Energy efficiency has taken over in commercial and industrial buildings. It is simple to administer, as the entire building can be evaluated and the owner pays the upfront costs, but also reaps the benefits of energy cost savings and longer lasting equipment.

It is a different story for residential multifamily buildings, however. Energy is used in many different ways in a multifamily and is controlled by many different elements, not just the owner. Residents control much of the energy use of the building, such as lighting, AC, plug load, and how they are operated. For each resident to swap out more efficient lights, TVs, etc. for their current ones is not cost-effective, and doing so as a unit can lead to disputes. Similarly, building owners who wish to become more energy efficient on common energy sources, such as boiler, pipes, hall and lobby lights, elevators, and laundry equipment, are discouraged by coop or condo boards and by distribution of monetary benefits (savings go toward owner’s profits or be given to renters or unit owners in reduced rent or maintenance). And then there is building maintenance staff (“supers”), who have no training or knowledge of energy efficiency.

Therefore, multifamily buildings rarely undergo energy upgrades and tend to have older, less efficient equipment than in commercial or industrial buildings, even though they can be larger in size. This is too bad as multifamilies offer great potential for savings.

One new item that is changing the equation and encouraging investment in energy efficiency in multifamily buildings are the new energy benchmarking rules in effect in about a dozen major US cities currently. Renters and buyers now have information and can and will use such data to determine where they prefer to live. For the owner of a relatively efficient building, they have proof their property is more desirable and enables them to charge higher rents or maintenance fees. For buildings said to be relatively inefficient, it provides the confirmation needed to tackle problems and that there are many other buildings to try to emulate. There is hope out there.

Energy efficiency data, virtually completely absent from real estate evaluations 5 years ago, is now more accessible, and the appraisal community is beginning to integrate such data into their value equations. This should result in relative right-sizing the value of efficient and less efficient buildings, and encourage investment in buildings which may have many things going for it, but are inefficient energy-wise.

This is beginning to real results to conserve energy use in multifamily buildings. For example, the Interstate Renewable Energy Council (IREC) is researching an energy efficiency credential program for multifamily staff. Everyday maintenance of the physical building and equipment is a cost-effective way to save energy.

In summary, the world of multifamily buildings – when it comes to energy – is complex, with differing needs and concerns of renters and unit owners, coop and condo boards, and owners. Who will pay the costs of upgrades? Who will benefit and when? However, multifamily buildings represent an opportunity for significant energy savings. Given popular benchmarking rules where the public can see energy (and water use) ratings of buildings, there is impetus to invest toward energy efficiency.

CCES can provide the technical experience to perform an energy evaluation of your building (multifamily or not) and develop cost-saving strategies to reduce energy use and peak demand saving you not only significant energy costs, but also improving the value of your building and reducing your O&M costs. Contact us today with any questions at 914-584-6720 or at karell@CCESworld.com.