Trends align to save buildings millions in energy costs

By 2050, 70 percent of the world population will live in cities, a change that will add 40 percent to the current world building stock.

Because buildings can be big polluters, urbanization is also a stark reminder that economies everywhere benefit from investments in energy-efficient structures and by retrofitting inefficient, existing buildings. There’s some good news to report in that area.

For the first time since the 1973 oil embargo and subsequent energy crisis added “energy efficiency” to our everyday vocabulary, three trends are finally moving the world’s largest economy in the right direction. Financial incentives are driving this fundamental shift.

1) Households save money—by saving electricity

Americans today seem to understand just how important efficiency is in their daily lives. A recent study shows that homeowners now value ENERGY STAR-rated appliances—which have an efficiency stamp of approval from the U.S. Department of Energy—over luxuries such as a pool or a state-of-the-art sound system.

By placing a greater value on smart energy options, Americans have been using less electricity. This has, in turn, resulted in less pollution, improved health and greater households savings.

And adults aren’t the only ones getting in on the action.

Girl Scouts and their families participated in a recent youth-energy program that inspired home energy conservation measures, with up to five percent in electricity savings and three percent in gas savings as a result. In this case, educating kids helped their families save electricity.

2) Commercial buildings of all sizes go for retrofits 

A number of recently released studies indicate that commercial buildings in the U.S. are becoming more efficient with energy use per square foot dropping 12 percent between 2003 and 2012.

Growing investments in energy efficiency—through technologies such as LED lighting, heating and air conditioning upgrades, and Building Automation Systems—are driven by passionate building managers who are promoting the twin concepts of financial and social value.

Where once only larger properties tended to invest in efficiency, the small and medium-size commercial building market is now poised to grow by more than 60 percent to $38 billion by 2025.

Smaller buildings have historically had less staff and access to funding for such projects. But now, due to a widespread emphasis on energy management and its ability to improve bottom lines, these smaller buildings are also beginning to explore simple energy efficiency upgrades and more complex retrofitting opportunities.

3) Partnerships in states push for energy savings

A number of states—including Illinois, New York and California—are working on legislation that helps communities save energy. While the states’ goals vary, it’s telling that politicians, environmental groups, business leaders, and consumer advocate work together constructively to put in place energy efficiency standards.

Such efforts simply make good financial sense.

A key example of policy already generating financial and efficiency gains is a 2011 Illinois law that mandated the modernization of the state’s electric grid. It’s led to unprecedented collaboration between utilities, consumers and environmental groups.

So far, this legislation has produced groundbreaking metrics to measure the clean air benefits of smart-grid investments, as well as energy savings for commercial real estate and improved grid resiliency.

There are only wins here. While saving millions in annual energy expenses for households and businesses, improving efficiency can help cut global carbon dioxide emissions from buildings by an estimated 83 percent.

It just takes economics to get us there.


Ellen Bell manages the Environmental Defense Fund's Redefining Energy Efficiency Project, a project that develops innovative approaches that value efficiency, advanced energy management, and emerging technologies as a source of revenue. She is a former legislative aide for Chicago Alderman Ed Burke and also served as a sustainability manager for a global food manufacturer. She holds a B.A. in Political Science from Boston College and an M.A. in American Government from Loyola University, Chicago. For more information, follow EDF on Twitter @envdefensefund

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The views expressed by contributors to the Cynthia and George Mitchell Foundation's blogging initiative, "The Economic Argument for Environmental Protection," are those of the author and do not necessarily represent the views of the foundation.


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