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"It's a whole new way of thinking about solar energy," says startup CEO about using transparent solar cells on buildings and electronics.
Duane Tilden's insight:
With the help of organic chemistry, transparent solar pioneers have set out to tackle one of solar energy's greatest frustrations. Although the sun has by far the largest potential of any energy resource available to civilization, our ability to harness that power is limited. Photovoltaic panels mounted on rooftops are at best 20 percent efficient at turning sunlight to electricity.
Research has boosted solar panel efficiency over time. But some scientists argue that to truly take advantage of the sun's power, we also need to expand the amount of real estate that can be outfitted with solar, by making cells that are nearly or entirely see-through.
"It's a whole new way of thinking about solar energy, because now you have a lot of potential surface area," says Miles Barr, chief executive and co-founder of Silicon Valley startup Ubiquitous Energy, a company spun off by researchers at Massachusetts Institute of Technology and Michigan State University. "You can let your imagination run wild. We see this eventually going virtually everywhere."
Invisible Spectrum Power
Transparent solar is based on a fact about light that is taught in elementary school: The sun transmits energy in the form of invisible ultraviolet and infrared light, as well as visible light. A solar cell that is engineered only to capture light from the invisible ends of the spectrum will allow all other light to pass through; in other words, it will appear transparent.
Organic chemistry is the secret to creating such material. Using just the simple building blocks of carbon, hydrogen, oxygen, and a few other elements found in all life on Earth, scientists since at least the early 1990s have been working on designing arrays of molecules that are able to transport electrons—in other words, to transmit electric current. [...]
Harvesting only the sun's invisible rays, however, means sacrificing efficiency. That's why Kopidakis says his team mainly focuses on creating opaque organic solar cells that also capture visible light, though they have worked on transparent solar with a small private company in Maryland called Solar Window Technologies that hopes to market the idea for buildings.
Ubiquitous Energy's team believes it has hit on an optimal formulation that builds on U.S. government-supported research published by the MIT scientists in 2011.
"There is generally a direct tradeoff between transparency and efficiency levels," says Barr. "With the approach we're taking, you can still get a significant amount of energy at high transparency levels."
Barr says that Ubiquitous is on track to achieve efficiency of more than 10 percent—less than silicon, but able to be installed more widely. "There are millions and millions of square meters of glass surfaces around us," says Barr. [...]"<
the mosaic centre for conscious community and commerce is nearly ready for occupancy, which could make it the most northerly net-zero structure on the planet.
Duane Tilden's insight:
>" [...] The Edmonton centre's designers and builders are hoping that others can learn from the project that sustainable design doesn't have to be costly or time consuming – so much so that they have made the contract, calculations and drawings available to anyone.
The City of Edmonton said the Mosaic Centre will be the world's most northerly commercial building to achieve net zero status, the city's first designated LEED platinum building, the first in Alberta to be petal certified by the Living Building Challenge and Canada's first triple bottom line commercial building.
Once completed, the new 30,000 square foot building will include photovoltaic panels that will cover much of the roof.
It will also have LED lighting designed with a time-clock/daylight controller to meet minimum light levels and a geo-exchange system which will draw heat in winter and coolant in summer.
The 32 bore hole geothermal system reduced the size of the system by 40 kW, saving about $150,000.
It was built 25 per cent ahead of schedule and five per cent under budget.
HKA architect Vedran Skopac, who worked on the project, said it was done to prove to the industry that complex, sustainable buildings can be delivered on time, on budget and without animosity between the parties.
He said the key to this all started with using Integrated Project Delivery (IPD).
The model emphasizes collaboration at an early stage and encourages all the participants to use their talents and insights throughout the different stages for best results.
"It goes all the way down to the end of the line of the tradesmen," Skopac said.
"We invested so much in designing the process, and training and making everyone a leader."
Skopac said a major influence on designing the actual structure was creating collision spaces, or places where building residents would be forced to meet and interact.
Skopac also wanted to influence sustainable behavior, like making windows easy to operate and open rather than using air conditioning, and making natural light penetrate deep into the building rather than encourage residents to turn on lights. [...]"<
Life-cycle cost analysis (LCCA) is a method for assessing the total cost of facility ownership. It takes into account all costs of acquiring, owning, and disposing of a building or building system. LCCA is especially useful when project alternatives that fulfill the same performance requirements, but differ with respect to initial costs and operating costs, have to be compared in order to select the one that maximizes net savings.
Duane Tilden's insight:
DESCRIPTIONA. Life-Cycle Cost Analysis (LCCA) Method
The purpose of an LCCA is to estimate the overall costs of project alternatives and to select the design that ensures the facility will provide the lowest overall cost of ownership consistent with its quality and function. The LCCA should be performed early in the design process while there is still a chance to refine the design to ensure a reduction in life-cycle costs (LCC).
The first and most challenging task of an LCCA, or any economic evaluation method, is to determine the economic effects of alternative designs of buildings and building systems and to quantify these effects and express them in dollar amounts.
Viewed over a 30 year period, initial building costs account for approximately just 2% of the total, while operations and maintenance costs equal 6%, and personnel costs equal 92%.
There are numerous costs associated with acquiring, operating, maintaining, and disposing of a building or building system. Building-related costs usually fall into the following categories:Initial Costs—Purchase, Acquisition, Construction CostsFuel CostsOperation, Maintenance, and Repair CostsReplacement CostsResidual Values—Resale or Salvage Values or Disposal CostsFinance Charges—Loan Interest PaymentsNon-Monetary Benefits or Costs
Only those costs within each category that are relevant to the decision and significant in amount are needed to make a valid investment decision. Costs are relevant when they are different for one alternative compared with another; costs are significant when they are large enough to make a credible difference in the LCC of a project alternative. All costs are entered as base-year amounts in today's dollars; the LCCA method escalates all amounts to their future year of occurrence and discounts them back to the base date to convert them to present values. [...]Energy and Water Costs
Operational expenses for energy, water, and other utilities are based on consumption, current rates, and price projections. Because energy, and to some extent water consumption, and building configuration and building envelope are interdependent, energy and water costs are usually assessed for the building as a whole rather than for individual building systems or components.
Energy usage: Energy costs are often difficult to predict accurately in the design phase of a project. Assumptions must be made about use profiles, occupancy rates, and schedules, all of which impact energy consumption. At the initial design stage, data on the amount of energy consumption for a building can come from engineering analysis or from a computer program such as eQuest.ENERGY PLUS (DOE), DOE-2.1E and BLAST require more detailed input not usually available until later in the design process. Other software packages, such as the proprietary programs TRACE (Trane), ESPRE (EPRI), and HAP (Carrier) have been developed to assist in mechanical equipment selection and sizing and are often distributed by manufacturers.
