What exactly is a ‘zombie building’? “Toadstools?” Or M&V? What’s a roof pack and what’s a RTU?
Each of these questions was raised last week at a workshop convened by Rocky Mountain Institute and the Northwest Energy Efficiency Association in Boulder. The Energy Efficiency and Capital Markets workshop included participants from banks, energy service companies, commercial real estate firms and utility related organizations who came together to discuss the key financing constraints for deep energy retrofits in smaller scale buildings (less than 50,000 square feet).
Yet before participants could discuss the key issues, the group had to understand each other’s distinct language and vocabulary. As Mike Ballantyne of Thornton Oliver Keller said, “First learn the language, then learn the math. Then it starts making sense.”
For the record, a zombie building has an owner lacking the necessary capital to fund regular tenant improvements. A toadstool is a small, stand-alone, failing building. “M&V” refers to measurement and verification, which is the process of calculating energy savings and is often required for energy retrofits. And roof packs, also known as RTU’s or “roof top units” are roof mounted air conditioning and ventilation units, typically used for smaller buildings. As the workshop progressed, these language questions faded and the larger issues emerged.
With well-aligned motives and complementary skill sets, RMI and NEEA are partnering to address ways to dramatically increase the energy efficiency of existing buildings.
Limited financing options and a shortage of capital are a significant roadblock to energy retrofits in the small- to mid-size commercial buildings sector—which comprises 90 percent of all commercial buildings and over 50 percent of the total floorspace—forcing a reliance on an owner’s personal credit to finance the deal. According to a report from Johnson Controls, only 25 percent of small building owners plan to make energy efficiency improvements.
“The mainstream market for deep energy retrofits has a low apparent return on investment for owners and is an extraordinary financing challenge,” said Peter Wilcox, NEEA’s senior manager for the commercial sector. “A phased approach to deep energy retrofits may be the best and only—at least at the early stage—strategy to successfully engage and move this market segment.”
Yet doing so, Wilcox continued, will require a highly creative and potentially complex approach to whole building integration and synergies with system-envelope controls and end-users.
The group brought strong personalities and decades of experience in the finance industry with significant understanding of retrofit and equipment financing. Despite the minor language barriers, the group brainstormed opportunities for RMI and NEEA to educate financial professionals, value energy efficiency more accurately, and develop new business models tailored to smaller buildings.
After two days of concerted effort, the group came away with a number of strategies and programs to help owners, tenants, brokers, auditors and others understand and initiate deep retrofit projects.
For RMI, retrofitting existing smaller commercial buildings helps support the RetroFit initiative which aims to encourage the retrofit of the U.S. commercial building stock to use, on average, at least 50 percent less energy by 2050 via the wide adoption of deep energy retrofits that save far more energy, even more profitably, than today’s normal practices.
“We’ve made a great first step with NEEA to address the financial challenge facing the small-building owner,” said Victor Olgyay, buildings principal at RMI. “But we still have a great deal of work to do. And our ongoing partnership with NEEA will address the distinct need for deep energy retrofits in small commercial buildings.”
To learn more about RMI’s RetroFit initiative, visit RetroFit Depot, a premier online resource offering case studies, free energy modeling tools and a step-by-step overview of the deep retrofit process to help commercial building owners and managers, and energy service practitioners, profitably pursue deep energy retrofits.