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Wendy Fok’s Blog

Less is More: A "How-To" Guide to Saving Energy and Money in Commercial Office Buildings

Wendy Fok

Posted November 26, 2012 in Green Enterprise

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In the U.S., over $20 billion a year is spent on energy use in commercial office buildings.  With tenant spaces responsible for more than half of a commercial office building’s total energy use, this area is fertile ground for reducing energy use and costs. 

To date, attention has mainly focused on non tenant-related building energy use when looking for savings, leaving a considerable amount of money on the table.  When building owners and tenants work together, there is greater potential to optimize energy performance, helping to lower energy bills, while providing more comfortable spaces. 

The barriers that have prevented broader collaboration and implementation are due in part to challenges overcoming the split incentive issue (where a building owner pays for capital investments, and tenants pay for operational expenses thereby misaligning the savings benefit from energy improvements), a lack of economic and energy use data, and the absence of a clearly defined collaborative process to assist tenants and building owners in analyzing costs and benefits of energy saving strategies.

To address these challenges head on, NRDC’s Center for Market Innovation launched the High Performance Tenant Demonstration Project,, which aims to accelerate demand for high performance tenant spaces in the commercial office market by demonstrating their economic benefits.  From the first set of tenant projects, we have found that an optimized set of energy performance measures has the potential to deliver 30-50% energy savings with a 3-5 year payback on modest incremental costs compared to a standard code compliant or business as usual plan.

A year after initiating the first tenant demonstration project, CMI has released a set of open-source resources for the market to adopt an economic analysis of energy saving measures in commercial buildings. Energy Performance Opportunities in Commercial Office Buildings and Energy Optimization Guide are first of a kind resources accompanied by a set of easy to use tools and templates.  These resources articulate the economic and competitive advantage benefits from when a tenant begins site selection to when a tenant occupies a space, providing a “how-to” guide to help achieve a high performance tenant space, and all of the benefits that come with it. 

For those seeking to reduce energy use in commercial office buildings, the project resources provide a proven roadmap for how to do so, whether it’s in an individual tenant space, multiple spaces within a building, a portfolio of spaces across buildings, or an entire city. 

The scalability of the project process is already gaining attention and informing complimentary initiatives, including New York City’s Mayor’s Carbon Challenge to Commercial Office Tenants, Chicago’s Commercial Buildings Initiative, and Real Estate Roundtable’s tenant recognition energy effort with the Department of Energy and the Environmental Protection Agency.  Together with the growing adoption of energy disclosure and benchmarking requirements, market-driven action like this will compound the demand for energy performance improvements in the commercial office market.

It is estimated that the green construction market will reach $122 billion in 2015, up from $58 billion in 2011, generating $4 billion a year in design revenue for architects and engineers.  With the demand for enhanced energy performance and more comfortable work environments stronger than ever, building industry experts who are able to present the business case of making energy performance improvements will serve to gain on this trend.  Whether you are a building owner, broker, tenant, architect, engineer, or contractor, CMI’s High Performance Tenant Demonstration Project resources present how to capture your share of the economic opportunity.  In doing so, both the bottom line and environment are better for it.

The resources are the first release in a planned set of three, embodying the lessons learned from integrating energy performance and return on investment quantification into the standard design and construction process.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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