Since the dawn of time (well, OK, since 1979 when Michigan and Princeton Professors Ross and Williams developed the idea of a “house doctor”), energy efficiency enthusiasts have been convinced that retrofitting a residential building to save energy could pay for itself in fuel savings.  It’s been a rocky road since those days, when the prime concern was our dependence on unreliable Mideast oil rather than climate change, and in the energy price valley of 1985 – 2000, it was a lot harder to make the case.

But over the last ten years, subsidized programs all over the country have carried out hundreds, perhaps thousands, of retrofits.  Many were aimed at affordable housing, including the federally funded Weatherization programs, and state efforts like NYSERDA’s Assisted Multifamily Program (AMP, in which I was active) and the current Multifamily Performance Program (MPP). Others focused on coaxing the owners of unsubsidized multifamily buildings, including coops, condos, and market-rate rentals, to upgrade their building systems in the interest of greater efficiency, but always with the carrot of long-term savings. Similar efforts went on in many of the more progressive states.

All these programs were successful in installing efficiency upgrades:  insulate the roofs, add caulking and weather-stripping, switch to fluorescent lights, replace that failing boiler, and add better heating controls.  And because we had used careful analysis and detailed computer models, we were confident the savings were there.  But the fact is, we couldn’t present fuel and electric usage data from any of the early projects to prove that our analysis was accurate. As late as 2008, we had a grand total of 20 buildings from AMP for which we had verified savings, largely of satisfactory magnitude.

Of course this is a problem from a technical perspective – we would like to know we are telling the truth when we claim that savings will be forthcoming.  But there is another, much larger problem:  all the retrofits done under Weatherization or NYSERDA programs are subsidized, one way or another, so the owner could expect a much more substantial return on their own partial investment than they would receive in pure market circumstances. And still it was hard to get them to undertake the projects.  Further, what we need now is a truly massive campaign of energy retrofits, far larger than can ever be subsidized by either NYSERDA or the federal government. And owners rarely have the cash reserves to undertake energy retrofits on their own.  The only way to bring retrofit activities “to scale” is to make them an investment opportunity for lenders, by which I mean banks.

But you know bankers – dour, untrusting, “show me your cash flow” types who want proof that you will have the money to meet your monthly obligations. (We will omit discussion of the unfortunate events of the last few years except to note that now no one will lend any money without ironclad guarantees of credit-worthiness.) If we want bankers to lend money for retrofits based on the use of energy savings to repay the loan, we need tools to convince them that the savings will be forthcoming.  Until now, those tools were not in evidence.

Today, we stand a chance.  Deutsche Bank Americas Foundation and Living Cities commissioned Steven Winter Associates and HR&A Advisors to undertake a massive study of energy retrofit activities in New York City, and to formulate an underwriting approach based on their findings. The just-released report provides both a powerful case that the savings will be realized in enough instances to justify significant investment activity, and an analytic framework that will make investments even more secure.

On the technical side, they examined 231 buildings for which pre- and post-construction data was available, and developed a strong set of useful conclusions. Just a few examples: expect more substantial and reliable savings from fuel use reduction than from measures aimed at electric usage; the more fuel your building uses, the greater the potential for savings. (Before you say “duh”, this was quantified in way that that will be very useful for underwriting, as we will see.) And because buildings are complex systems, they found that while observed savings tracked projected savings in a statistical sense, there would still be cases where the savings fell short.  How can this risk be minimized, making energy efficiency retrofits an attractive investment for our dour banker?

Here is where the team developed an exceedingly clever analytic approach.  The engineers designing the retrofit will use their models to predict savings.  But from an analysis of the 231 buildings, the team already knew that on average, they could expect savings roughly equal to half of the pre-retrofit fuel use minus a substantial constant. (See the paper for the math!)  The clever approach then is to trust the engineer’s model unless it predicts savings greater than the average found for their data set, adjusted for energy use in the building being modeled. If the model predicts savings greater than the data set average, use the data set average. If the model predicts savings less than the data set average, use the model results. Then go talk to your banker. When this approach was applied to the buildings in the data set, they found that the actual energy savings substantially exceeded these adjusted predictions, a situation that should leave underwriters satisfied.