When selecting a program, it is important to consider whether you need annual, monthly, or hourly energy consumption figures and whether the program adequately tracks savings in energy consumption when design changes or different efficiency levels are simulated. [...]Operation, Maintenance, and Repair Costs
(Courtesy of Washington State Department of General Administration)
Non-fuel operating costs, and maintenance and repair (OM&R) costs are often more difficult to estimate than other building expenditures. Operating schedules and standards of maintenance vary from building to building; there is great variation in these costs even for buildings of the same type and age. It is therefore especially important to use engineering judgment when estimating these costs.
Supplier quotes and published estimating guides sometimes provide information on maintenance and repair costs. Some of the data estimation guides derive cost data from statistical relationships of historical data (Means, BOMA) and report, for example, average owning and operating costs per square foot, by age of building, geographic location, number of stories, and number of square feet in the building. The Whitestone Research Facility Maintenance and Repair Cost Reference gives annualized costs for building systems and elements as well as service life estimates for specific building components. The U.S. Army Corps of Engineers, Huntsville Division, provides access to a customized OM&R database for military construction (contact: Terry.L.Patton@HND01.usace.army.mil).Replacement Costs
The number and timing of capital replacements of building systems depend on the estimated life of the system and the length of the study period. Use the same sources that provide cost estimates for initial investments to obtain estimates of replacement costs and expected useful lives. A good starting point for estimating future replacement costs is to use their cost as of the base date. The LCCA method will escalate base-year amounts to their future time of occurrence.Residual Values
The residual value of a system (or component) is its remaining value at the end of the study period, or at the time it is replaced during the study period. Residual values can be based on value in place, resale value, salvage value, or scrap value, net of any selling, conversion, or disposal costs. As a rule of thumb, the residual value of a system with remaining useful life in place can be calculated by linearly prorating its initial costs. For example, for a system with an expected useful life of 15 years, which was installed 5 years before the end of the study period, the residual value would be approximately 2/3 (=(15-10)/15) of its initial cost.Other Costs
Finance charges and taxes: For federal projects, finance charges are usually not relevant. Finance charges and other payments apply, however, if a project is financed through an Energy Savings Performance Contract (ESPC) or Utility Energy Services Contract (UESC). The finance charges are usually included in the contract payments negotiated with the Energy Service Company (ESCO) or the utility.
Non-monetary benefits or costs: Non-monetary benefits or costs are project-related effects for which there is no objective way of assigning a dollar value. Examples of non-monetary effects may be the benefit derived from a particularly quiet HVAC system or from an expected, but hard-to-quantify productivity gain due to improved lighting. By their nature, these effects are external to the LCCA, but if they are significant they should be considered in the final investment decision and included in the project documentation. See Cost-Effective—Consider Non-Monetary Benefits.
To formalize the inclusion of non-monetary costs or benefits in your decision making, you can use the analytical hierarchy process (AHP), which is one of a set of multi-attribute decision analysis (MADA) methods that consider non-monetary attributes (qualitative and quantitative) in addition to common economic evaluation measures when evaluating project alternatives. ASTM E 1765 Standard Practice for Applying Analytical Hierarchy Process (AHP) to Multi-attribute Decision Analysis of Investments Related to Buildings and Building Systems published by ASTM International presents a procedure for calculating and interpreting AHP scores of a project's total overall desirability when making building-related capital investment decisions. A source of information for estimating productivity costs, for example, is the WBDG Productive Branch.[....]D. Life-Cycle Cost Calculation
After identifying all costs by year and amount and discounting them to present value, they are added to arrive at total life-cycle costs for each alternative:
LCC = I + Repl — Res + E + W + OM&R + O
Supplementary measures of economic evaluation are Net Savings (NS), Savings-to-Investment Ratio (SIR), Adjusted Internal Rate of Return (AIRR), and Simple Payback (SPB) or Discounted Payback (DPB). They are sometimes needed to meet specific regulatory requirements. For example, the FEMP LCC rules (10 CFR 436A) require the use of either the SIR or AIRR for ranking independent projects competing for limited funding. Some federal programs require a Payback Period to be computed as a screening measure in project evaluation. NS, SIR, and AIRR are consistent with the lowest LCC of an alternative if computed and applied correctly, with the same time-adjusted input values and assumptions. Payback measures, either SPB or DPB, are only consistent with LCCA if they are calculated over the entire study period, not only for the years of the payback period.
All supplementary measures are relative measures, i.e., they are computed for an alternative relative to a base case. [...]"<
Buying or installing elevator equipment that promotes low-energy consumption can help save money and reduce a building’s environmental footprint.
Duane Tilden's insight:
>"As part of a building’s overall energy usage, elevators consume up to 10 percent of the total energy in a building. From an environmental standpoint, the most significant impact elevators have is the electricity use while the elevator is in service. Therefore, buying or installing elevator equipment that promotes low-energy consumption can help save money and reduce a building’s environmental footprint.
Buildings and Energy
One way to measure overall energy usage is by calculating the power factor (PF) of the building and/or its energy-consuming devices. These are generally motors, transformers, high intensity discharge (HID) lighting, fluorescent devices or other pieces of equipment that require magnetism to operate. [...]
Power factor is a measurement of electrical system efficiency in the distribution and consumption of electrical energy. It is the percentage of the amount of electric power being provided that is converted into real work and expressed as a number between zero and one. For example, if a device had a .70 PF, then 70 percent of the power that the utilities generate to run the device is actually being converted into real work. The lower the PF number, the poorer the PF efficiency. The higher the PF number, the greater the PF efficiency.
In some areas, utilities use PF in the computation of the demand charge. A low PF for a customer’s facility could result in a demand charge penalty that increases the monthly demand cost. This is where newer, more innovative elevator control systems can contribute to lower energy consumption and improve a buildings’ overall PF.
Because of electrical losses caused during generation, distribution and consumption of electricity, the amount of power needed to be provided by a utility company will be greater than the amount for which they get paid by consumers.
During a recent modernization of two identical traction elevators, before and after energy data was collected. The original, first generation silicon controlled rectifier (SCR), direct current (DC) motor control was measured using a series of fixed run patterns and known loads. After modernization, the new insulated-gate bipolar transistor (IGBT)-based alternating current (AC) motor control for a permanent magnet synchronous motor system was measured using the same run patterns and known loads.
