By Diane Moss
From the August 2017 Issue
Net zero commercial buildings, which use on-site or locally procured renewable resources to generate as much energy as they consume, reportedly doubled1 in the United States between 2014 and the top of 2017. Residential projects similarly shot up 82%2 last year, mostly in the multi-family sector. Driving this growth are industry leadership, technology market evolution, construction workforce development, policies, and consumer awareness. But perhaps the biggest factor is that the buildings are simply better. They cost less to operate, have higher valuations, provide healthier environments, and are potentially more resilient to grid outages.
The building sector uses 40% of the nation’s energy, making it the biggest energy consumer in the U.S. Matt Eggers, vice president at Yardi Energy, a building management software company, shared at the 2017 Pathways to 100% Renewable Energy Conference that facility managers have tended to think about the high cost of energy use like death and taxes: an onerous inevitability. But that’s changing. Efficiency and renewable energy technologies are helping facilities take control and reign in expenses.
Software solutions to manage building energy usage alone can bring down energy costs 15-20%, and with energy making up 30% of typical facility expenditures, lowering that not only saves on utility bills, but also increases the value of the building and rental rates—by as much as 5%, data shows. Add that up, and the result, says Eggers, is net income per square foot of about $3, along with a building value increase of about $40/square foot.
Project manager Michael Strong of Pankow Builders, a commercial construction company in California that specializes in sustainable building, emphasizes that user-friendly solutions like this are key. Sharing the panel with Eggers, he conveyed that even among environmentalists, people get “compassion fatigue.” Energy upgrades can’t just be something to add to the list of “shoulds.”
Fortunately, advanced energy solutions are becoming easy and economical enough to often prevent a choice between duty and desire. Even some of the historically most expensive options like solar power have dropped 63% in price3 over the past five years—19% last year alone—with utility scale solar falling to less than 3 cents per kilowatt hour in some sunny locations. Such price plunges have led total solar capacity installed by corporations4 in the U.S. to reach one gigawatt last year, and with dozens of these companies committed to 100% renewable power procurement, that trend is set to continue.
Costs are lowering as well for other clean energy technologies, like LED lighting—down a whopping 90% from 2008-2015. According to Goldman Sachs5, LEDs are now the cheapest lighting option.
Battery prices are also falling, unleashing the potential of non-fossil on-site energy storage. For example, the cost of new lithium-ion battery packs dropped 73%6 since 2010. The maturing electric vehicle market is also starting to yield cheaper used batteries that are no longer useful to cars but still good for storage. These “second-life” batteries are being deployed, for example, by General Motors7 at its net zero energy Milford facility, as part of the company’s plan to achieve 100% renewable electricity procurement.
Gundersen Health Systems8 in Wisconsin offers another look into how to get to net zero with innovative technologies. The company designed an energy system combining conservation, on-site geothermal energy, solar photovoltaics, solar hot water, and biomass, as well as local wind power and biogas to achieve net zero energy most of the time for its network of hospitals, medical clinics, and nursing homes. They’re saving more than $3 million a year and helping to protect the health of its community by using cleaner energy sources.
For clues on what the future holds, one place to look is the University of California, which is working to reach carbon neutrality on all its campuses by 2025. For example, UC Irvine is using excess electricity from their solar panel installation to make hydrogen, which is then used to decarbonize the gas that powers the campus’ combined cycle gas plant. This emerging technology, called “power to gas,” helps integrate greater amounts of onsite renewable generation, as well as lower campus demand charges. The renewable hydrogen can also be stored in tanks and used to fuel hydrogen fuel cell vehicles.
As energy systems undergo transformation, facilities are at the forefront of opportunity. There are increasing chances to go from passively consuming to actively conserving and producing energy, which bodes well both for the environment and the facility balance sheet.
Moss is founding director of the Renewables 100 Policy Institute in Santa Monica, CA. She is an independent energy and air quality policy and business consultant.
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