Can this work?  Will we see a dramatic increase in capital available for energy efficiency retrofits? Only time will tell, but we have made a substantial step forward.  All the buildings in New York City over 50,000 square feet will undergo energy audits, as required by Local Law 87 of 2009, and the proposed measures and their estimated savings will be there for all to see. Now, a robust way to justify financing the measures is also available.

Change is a funny thing. Often when I discuss subjects like urban agriculture someone will scoff and say, “You can’t feed everyone through urban farming.”  But the hope is to reduce our dependance on, not eliminate, industrial agriculture.  (And is it churlish to point out that our current agricultural system also doesn’t feed everyone?)  When I raise the prospect of renewable energy I can expect a similar response- and have a similar answer at the ready.  The same goes for biking.  When I argue for continuing the expansion of bike lanes in NYC I am rebuffed with a lot of high dudgeon about how biking isn’t for everyone, that sometimes you need to transport kids or groceries, etc. etc.  But no one is calling for the impound of all combustion powered vehicles.  We are simply hoping to make the city a more hospitable place for cyclists and pedestrians.  I have found that the arguments that are most persuasive in this regard are the ones that explain the multiple positive impacts of these new systems.  Not just from one perspective but from many.  The folks at an organization called Healthcare Management Degree have developed a series of infographics on biking and health that are brilliant example of this.  Their graphics link the impact of driving on public health, the positive impacts of biking on individual health (average weight loss in ONE YEAR = 13 lbs.!) and, perhaps the most compelling argument in this era of tight budgets, the considerable reduction in health care costs. They might have expanded these issues to include positive community impacts like the retention of local dollars, but they are a health care company so we’ll let that slide.

Santa- all I want for Christmas is for someone to develop a similar set of graphics for my other pet causes: retrofitting existing buildings, smart growth planning, and coffee.

While politicians either sit on their hands or openly mock the consensus around climate change, the U.S. Army continues to move forward on its mission to reduce dependence on fossil fuel.  Logic can be a terribly effective tool when you use it.

NPR introduces a little sanity to the energy subsidy debate sparked by the Solyndra controversy when they outline the enormous amount of government funds received by the oil and gas industry, here.

Strangely- those who point to the Solyndra bankruptcy as a clarion call to end subsidies for the renewable energy industry are remarkably silent on the billions afforded to the most profitable and powerful corporations in the history of the world. Our government sends huge amounts of our tax dollars to corporations like Exxon and Chevron that, in terms of control of global resources and impact on global finance, make the Holy Roman Empire look like a network of homeless shelters. Government subsidies ought to be used as a kickstart for fledgling industries, but the culture of lobbying in Washington means that federal money goes to the strongest, most powerful companies, not the folks that would use the cash to advance innovation. So it’s great to see NPR providing some context to the discussion of energy subsidies.

Federal Energy Incentives (1950-2010), via NPR.org

But to me it feels like NPR only gets halfway down the road. A government subsidy is an investment. You wouldn’t buy an inexpensive car if you knew that the maintenance costs were astronomically higher than other options. When we talk about federal investment of our tax dollars we need to look at both the near-term benefits AND the long-term costs associated with that decision.

To this reader, the graph provided by NPR (above) is deeply, although probably not intentionally, misleading. First it divides subsidies across the fossil fuel options of oil, natural gas and coal (though you can’t hide the gorilla in the room- oil gets 44% of federal subsidy dollars.) They then combine solar and wind subsidies on the graph, a total of 9%. The net visual effect of the graph is that there is relative balance among subsidy distribution (except for oil.) But the more striking message within these numbers is that fossil fuels greedily consume 70% of federal energy subsidies, and if you include nuclear in the “dirty” fuel package the total is nearly 80%. Meanwhile solar and wind get only 4.5% each. So- we are pouring money into industries that contribute massively to climate change and/or have significant downstream costs from pollution and a host of other issues. And the “subsidies” numbers from NPR don’t account for direct tax rebates (almost $50B every year to the oil industry.) This is what is called a losing bet.

We are constantly barraged by the simple fact that solar and wind power “cost too much.” But consider the long-term costs of these various industries. Recent studies confirm that the coal industry, for instance, is actually a NET LOSS to the national economy when you include the downstream impacts of the pollution created. And these studies don’t even include the potential impacts of climate change- numbers that ultimately dwarf pollution impacts. Let me say that again, conservative economists (not treehuggers) have determined that the coal industry loses our country money-today. Remember that any time someone tells you that propping up the fossil fuel industry is necessary to retain jobs. It is these statistics (and the recent abandonment of the Clean Air Act  by the Obama administration) that embolden the Sierra Club to run ads like the one below (sorry for the poor quality phone pic) for their Beyond Coal campaign.