The SCR-DC system used far more energy (watts/hour) to move the exact same load through the exact same distance compared to the IGBT-based permanent magnet AC control (Chart 1). In fact, in these six load tests, the IGBT-based system used less than half the energy. An incredible 383 percent increase in power factor of the IGBT-based system compared to the SCR-DC system (Chart 2). That means more of the energy consumed was being converted into real work with less waste in terms of heat and magnetism.
These kinds of energy usage reductions and PF increases are becoming even greater as newer elevator technology gets incorporated into buildings (Chart 3).
It’s easy to see how reducing energy consumption and increasing power rating can benefit the building’s owners and operators. However, these same improvements benefit the community as well. The electricity not being used in one building can be used by other customers — allowing utilities to meet the community’s electricity demand without increasing electricity generation. That translates into no rolling blackouts or brownouts, no new power plants being built and an overall smaller environmental footprint.
Up to this point, traction elevator technology was discussed where wire ropes pull the elevator from above the car. In contrast, the hydraulic elevator pushes the elevator cab through the hoistway. The way a hydraulic system works is a piston and cylinder are sunk in the ground below the elevator. To go up, a pump forces oil from an oil tank reservoir into the cylinder — causing the piston to rise, making the elevator cab go up. To go down, gravity and the weight of the cab pushes the piston down into the cylinder and forces the hydraulic oil back into the tank reservoir. Historically, hydraulic elevators (or hydros) have been installed where either the building had fewer floors (typically six to eight) or lower material and installation costs were a consideration (when compared to a traction elevator).
So how does a hydraulic elevator measure up in energy consumption?
Considerations Beyond the Hoistway
Energy reduction of a building’s elevators can also impact heating, ventilation and air conditioning (HVAC) systems. Quite often, elevator machine rooms are air conditioned to support removal of the heat generated by elevator control systems. Motor-generator-based elevator controls create a tremendous amount of heat; the effect is multiplied when several systems are contained in the same machine room.
Additionally, a check should be made of the shut-down timer typically employed with motor-generators (M-G) sets. Is it working? Does the M-G set turn off after a set period of time? Or has the timer failed and no longer shuts down the motor-generator, wasting energy as the M-G set turns but no work is being done by the elevator?
The elevator cab’s lighting can impact both the energy consumption and HVAC systems. A recent survey conducted of a 34-story high rise office building with 18 elevators showed the cab lights were on 24-hours a day. There are 28 incandescent light bulbs per elevator. That worked out to 100-amps of power being consumed continuously. By replacing the incandescent bulbs with compact fluorescents, energy consumption could be cut to 30 percent. And if a 24-hour clock timer is added to shut the lights off at midnight, even more energy could be saved.
Reducing Energy Consumption
Finally, if you’re considering an elevator modernization, call your electric provider or visit their Website to explore the possibility of energy rebates from the local utility provider. It is quite common for utilities to offer dollar incentives for specific building improvements that reduce energy consumption and improve PF.
There are various benefits to building owners and facility managers who lower their power consumption and understand how power factor helps reduce the overall cost of energy, particularly the energy used to run the elevators in their buildings. These benefits go beyond the elevators themselves to include benefits derived from HVAC systems, cab lighting and energy consumed when the elevators are not moving that affect the monthly utility bill."
This construction strategy has an installed insulation R-value of R-20.
Duane Tilden's insight:
>"Dampproofing2" XPS rigid insulationConcrete foundation wall2" XPS rigid insulation2" XPS rigid sub-slab insulationGypsum board with vapor retarder paint2" XPS rigid insulation under slab
This construction strategy has an installed insulation R-value of R-20 and has a predicted annual heating energyloss of 16.7 MBtus.
Two inches of XPS on the interior, connected to the thermal break at the slab edge, controls the interior vapor drive and capillary wicking to the interior so there are no moisture related issues from inward vapor diffusion or capillary wicking.
Constructability and Cost
The interior of the insulated concrete form will require drywall or other thermal barrier to achieve the fire rating required by code. The gypsum board is very easy to attach to the plastic clips designed into the ICF. The drywall should not be painted, if it is not necessary, to allow maximum drying of the concrete. It may be easier and more practical to install a thin framed wall (e.g. 2x3 wood or steel framing) on the interior of the ICF to allow any necessary services to be run in the wall, and potentially more insulation.
Because the concrete is installed between two vapor retarding layers, it will take several years for the concrete to dry to equilibrium. Since additional interior vapor control should be avoided, no more than latex paint should be used on the interior surface of the drywall. [...]"<
A Cambridge start-up believes its flexible solar panelling solution could fundamentally change the landscape of solar installation in the commercial sector.
The Solar Cloth Company’s award winning flexible thin film photovoltaics (FTFP) are a few micrometres thick and can be integrated into flexible and lightweight tensile structures called building integrated photovoltaics (BIPV). In doing so, they provide an alternative to traditional photovoltaic panels that are heavy and cumbersome.
Via Pol Bacquet
The White House announced a number of commitments to energy efficiency this morning, not the least of which is a proposed energy efficiency standard for rooftop air conditioners that could produce the largest electricity savings under any U.S. appliance efficiency...
image courtesy of http://akbrown.com/?page_id=278
Duane Tilden's insight:
>"[...] NRDC strongly applauds today’s White House’s efficiency and clean energy announcements which come the same week that a new energy-savings standard became effective for refrigerators and freezers, with the majority of models cutting their energy use by 20 to 25 percent, thanks to a 2010 consensus recommendation to the Department of Energy (DOE) from refrigerator manufacturers, efficiency advocates, consumer groups and states.
According to the White House, the rooftop air conditioner proposed standard announced would help cut carbon pollution by more than 60 million metric tons, and could save consumers nearly $10 billion on their energy bills through 2030. [...]
The announcement follows significant groundwork by DOE in this product category, including DOE’s High Performance Rooftop Unit Challenge, a competition among manufacturers to produce efficient cooling units that cut their energy use almost in half and are still affordable in the commercial and industrial real estate space. DOE worked with members of its Commercial Building Energy Alliances (CBEA), which includes many large commercial building owners, to create a challenge specification that rooftop air conditioning manufacturers could meet. As part of the challenge, CBEA members, including Target, Walmart, Macy's and McDonald's, expressed strong interest in potentially purchasing high-efficiency roof-top units, helping to drive buyer support for the challenge levels. Manufacturers Daikin McQuay and Carrier succeeded in producing rooftop ACs that met the challenge specifications and resulted in substantial energy reductions.
