestel, senior vice president o operations or
FirstService Residential Management. FSE last year developed
its own energy scorecard, known as the Building Energy Rat-
ing Guide (BERG), or all o its New York City properties and
watched as client demand or greater energy eciency began to
steadily increase.
As recently as a year ago, FSEs typical clients did not
have any idea o their buildings perormance or how it per-
orms relative to other properties, Diestel said, making it
nearly impossible to interest them in eciency imp
But in 105 client presentations since the company
ing scorecards in mid-2011, 92 presentations resu
no-cost eciency projects at a property, and 38
nancial commitments or building energy asses
could lead to retrot projects. Our own benchm
energy disclosure eorts in New York, concurre
citys Local Law 84, have proved to us that these
help educate and motivate owners to improve pe
Diestel said.
Helping spur this transormation is an innova
ing package oered by FSE where clients pay o
ciency upgrades through savings on utility bills
work is New York Citys energy transparency law,
FSE another selling point to engage clients. Accor
estel, Having legislative eorts support FSEs goa
carbon and cost in properties increased client aw
urgency to become educated and consider investing
We ully expect that public disclosure will motivat
urther improve perormance.
Major cities across theountry are movingwitly to make theiruildings more energyransparent.
New York City, San Francisco and the District o
lumbia now require the energy perormance o large
ldings to be rated and publicly disclosed, while other
es and several states require building owners to re-
se perormance inormation to prospective renters,
vestors and lenders. In all, current transparency re-
rements could aect more than 4 billion square eet
commercial and multiamily residential foor space
nually, more than twice the volume o commercial
ace that has been LEED certied.
To generate building energy perormance metrics,
nsparency rules leverage the use o the governments
ERGY STAR Portolio Manager benchmarking tool.
is simple and ree sotware rates the energy peror-nce o buildings (a process known as benchmark-
,) creating a standard measure o the energy e-
ency o a building compared to similar buildings.
day, ENERGY STAR sotware is the most widely used
nchmarking program or commercial buildings in the
untry.
92 resulted in lowno-cost eciencimprovements
38resul ted in fncommitments ocomprehensiveeassessments
2009 2010 2011 2012
30
inprogress,
40
executed(exp
ected)
40
30
20
10
105 client presentations
David Diestel
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uilding Energy
ansparency
A Foundationor the Future
As the businesseaders profled in thiseport are makinglear, greater buildingnergy transparency isxpanding the marketor energy eciencyervices and creatingew jobs.
But as many o them note, benchmarking and transpar-
cy are a beginning, not an end. Creating long-term jobs im-
oving the energy eciency o our buildings will depend on
h innovation and new technologies rom entrepreneurs and
rt-up companies; the availability o capital to perorm up-
des; public-private partnerships to train new workers; and
ost o other big initiatives and ideas.By simply adding energy transparency into the real estate
rketplace, we can build a solid oundation or that uture
ed on demand, competitiveness and inormation allow-
a smarter America to nally begin tapping into decades
missed opportunities to improve our buildings.
280Number o buildings benchmarked by US EGroup, a locally based building energy manasolutions rm, or compliance with the citytransparency requirements.
By theNumbers: Howtransparencyhas transormedbusiness in NewYork Cityin thepast 18months
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uilding Energy
ansparency
Proles
teven Winters Associates | www.swinter.com
rica Brabon, senior consultant
Added more than 10 people in the New York City market as a result o
Local Law 84 and other Greener, Greater Buildings Plan laws
People are interested in what the benchmarking number means. Our
hook or clients is that you cant understand your buildings perormance
until you measure it. Until you understand perormance, you cant make
a decision about investments. Its a matter o explaining to people that its
not just about compliance, but what you can do to improve. Our business
is growing a lot and we anticipate it will continue to grow. We already
have more work to do than we have people or.
US Energy Group | www.use-group.com
Warren Zaretsky, vice president o marketing
Benchmarked approximately 280 buildings or Local Law 84 compliance
For years weve been telling people, We can save you money, and ourprospective clients tell us to prove it. Its much easier to prove i you have a
baseline. Thats the starting point. We see Local Law 84 as a great help to
our company and the environment.
Sustaining Structures | www.sustainingstructures.com
Theresa Stroisch, CEO, and Kevin Dingle, president
30-50 percent client growth and potential to triple sta over the next ew years
as a result o the Seattle benchmarking ordinance
The Seattle benchmarking ordinance is creating and sustaining real green
jobs. Companies like ours are building relationships with clients because com-
pliance is just a starting point. We expect the clients that we have now to be
long term clients. Theresa Stroisch
When an owner or manager sees a benchmarking score might be lower than
expected, theyre a little more receptive to improvements to bring the score up,
which in turn lowers their utility costs. It makes it real world or them when
they see the benchmarking numbers. Kevin Dingle
Advanced Energy Innovations | www.nrgadvocate.com
Ken Patterson, senior energy advocate
Increased sta by 50 percent and nearly doubled revenue as a
Los Angeles Commercial Building Partnership, a voluntary
benchmark, audit and improve buildings.
Whether it is required or not, benchmarking is always our r
clients. Its where we get enough data to see where the next lot o owners are just throwing darts when it comes to impro
perormance. Benchmarking tells us where the bullseye is.
30%Increase in New York City client base atSustainable Real Estate Solutions, an energymanagement sotware provider.
By theNumbers: Howtranspaencyhas transormed businessNewYork Cityin thepast 18mo
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Building Energy
Transparency
About the Institute for Market TransformationThe Institute or Market Transormation (IMT) is a Washington, DC-based nonprot
organization promoting energy efciency, green building, and environmental protection in
the United States and abroad. IMTs work addresses market ailures that inhibit investment in
energy efciency and sustainability in the building sector.
About BuildingRating.orgA joint project o the Institute or Market Transormation and the Natural Resources Deense
Council, BuildingRating.org is the worlds most comprehensive resource dedicated to energy
perormance rating and disclosure policies or homes and commercial buildings. BuildingRating.
org eatures an online library o building energy perormance rating and disclosure resources,
including inormation on policies, programs, impact analyses, and rating systems and tools. It
launched in 2011 to acilitate the sharing o global rating and disclosure policy intelligence and
best practices.
www.imt.org
www.buildingrating.org
Report prepared by the Institute or Market Transormation,
January 2012
Graphic design by Jessie Despard
DisclaimerThe views and opinions expressed in this report are the responsibility o IMT and do not
necessarily represent the views and opinions o any individual, government agency, ororganization mentioned in this report
For more inormation about this report, please contact:
INSTITUTE FOR MARKET TRANSFORMATION
1776 MASSACHUSETTS AVE. NW
SUITE 815
WASHINGTON, DC, 20036
(202) 525-2883