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Measuring for Results: Data and the Changing Energy Landscape
Cliff MajersikExecutive Director
Institute for Market Transformation (IMT)
Measuring for Results: Data and the Changing Energy Landscape
Cliff Majersik
Spark16Atlanta
Sept. 15, 2016
Money saved • U.S. spends $400B+/year
Infrastructure investment • $279B+ retrofit potential
Local job creation • 3.3million cumulative job
years
Market Potential
Brazil
Germany
India
U.S. Buildings
China
0.0 20.0 40.0 60.0 80.0 100.0 120.0
Buildings in the U.S. use more energy than most countries use and account for 40% of U.S. carbon emissions
2011 Total Primary Energy Use (Quadrillion BTU)
Why Buildings Matter
In large cities with significant public transportation, buildings typically account for 70% or more of CO2 emissions and energy usage.
DISTRICT OF COLUMBIA
Buildings (74%)
Transportation (22%)
Waste (2%)
Metro transit (2%)
NEW YORK CITY
Buildings (75%)
Transportation (20%)
Solid waste, wastewater
and fugitive (5%)
BOSTON
Buildings (71%)
Transportation (29%)
CHICAGO
Buildings (70%)
Transportation (21%)
Other (9%)
Why Buildings Matter
Buildings (74%)
Buildings (75%)
Buildings (71%)
Buildings (70%)
Why Buildings Matter
Transportation and Others
34%
Buildings66%
City of AtlantaEnergy Consumption
Transporta-tion and Others
42%
Buildings58%
City of AtlantaCO2e Emissions
ENERGY STAR as Industry Standard
ENERGY STAR as Industry Standard
Through 2014:More than 400,000 properties benchmarking energy use More than 25,000 properties are ENERGY STAR certified
Average 2.4% annual energy consumption reduction over 3-year period.
Utility expenditures reduced by about 3%.
77% facility managers in NYC surveyed made operational changes in response to benchmark and transparency. 75% installed new energy-efficient equipment.
Energy + Cost Savings
Current Landscape(see buildingrating.org)
U.S. Benchmarking Policy Landscape: Flagship Policies, 7 Billion Sq. Ft. of Commercial Space
How the Market Can and Is Using Data
Smarter Business Decisions
High demand for energy-efficient products and skilled workers
Small businesses adding staff and increasing client bases
KEY TAKEAWAY: Financing not the key barrier. Primary issue is demand.
Job Creation + Economic Growth
Job Creation + Economic Growth
“As a Silicon Valley venture capitalist … I tell our green startup companies to focus on San Francisco or New York City. That’s where the action is going to be.”
- Elton Sherwin, venture capitalist, senior managing director, Ridgewood Capital
“The Greener Greater Buildings Plan has spurred the New York Market to interest and activity around energy efficiency. Over the past year, we have begun working with over 75 million square feet of real estate in New York and over 400 new clients.”
- Lindsay Napor McLean, COO, Ecological
“When an owner sees a benchmarking score that is lower than expected, they’re a little more receptive to improvements to bring the score up, which in turn lowers their utility costs.”
- Kevin Dingle, president, Sustaining Structures
Market Competition + Consumer Choice
Building performance data
collected
Data shared with stakeholders and
market
Market compares building
performance
Market rewards efficient properties
Owners improve efficiency to remain
competitive
Efficiency of building stock continuously
improves
CoStar to Include Data
95B Sq. Ft. tracked4.6M properties
What the Data is Telling Us
Energy intensity is greater in newer office buildings than older buildings.
ENERGY STAR scores are higher in older office buildings than newer buildings.
What the Data is Telling Us
The poorest performing buildings use 3 to 7 times the energy and roughly 8 to 13 times the water of the highest performing buildings.
What the Data is Telling Us
Residential energy efficiency is associated with lower mortgage default and prepayment risk
32% lower default risk on ENERGY STAR homes, controlling for other factors, including price, location and FICO score.
The more efficient the house, the lower the default risk.
What the Data is Telling Us
How the Market is Responding
Rental price Sale price Occupancy rate
0%
5%
10%
15%
20%
25%
30%
Wiley et al 2010*
Fuerst & McAllister 2009/11
Jackson 2009
Pivo & Fischer 2010*
Eicholtz et al 2010*AveragePremium
Added Value of ENERGY STAR Labels in Commercial Market
Jackson, 2009 Pivo & Fisher, 2010 Fuerst & McAllister, 2011
Eicholtz, 2010Wiley et al., 2010
Rental Premiums for Green Commercial Buildings in the U.S.
Growth of Companies Reporting Data
$2.8 Trillion Total gross asset value of companies and funds reporting to GRESB Real Estate in 2016
$7.6 TrillionInstitutional capital represented by 58 GRESB investor members
Existing Barriers
Informational Lack of transparency around efficiency
Institutional Energy efficiency is undervalued
Transactional Split incentives
Organizational Information doesn’t flow within company or process
Inertia Business as usual continues without intervention
Establishing Best Practices
www.greenleaseleaders.com
www.greenleaselibrary.com
Improving Data Accessibility
Improving Data Accessibility
Engaging Buildings and Owners of All Sizes
Educating Additional Stakeholders
Educating Additional Stakeholders