Also included in today’s announcement are further savings from building energy codes. DOE will issue its final determination that the latest commercial building energy code – ASHRAE 90.1-2013 – saves energy compared to the previous version. Once DOE issues a positive determination that the new code saves energy compared to the previous code, individual states will consider the code for adoption leading to energy savings in new buildings and major retrofits in those states. DOE will also issue its preliminary determination on the latest residential energy-saving building code – the IECC 2015. DOE estimates that the updated commercial building standards will reduces energy bills for states and the federal government, while cutting emissions by 230 million metric tons of carbon dioxide through 2030. [...]"<
Steven Forrester’s small Colorado engineering firm is four years old. While he started DMA Engineering during tough economic times, he is holding his own because of clients like the city of Louisville, where his firm recently designed a solar thermal lap pool for a city recreation center.
Duane Tilden's insight:
>"“When we present a design, 99% of the time, we do LCCA, “ says Forrester. “It shows we bring added value.”
In the case of the solar-heated pool, the facilities manager had to go to City Council members for approval. The LCCA demonstrated the financial incentive to do the project. Forrester uses LCCA mainly to compare different types of systems over the lifetime of the building. The price of new equipment is an easily comprehensible but incomplete cost. LCCA also accounts for future costs. LCCA adds in maintenance, energy use, tax incentives or rebates, and any salvage value. It also can cover replacement costs. For example, really good windows may last 50 or more years, so it’s not likely building owners would account for their replacement. Rooftop units, on the other hand, which are usually considered an inexpensive heating and cooling solution for commercial buildings, must be replaced much more frequently. “We typically see replacement 10-25 years,” says Forrester.
That means if design teams are thinking about the lifetime of the building, then the cost of one rooftop unit is really the cost of three, six, or nine units or more, explains Rocky Mountain Institute Analyst Roy Torbert. RMI recommends LCCA as standard practice on all new and retrofit building projects.
“Most equipment will be around for 20 years. Without doing the lifecycle analysis, you only know the initial costs rather than the full cost over the life of the building,” says Forrester. “I think it’s an invaluable part of making any decision about any piece of equipment.”
While Forrester compares the direct economic costs of alternative design solutions, some people and organizations are beginning to consider the indirect, more complex societal costs.
[...] RMI is helping GSA to use life cycle assessment to account for the environmental impact of building retrofits and operation, and will then convert the impact into a dollar value.
Life cycle assessment, or LCA, estimates the environment impact of processes and products in terms of greenhouse gas emissions, wastes, toxins, and particulate matter. GSA will wrap the hidden costs associated with this impact into the LCCA in order to provide a fuller analysis.
Design teams can use LCCA to show the tradeoffs between cost and another factor that is important to the client, such as carbon. Since President Obama has ordered all new federal buildings to be net zero by 2030, many energy service companies working on federal projects will be closely examining these kinds of tradeoffs. "<
The Canadian green building market has grown in the last few years and is expected to continue its strong growth in years to come, according to a recent report released by the Canadian Green Building Council (CaGBC).
Duane Tilden's insight:
>"The report projects the figure to grow in upcoming years and a shift to happen as firms ramp up their green projects to more than 60 per cent. The main factors triggering the green trend include companies wanting to do ‘the right thing’ when it comes to social and environmental responsibility.
“Doing the right thing was very important to a lot of the respondents, which surprised me...obviously the Canadian industry has a lot social consciousness” added Mueller.
Companies are also experiencing significant cost savings through various efficiencies.
Eighty two per cent of building owners and developers report decreases in energy consumption compared to similar buildings and 68 per cent of owners/developers report decreases in water consumption.
In Canada, businesses reduced their operating costs by 17 per cent through green buildings in 2014, ahead of the global average of 15 per cent in 2012.
The top sectors currently with green projects expected to be certified LEED (Leadership in Energy and Environmental Design) are, new institutional construction, new commercial construction, new low-rise residential, new mid and high-rise residential, and existing buildings/retrofit.
“In the public sector, the institutional sector, there’s a very strong commitment to build buildings to the LEED standard,” Mueller added. “Our focus is very much on building the LEED standard.”
Green Building is also beginning to build a strong business case for itself, according to the report.
Thirty seven per cent of owners project a spike in occupancy rates, 32 per cent expect improved tenant retention, 26 per cent expect improved lease rates and 13 per cent forecast a higher return on investment.
The median payback period for investment on a new green building is eight years, according to the report.
According to Mueller, owners and developers who are repeat green builders usually maintain a positive experience, but it’s the first timers that need to be shown the right steps in pursuing green building.
“If you’re an owner doing it for the first time, you have to be diligent, you have to be prudent to select the right consultants,” he said. “You have to do your due diligence and we certainly will be at the council to help first-time users to apply the LEED program and to make sure they have a positive experience.”<
Lexington Farms, a single family affordable housing development in Illinois, looks to be LEED Platinum and net zero via clean energy on each house.
Duane Tilden's insight:
"The model under which these modular homes are made available to residents is rather unique. They were built for those making less than $41,000 a year, and were reportedly provided to these people in a rent to own situation at a set monthly lease cost of $590. Each 1,425 square foot, three bedroom dwelling is green down to its core via an array of eco technologies. Owners apparently had to be provided with a special manual to educate them about the various green technologies they are living with.
So what exactly is under the hood of each green home in Lexington Farms? According toUrban Green Energy, the impressive list includes one of the firm’s 1,000 watt eddyGT vertical axis wind turbines; 7,200 watt photovoltaic solar roof panels; Energy Starappliances; U35-rated, argon gas filled windows; R-21 wall and R-49 attic insulation; low-flow water fixtures and WaterSense toilets; sustainable landscaping with efficient irrigation systems; recycled construction materials; low VOC paints and energy efficient, fluorescent light fixtures.
At the time of construction is was said the IHDA invested more than $2.5 million into the project, providing federal American Recovery and Reinvestment Act (ARRA) funds and federal Low-Income Housing Tax Credits to finance it. The federal tax credits, noted the IHDA, “were a result of a special allocation for counties hit by severe flooding [and] generated an additional $6.7 million in private equity for the development.”
Overall, these green homes aimed for net zero energy usage via the renewable energy features. An additional $260,000 grant from the Illinois Department of Commerce and Economic Opportunity further supported the development."
If successful, Title 24 will open the door to increased amounts of energy efficiency financing, expanded sources of capital and lower financing costs.
