According to the US Energy Information Administration, only 12% of existing commercial buildings have been built since 2003 and more than half were constructed before 1980. The median age of such buildings is around 32 years. https://www.eia.gov/consumption/commercial/reports/2012/buildstock/

Many cities and states in the US have developed goals to reduce greenhouse gas emissions, commonly by 80% from a 1990 baseline by 2050. New buildings that are certified as LEED are helpful in meeting these goals. However, the statistics above demonstrate that meeting this goal and also reducing energy usage and demand to more effectively manage the grid cannot be met unless existing buildings modernize. More utilities are developing incentives for existing buildings and municipalities laws or new codes to require existing buildings to be more energy efficient.

Incentives are a positive, but only help the bottom-line a little bit, and sometimes have strings attached. Laws are useful, but often result in building owners addressing the letter of the law and not doing all that can be helpful to be more energy efficient.

Building owners should look at modernizing their existing stock as an investment opportunity with many potential financial benefits for the following reasons:

1. Long-term, reliable energy and other cost savings. According to the Intergovernmental Panel on Climate Change (IPCC), energy savings of 50% to 75% can be achieved in commercial buildings that implement smart energy efficiency measures. Their biggest problem is aging building envelope, causing boilers and air conditioning units to work harder to develop the heat or cold lost to the aging envelope.

Since heating and cooling constitute the largest portion of energy consumption, most old buildings lose energy due to poor interiors and exteriors. Retrofitting older buildings can help with a significant reduction in energy needed to heat or cool the building.

Of course, upgrading lighting to LEDs is a sure-fire financial winner, with significant, reliable cost savings. When upgrading lighting, don’t forget to include lighting controls to keep lights off when the room is not occupied and daylighting to dim your light fixtures when sunlight is entering a room. Why pay for energy when natural light can help?

In addition, such modernizations and new technologies inevitably lead to cost savings in terms of O&M. Modern buildings with intelligent systems use 20% to 40% less energy and result in 8% to 9% lower operating expenses. https://c.ymcdn.com/sites/www.nibs.org/resource/resmgr/BSA/20140108_moa_jones.pdf

2. Meet sustainability goals. Many commercial buildings rent space to private firms that have written sustainability or climate change goals, including reductions in energy usage and/or greenhouse gas emissions. These companies develop multiple strategies to ensure meeting the goals. Working in a building that is energy efficient can keep a tenant happy or attract potential tenants which may have difficult goals to meet. Either way, an energy efficient building can put your building in greater demand (resulting in greater revenue) for your units.

3. Reliability in a world of growing energy use. More companies do more and more things to stay competitive, including, but not limited to bigger and greater data centers. It has been estimated that energy demand will rise 50% between now and 2050. Is your building able to reliably supply energy to tenants. Remember, risk may include serious incidents affecting business viability occur, which, of course, could lead to litigation. Therefore, not wasting energy and bringing in sufficient amounts for all situations is critical, and may require some modernization of the building and its wiring.

This includes automated controls, sensors, monitoring of energy use and feedback, “smart” technologies, and backup power. Being in control of energy usage and distribution puts you in a more powerful position. Are such new technologies expensive? No, they are not as automation has brought down prices. Not having modern features can be more costly to your business as a building owner.

4. Better performing business, greater demand for your space. A modern, green retrofit building with efficient energy systems has been shown to lead to improved worker performance and reduced sick time compared to companies in existing buildings that have not retrofitted appropriately.

A recent Harvard study found that worker cognitive functions improved with better indoor environmental quality and ventilation, including a 50% increase in focus, doubling in crisis response, and a tripling in information usage and strategic thinking scores. A follow-up study found positive impacts on sleep and wellness. https://green.harvard.edu/tools-resources/research-highlight/impact-green-buildings-cognitive-function

5. Rising revenue for a modern building. Continuing on these themes, providing potential tenants with the most modern technologies, reliable energy service, and beneficial working conditions will result in greater market demand. Buildings certified as energy efficient (LEED, Energy Star) are in greater demand and can charge greater rents than stodgy, inefficient buildings with not a lot of specialization to offer the tenant.

Modernizing older buildings with improved energy efficient systems appears to be expensive and a “hassle”. However, the technologies are established, have little chance of failing, and results in many positive items that will raise both the value of your property and the demand to rent space from it, raising revenue and lowering cost significantly. This can only be done, however, if retrofits are implemented intelligently, led by experienced architects and engineers.

CCES has the technical expertise to help you plan and implement smart upgrades to your existing building to gain the benefits listed here. Our experts can help you lower energy usage and costs reliably and to maximize the benefits and, with the help of incentives, minimize the payback and hasten growth. Contact us today at 914-584-6720 or at karell@CCESworld.com.