Duane Tilden's insight:
>California’s Title 24
Title 24 is California’s body of state building codes. These codes have been revised to move the building industry toward comprehensive building solutions with a goal of achieving Zero Net Energy (ZNE) residential and commercial buildings. In a ZNE building, the annual building’s energy consumption is equal to the building’s onsite renewable energy generation. California has set a goal for all new residential construction to be ZNE by 2020 and for all new commercial construction to be ZNE by 2030. Additionally, the repurposing and remodeling of existing buildings that are of a size-threshold defined by Title 24 will also have to comply with Title 24 revised codes.Financing a “smart” Zero Net Energy building
The challenge of financing any energy efficiency or renewable energy project is in providing assurances to the source of capital that the project will actually generate sufficient cost savings to cover financing costs plus repayment of invested capital. The number one challenge for winning energy efficiency investments is the uncertainty in documenting bill savings results. Too often, the cost savings generated by an investment in energy efficiency is lost in higher electric bills as new loads are added and utilities raise rates.
Information technologies that monitor, control and financially operate a building through links to real time prices of grid-supplied electricity are the foundation for enabling Title 24 project financing. Smart ZNE buildings will operate to optimize the economics between reducing building demand, reducing energy consumption, on-site generation, use of on-site energy storage and purchases of grid electricity.
What will further enable the financing of ZNE buildings is the ability of enabling information technologies to “look forward” in time to proactively shape a building’s operation and grid purchases to financially support the building’s project financing. The technologies that can achieve these results have already been invented. What California is pursuing through its Title 24 code revisions is a massive economies of scale push for these technologies to drive their costs down and increase their ability to be financed.The sales pie just got bigger…a lot bigger
Beginning in 2014, Title 24 will blow the sales doors open for smart building technologies, energy efficiency technologies, onsite energy storage and renewable energy technologies. Title 24 will create a new competitive landscape for architects, general contractors, sub-contractors and vendors based upon their ability to offer price competitive services and products that comply with Title 24 codes. The construction industry’s sales path for energy efficiency projects will no longer be anchored by utility incentives that support targeted energy efficiency upgrades like re-lamping a building with more efficient lights. The new sales path will be based upon cost-effectively delivering code compliance to achieve financeable building performance. New competitive advantages will be won by contractors and architects that offer building performance assurances to building owners and financing sources.<
PORTLAND, OR--(Marketwired - Oct 29, 2013) - The Green Building Initiative (GBI) applauds the General Services Administration on its recognition of Green Globes® alongside the U.S.
Duane Tilden's insight:
>GBI's growth in the market is due to its commitment to the practicality of its tools for use by building owners, designers, and facility managers as well as its commitment to open, consensus-based review of its technical criteria. In 2010, GBI was recognized for developing Green Globes for New Construction as the first ever American National Standard for a commercial building rating system. As it continues to improve its rating systems based on changes in the market, GBI remains committed to using the American National Standards Institute (ANSI) approved consensus procedures.
"GBI is the only commercial building rating system developer to vet its technical criteria through the ANSI process," stated GBI Chairman Tonjes. "This helps to ensure that GBI's rating systems provide the opportunity to evaluate the widest range of buildings using an open, science-based approach to building performance."
ANSI/GBI 01-2010, also known as Green Globes for New Construction, is due for revision before the end of 2015 based on ANSI periodic maintenance requirements. According to Tonjes, GBI's ANSI-based rating system review process will begin before the end of this year with the filing of required documents followed by reformation of the technical review committee.
GBI's tools have a significant focus on both the reduction and efficient use of energy and water in buildings. These, along with other criteria, help reduce building operating costs and their overall impact on the environment.
"Since 2005, the Green Globes product line has evolved to include several updated and expanded tools," stated Erin Shaffer, vice president of federal outreach at GBI.<
PORTLAND, Ore., Oct. 23, 2013 /PRNewswire/ -- NEEA and partners successfully introduce heat pump water heaters to the Northwest. Technology promises to save enough energy to power all the homes in Seattle and Boise each year.
Duane Tilden's insight:
>Water heating accounts for 15 to 20 percent of electric energy use in homes with electric water heating. Compared to traditional electric water heaters, heat pump water heaters can save homeowners up to 50 percent on energy costs while still delivering the same amount of hot water. Heat pump water heater technology works like a refrigerator, but in reverse – using fans and an evaporator to pull warmth from the surrounding air and transfer it to water in the storage tank.
"The work we accomplished in collaboration with our utility, manufacturer and retail partners in 2012 and 2013 sets the stage for new innovations, new features and improved product designs that will help transform the market," said Jill Reynolds, heat pump water heater initiative manager, NEEA. "Part of developing new technologies is testing product quality. Together with our partners we tested heat pump water heaters in the field and launched a regional marketing promotion across the Northwest. We see huge potential regional energy savings from this technology."
Fifty-five percent of Northwest homes have electric water heaters. If all of those homes used heat pump water heaters specifically designed for the Northern climate, the region could save nearly 500 average megawatts (aMW) by 2025, the equivalent to powering all the homes in Seattle and Boise combined each year.<
see here for rebates: http://www.oregon.gov/energy/RESIDENTIAL/docs/2013RETCRates.pdf
The Bullitt Center in Seattle, Washington, is one of the most self-sufficient buildings on the planet. It is net zero energy and, after the water reuse system is approved by city authorities, net zero water. Net zero means that the building uses the same amount as it creates or generates – it is self-sufficient.
Duane Tilden's insight:
>"[...]Healthy Green Materials
The Living Building Challenge requires projects to avoid as many of the chemicals and substances that are found on the Red List as possible. These substances have been recognized by government agencies, such as the US Environmental Protection Agency, the European Union Commission, and the State of California, as potentially harmful to human or animal life on Earth. Not all of the substances can be avoided, though, due to the lack of availability of materials that do not contain them.
The Bullitt Center team avoided over 360 known chemicals on this list. Some were easy to avoid, as alternatives were readily available. The team also worked with suppliers to create products that met their requirements, changing the way the products were made and making them available to others.Most plumbing valves, even those made of brass and bronze, contain up to 7% lead. Lead free valves, with an allowable lead content of only 0.25%, were used in both the potable and non-potable water systems, including fire sprinklers.Phthalates are commonly used in PVC and other plastic products. A high-performance water barrier company performed 6 months of research to develop a product that did not contain phthalates, just for the Bullitt Center project. The new product has now replaced the original version going forward.Dioxins are a by-product of the manufacture, combustion, and disposal of products containing chlorine, most notably PVC products. Couplings for no-hub ductile iron pipe are commonly made with neoprene, which contains chlorine. The team worked with the manufacturer to special order couplings made of EPDM (ethylene propylene diene monomer) rubber.The electrician was able to find electrical wire not coated in PVC that met code standards.The fiberglass insulation in the project is held together by a plant-based polymer, not the usual one that contains formaldehyde.Certified Wood
The Bullitt Center is a wood-framed structure. Because of its location and the importance of the timber industry in the Pacific Northwest, the project team decided this was the best choice for the project. 100% of the lumber in the building has been harvested from anForest Stewardship Council (FSC) certified source. The project was also recognized as the only commercial project to receive the Forest Stewardship Council Project Certification, in recognition of responsible forest products use throughout the building.Local Sourcing
Perhaps the greatest story about green materials and the Bullitt Center involves the curtain wall (window) system. Due to the high performance needs of the project, only one product could be used, and it was only manufactured in Europe. A Washington company partnered with the European manufacturer to gain the knowledge to manufacture and install the system in the US. The Washington company flew their employees over to find out how to make and install the system, and a licensing agreement was reached. Now this high performance system is available in the US for future projects to use.
The waste-to-energy plant in Copenhagen was selected as a citation winner in the 62nd Annual Progressive Architecture Awards.
Duane Tilden's insight:
"BIG won the competition for the 1.02 million-square-foot Amager Resource Center with this widely touted scheme, which promises to turn a waste-to-energy plant into a popular attraction. By integrating a ski slope into the roof and a rock-climbing wall up one face, the architects build upon the project’s location: a part of Copenhagen on the island of Amager that has become a destination for extreme sports enthusiasts, thanks to its parks, beaches, dunes, and a lagoon for kayaking and windsurfing. At 100 meters tall, the center will be one of the city’s tallest landmarks when completed—and a striking example of building-as-landscape. Indeed, the client has taken to calling it the Amager Bakke, or Amager Hill."
Elevators and escalators make up 2 to 5 percent of the energy used in most buildings, but can reach as high as 50 percent during peak operational times. At 5 percent, that means the yearly energy consumption of U.S. elevators is approximately five times of that used in all of Washington D.C.
Duane Tilden's insight:
>"Chicago—More energy-efficient elevators can significantly reduce the costs of operating a building, but the information needed to help building owners identify the appropriate elevator system—and the savings associated with it—aren’t readily available, according to a new study published by a leading policy group. The study, by the American Council for an Energy-Efficient Economy, was published with the support of UTC Building & Industrial Systems, the parent organization of Otis, the world’s largest manufacturer and maintainer of people-moving products.
[...] The technology exists today to reduce that consumption by 40 percent or more, especially by cutting energy use between trips, when an elevator is idle, according to the study. Some technologies have been found to reduce consumption by as much as 75 percent, but without a standard way to measure energy savings and a rating system to distinguish more efficient elevators, building owners may be unaware of the benefits of upgrading to a more efficient system or choosing a more efficient system for new construction.
“Enhanced visibility when it comes to elevator efficiency can help customers grasp the full value package of better controls, improved performance, reduced sound, and increased comfort,” said Harvey Sachs, ACEEE senior fellow, and the study’s lead author. Sameer Kwatra of ACEEE presented the study on Tuesday, January 27 at the 2015 American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Winter Conference in Chicago.
The study lays out a framework for industry leaders to set common standards for measuring elevator efficiency. Those standards could lead to a rating system, such as the U.S. Environmental Protection Agency’s ENERGY STAR® ratings already in place for heating, ventilating and air-conditioning systems, and many home appliances. Clear standards also could lead energy utilities and government agencies to offer incentives, such as rebates, for very efficient models. And building label programs, such as the U.S. Green Building Council’s LEED® program, could include elevator efficiency as a factor in certifying buildings. Right now, the LEED program considers elevators a part of unregulated “process loads,” and there are no direct credits for installing more efficient systems.
“Owners see elevators as an extension of the building lobby — a way to include their personality and values in the building,” said John Mandyck, chief sustainability officer, UTC Building & Industrial Systems. “As consumers and tenants better understand and value the effects green buildings have on the health and productivity of inhabitants, clear standards for measuring elevator efficiency can provide a great opportunity to reduce operating costs and showcase the environmental attributes of a building.”
The report identified energy-efficient elevator technologies that can be included in building codes and factored in elevator rating and labeling systems. [...]"<
An eight-month study of Vancouver garden and agricultural soils has found levels of lead and other metals above the most stringent Canadian standards for human health.Samples taken from the 16 Oaks community garden averaged 219 parts per million of lead, which exceeds the standard of 70 to 140 ppm for agricultural, residential and park land set by the Canadian Council of Environment Ministers.Levels of lead — a potent neurotoxin — are five times higher than those measured at UBC Farm
Duane Tilden's insight:
>" [...] “These numbers are higher than is commonly acceptable for growing vegetables and food crops.”
Oka’s findings may call into question the City of Vancouver’s enthusiasm for urban agriculture.
“You want to be conservative. According to the precautionary principle, if you aren’t sure what you are dealing with, you have a moral and ethical responsibility to go slowly,” said Lavkulich. “We aren’t saying don’t grow food, but you want to be sure what the impacts are on human health before you start advocating for urban agriculture.”
The city encourages would-be gardeners to have their soil tested and, barring that, to grow vegetables in lined boxes with clean soil rather than in the native soil, said Coun. Andrea Reimer.
“This city has a long industrial history and they didn’t always have the environmental standards that we have today,” she said. [...]"<
This winter, ACEEE, in partnership with Energi Insurance Services, will host a second gathering of select members of the Small Lenders Energy Efficiency Community (SLEEC) in Washington, D.C. The initial SLEEC convening in October 2013 brought together small- to medium-size lenders to discuss strategies for expanding activity in the market for energy efficiency financing. Building off the success of that first meeting, the second SLEEC gathering will focus exclusively on financing in the multifamily sector [...]
Duane Tilden's insight:
>" [...] The goal of the upcoming SLEEC meeting is to discuss how recent developments inform the lender perspective on the size, attractiveness, and viability of the finance market for multifamily efficiency. We chose to address multifamily this year because potential savings are phenomenal at an estimated $3.4 billion per annum, and multifamily has traditionally been characterized by the label “hard to reach” due to significant barriers to entry. Single-family residential, large commercial, and MUSH (municipal, universities, schools, and hospitals) markets pose fewer barriers and have therefore been easier to approach, while multifamily is a more complex market posing greater obstacles.
The first and most commonly cited obstacle is known as the split-incentive problem: Landlords and building owners don’t always have an incentive to pursue energy efficiency improvements since their tenants would be the ones benefitting from reductions in energy bills. The next most bemoaned roadblocks are a lack of information and lack of available capital. Landlords and owners are experts at running their buildings, but may be in the dark on energy efficiency. Utilities and many loan agencies, while knowledgeable about energy efficiency, lack experience interacting with tenants. The resulting information gap inhibits energy efficiency projects from getting off the ground. This problem is exacerbated by a lack of capital, especially in the affordable housing market, where many buildings owners hold 30-year mortgages on their property with only one refinancing opportunity after 15 years. Unless building owners and potential lenders can capitalize on this small window, many projects would not have another opportunity to finance efficiency improvements for another 15 years.
Despite these barriers, there are a number of successful initiatives that are poised for impact. Perhaps the most successful is Energy Savers, a Chicago-based partnership between Elevate Energy and the Community Investment Corporation (CIC) that has retrofitted 17,500 apartments since 2008. [...] Innovative programs such as these are paving the way for energy efficiency in the multifamily housing market.
A perceived lack of capital may be attributable to issues surrounding the valuation of energy efficiency from a building owner’s perspective that manifests as low demand. [...] "<
"Such an energy storage and distribution system can offer a great value, certainly for schools", says Bert Dekeyzer of npo iD, the organization behind the ‘School of the Future’.
Duane Tilden's insight:
>'"During weekends a school consumes almost no electricity. The energy produced by the solar panels is stored in the batteries. On Monday morning there is a peak consumption: then all the computers and machines are turned on, which requires quite a lot of electricity. If the solar panels supply too little at that time, the batteries can provide the remaining energy. Moreover, a study showed that the energy consumption of a school does not stop after four o'clock in the afternoon. Schools are increasingly used in the evening for sports activities and evening classes. Also in this situation, the batteries can play their part."
PV, storage combination offers a solution for a possible power shortage
In addition to an optimal and economic usage of solar power, the system can provide a solution for a possible power shortage in Belgium. Because of problems with the Belgian nuclear power plants, various municipalities could get disconnected from the electricity grid. In case of a power disruption, a traditional solar installation does not work anymore. The inverter of a traditional system switches off automatically because of a power failure. The owners of solar modules also have no electricity at that time, and in addition they suffer losses of the power output and any feed-in tariffs from their solar panels during the outage.
The storage system provides a solution. Such an installation combines solar modules with battery storage and intelligent software: if the grid fails, the system provides uninterrupted power for the user from the solar modules and/or batteries. [...]"<
Integration: Net-zero energy design
ASHRAE has a goal: net-zero energy for all new buildings by 2030. What do engineers need to know to achieve this goal on their projects?
Duane Tilden's insight:
>"As net-zero energy and low-energy design projects become more prevalent, engineers must be prepared to collaborate with all members of a project team including architects, energy specialists, lighting designers, builders, and owners in order to accomplish net-zero energy goals with little to no cost premium. Is this possible today or will it take another 10 or more years to get there?
There are many examples of completed projects demonstrating that not only is this possible, but it has been done in all regions of the country using readily available building products and common construction methods. So what’s the secret? It’s all about the design.
Net-zero energy defined
The term “net-zero energy” is abundantly used, but a single universally accepted definition does not exist. In general terms, a net-zero energy building (NZEB) has greatly reduced energy needs achieved through design and energy efficiency, with the balance of energy supplied by renewable energy. In an effort to clarify the issue, the National Renewable Energy Laboratory (NREL) published a paper in June 2006 titled “Zero Energy Buildings: A Critical Look at the Definition,” in which it defined the following four types of NZEBs:
Net Zero Site Energy: A site NZEB produces at least as much renewable energy as it uses in a year, when accounted for at the site.Net Zero Source Energy: A source NZEB produces (or purchases) at least as much renewable energy as it uses in a year, when accounted for at the source. Source energy refers to the primary energy used to extract, process, generate, and deliver the energy to the site. To calculate a building’s total source energy, imported and exported energy is multiplied by the appropriate site-to-source conversion multipliers based on the utility’s source energy type.Net Zero Energy Costs: In a cost NZEB, the amount of money the utility pays the building owner for the renewable energy the building exports to the grid is at least equal to the amount the owner pays the utility for the energy services and energy used over the year.Net Zero Energy Emissions: A net-zero emissions building produces (or purchases) enough emissions-free renewable energy to offset emissions from all energy used in the building annually. Carbon, nitrogen oxides, and sulfur oxides are common emissions that zero-energy buildings offset. To calculate a building’s total emissions, imported and exported energy is multiplied by the appropriate emission multipliers based on the utility’s emissions and on-site generation emissions (if there are any).
A subsequent paper was published by NREL in June 2010 titled “Net-Zero Energy Buildings: A Classification System Based on Renewable Energy Supply Options,” where four classifications of NZEBs were defined:
NZEB:A: Building generates and uses energy through a combination of energy efficiency and renewable energy (RE) collected within the building footprint.NZEB:B: Building generates and uses energy through a combination of energy efficiency, RE generated within the footprint, and RE generated within the site.NZEB:C: Building generates and uses energy through a combination of energy efficiency, RE generated within the footprint, RE generated within the site, and off-site renewable resources that are brought on site to produce energy.NZEB:D: Building uses the energy strategies described for NZEB:A, NZEB:B, and/or NZEB:C buildings, and also purchases certified off-site RE such as Renewable Energy Certificates (RECs) from certified sources.
In the ASHRAE Vision 2020 report, net-zero site energy is the building type chosen through an agreement of understanding between ASHRAE, the American Institute of Architects (AIA), the U.S. Green Building Council (USGBC), and the Illuminating Engineering Society (IES). [...]
Integrated building design
Integrated building design is a process that promotes holistic collaboration of a project team during all phases of the project delivery and discourages the traditional sequential philosophy. According to ASHRAE, the purpose of the integrated design process is to use a collaborative team effort to prepare design and construction documents that result in an optimized project system solution that is responsive to the objectives defined for the project. NZEB must be designed collaboratively using a “whole systems” approach recognizing that the building and its systems are interdependent. As such, the integrated building design process has proven to be effective for net-zero energy projects.
Commissioning is an important part of every project, and for NZEB projects the commissioning authority should be a member of the design team and involved throughout the design process. [...]"<
Buildings spew more than half of all Vancouver’s total greenhouse gas (GHG) emissions every year and detached houses are the biggest culprit [...] That fact is key to a staff recommendation that council adopt an energy retrofit strategy for existing buildings to drastically cut GHG emissions.
Duane Tilden's insight:
>"About 40,000 of Vancouver’s 77,000 detached homes were built before 1960. The report said most older homes could improve their energy efficiency with weather sealing, wall and attic insulation, furnace/boiler/hot water heater replacements and replacing old windows with new energy-efficient glazing.
About 55 per cent of GHG emissions in Vancouver come from buildings and of those detached homes create 31 per cent of building emissions, the report said.
That compares with industry’s 20-per-cent share and 18 per cent from multi-unit residential buildings.
The city’s Greenest City Action Plan has targeted a 20-per-cent reduction in GHG emissions from Vancouver buildings by 2020, which would eliminate 160,000 tonnes of emissions annually — the equivalent of taking 40,000 cars off the road.
The report recommends the city partner with BC Hydro and/or FortisBC to study the effectiveness of using thermal imaging to identify poorly insulated homes.
... common energy-efficient building practices today include using vinyl or wood window frames instead of aluminum, along with the use of heat pumps, solar panels and drainwater recovery systems.
But Kerchum noted it can cost nothing to improve a home’s energy efficiency.
A recent Vancouver city initiative to improve energy efficiency in Vancouver homes — the Home Energy Loan Program — had a very low participation rate among homeowners.
The program called for homeowners to have an energy audit by a federally licensed auditor, who would recommend the best ways to reduce a home’s carbon footprint."<
Best of 2013 - Article BY FRANK ALONSO AND CAROLYN A. E.
Duane Tilden's insight:
>Hurricane Sandy left many electric utility executives, their customers, local and state government leaders and regulators contemplating placing overhead power lines underground. This desire surges into prominence whenever natural disasters cause destruction on the overhead distribution and transmission networks across the country. In the past, the largest obstacle to placing overhead power lines underground has been the higher cost of installation and maintenance for underground lines. [...]
Whenever a major weather-related catastrophe occurs or land is being developed, the question of placing overhead power lines underground surges. The answer to the proverbial question, "Why can't overhead power lines be placed underground?" is, "They can be, but it's expensive."
Higher initial construction costs. According to the May 2011 paper "Underground Electric Transmission Lines" published by the Public Service Commission of Wisconsin, "The estimated cost for constructing underground transmission lines ranges from 4 to 14 times more expensive than overhead lines of the same voltage and same distance. A typical new 69 kV overhead single-circuit transmission line costs approximately $285,000 per mile as opposed to $1.5 million per mile for a new 69 kV underground line (without the terminals). A new 138 kV overhead line costs approximately $390,000 per mile as opposed to $2 million per mile for underground (without the terminals)."
These costs show a potential initial construction cost differential of more than five times for underground lines as opposed to overhead lines for construction in Wisconsin. Costs vary in other regions, but the relative difference between overhead and underground installation costs is similar from state to state.
Maintenance costs. The present worth of the maintenance costs associated with underground lines is difficult to assess. Many variables are involved, and many assumptions are required to arrive at what would be a guess at best. Predicting the performance of an underground line is difficult, yet the maintenance costs associated with an underground line are significant and one of the major impediments to the more extensive use of underground construction. Major factors that impact the maintenance costs for underground transmission lines include:
Cable repairs. Underground lines are better protected against weather and other conditions that can impact overhead lines, but they are susceptible to insulation deterioration because of the loading cycles the lines undergo during their lifetimes. As time passes, the cables' insulation weakens, which increases the potential for a line fault. [...]
Line outage durations. The durations of underground line outages vary widely depending on the operating voltage, site conditions, failure, material availability and experience of repair personnel. The typical repair duration of cross-linked polyethelene (XLPE), a solid dielectric type of underground cable, ranges from five to nine days. Outages are longer for lines that use other nonsolid dielectric underground cables such as high-pressure, gas-filled (HPGF) pipe-type cable, high-pressure, fluid-filled (HPFF) pipe-type cable, and self-contained, fluid-filled (SCFF)-type cable. In comparison, a fault or break in an overhead conductor usually can be located almost immediately and repaired within hours or a day or two at most.<
LEED and Green Globes approved as third party certification programs for federal facilities.
Duane Tilden's insight:
>In its recommendation to DOE, GSA recommended the Green Building Initiative’s Green Globes 2010 and the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) 2009 as the third party certification systems that the federal government can use to gauge performance in its construction and renovation projects. Other certification systems were not selected because they did not align with the government’s requirements. Additionally, under this recommendation, GSA will conduct more regular reviews in order to keep up with the latest green building tools that the market has to offer.
Third party certification systems like LEED and Green Globes help in measuring reduction targets for water, energy, and greenhouse gas emissions against industry standards. Agencies can use one of the two certification systems that best meet their building portfolios, which range from office buildings, to laboratories, to hospitals, to airplane hangars.
Federal construction and modernization projects must adhere to the government’s own green building requirements by law and executive orders. No one certification system meets all of the federal government’s green building requirements. Green building certification systems are just one tool that GSA uses to cut costs and meet sustainability and economic performance goals.<
Deploying private capital for energy efficiency retrofits "could" be transformational, "but" investors lack the confidence in energy savings estimates against which lenders would underwrite loans. How do we boost that confidence?
Duane Tilden's insight:
>[...]Those seeking capital for energy project investments need to do a better job presenting risk information to decision makers. Simple payback, return on investment, or even life-cycle-cost models do not provide sufficient information on risks and rewards. Investors cannot properly assess cash flow forecasts without a discussion of risks and risk mitigation.
For example, imagine two five-year streams of cash flow, one that generates a 15 percent return and one that generates a seven percent return. Which is better? The answer depends on the level of risk in achieving the forecasted benefits. If the seven percent return is based on seasoned existing cash flows it might be highly preferable to a 15 percent return predicated on executing construction, lease-up, and other risks.
The initial estimated energy cost savings is a critical value for investors considering energy projects. The risk side of this economic opportunity is that a building will fail to live up to performance expectations and the anticipated cost savings are not achieved.
[...] This causes the financial analyst to increase the required rate of return or to de-rate the savings before applying the financial model. This practice undermines the viability of energy projects.
Yet recent efforts have highlighted attempts to address these confidence deficiencies. The Environmental Defense Fund—through its Investor Confidence Project—is working with engineers, financial firms, insurers, regulators and utilities to unlock the flow of private capital into building efficiency investments. They are developing protocols so that energy and cost savings from retrofit projects can be predicted more accurately and realized more consistently. [...]
The modeler utilizes building simulation software to project energy use and costs. By evaluating and comparing performance, the modeler determines the benefits of building siting, space layout, passive design elements, and energy-efficient components. The modeler also identifies occupant comfort issues. Building energy modeling (BEM) is often applied in the design and retrofit of buildings to evaluate proposed and alternate integrated-design solutions that satisfy project performance targets. To support investors, information must be provided that describes the risk associated with cost savings estimates and indirect benefits of improvements so their value beyond costs can be considered.
The level of risk associated with the energy savings for retrofit projects can be addressed in two general ways: 1) the approach for quantifying energy savings, and 2) methods for managing risk introduced by the modeling process. [...]<