Unfortunately, energy subsidies (like most federal funds) are directed not to those whose industries provide the greatest long-term benefit to society- but to those industries with the most muscle. NPR’s graph of energy subsidies could easily stand in as a measure of the lobbying clout of these various industries. In DC, muscle = money.

The place to start sustainable practice isn’t on the roof with solar collectors, but in the boiler room with insulation and controls. So says a new study carried out by our colleagues at Steven Winter Associates and HR&A Advisors and featured in the New York Times.  The study, headed up by Marc Zuluaga of the Green Codes Task Force and There Are Holes in Our Walls, shows that energy efficiency retrofits  resulted in a 19 percent savings on fuel bills and a 10 percent savings on electricity across the 19,000 units studied.

Urban Green Board Chair Jeff Brodsky, the president of Related Management said: “This study proves that the assumption that you can’t rely on savings when doing a retrofit isn’t true. It may not be perfect or exact, but you will see savings.”

There was also wide variability, with some buildings showing much greater savings and (presumably) some showing less. The hope is that this study can be used as a tool to persuade not only the landlords to retrofit, but also the lenders to underwrite larger loans based on projected savings. “We are trying to catalyze a new financing market to satisfy the growing demand for retrofits,” said Susan Leeds, the chief executive of the New York City Energy Efficiency Corporation.

The full report, commissioned by Deutsche Bank Americas Foundation and Living Cities, will be released later this month.

Full disclosure: Of course I think it’s a great study; I contributed some of the data from earlier work on NYSERDA’s Assisted Multifamily Program.

Related Articles:
Showing the Benefits of ‘Green’ Retrofits [6/1/2010 New York Times]: Announcement of the study.

Photo credit: LeSimonPix

The results are in!  The American Council for an Energy Efficient Economy (ACEEE) has released its annual State Energy Efficiency Scorecard, and New York has edged out arch-rival Oregon for the #3 slot.  We’re still substantially behind the two big dogs, but there was drama in the top bracket as well, as Massachusetts lapped California to become #1.

How we did it: Of course the first thing you’re wondering is how we managed to outdo Oregon and become #3.  The most likely answer might be that we grabbed free agent David Bragdon, who directed much of the greening of Portland, and brought him here to head up Mayor Bloomberg’s Office of Long Term Planning and Sustainability.  That, however, was a city-to-city maneuver, and the Scorecard, based on statewide performance, shows no indication that it was a factor.  Rather, New York scored 1.5 points higher on “Utility and Public Benefit Fund Efficiency Programs and Policies” and Oregon beat us out by half a point on “Building Energy Code,” leaving us a net lead of 0.5 points. (We were tied in the other four categories.) This is way too close for comfort, and we’ll have to grow the advantage substantially to ensure continued dominance.

The Big Picture: To put all this in perspective, the Scorecard allocates a total of 50 possible points among six categories.  Massachusetts won with a total of 45.5; California was second with 44.0, we were third at 38.0, and Oregon is now fourth with 37.5.  Yes, we would have to span a substantial 6-point gap to compete in the top rank.

How Can New York Prevail? The areas in which we can most easily rack up additional points are the “Utility and Public Benefit Fund” area, where we got 15/20, and “Transportation,” now at 6/9.  Looking at the detailed breakdown of the first category (p. 6 if you’re reading along), we got 4.5/5 for Electricity Program Budgets, but only 2.5/5 for actual Savings.  So we spent the money, but we need meters on almost everything!  And our Gas Program Budgets were deemed weak and only rated 1/3. This stems from all the years when the PSC and NYSERDA functioned off a System Benefit Charge that was initially structured around electric efficiency, and is only now being fully extended to include gas.  We scored the maximum in the other two subcategories for “Utility and Public Benefit Fund,” so no room for improvement there.

On “Transportation,” I’m from New York City, where we probably rate a 9/9, so it really falls to those upstate SUV and pickup truck drivers to give us an assist. But 3 big points are just waiting to be picked up, if only we could extend rail and bus service.

For Building Energy Codes, we only scored 6/7, while four states got 7 and Georgia got 6.5 (?!?).  What was our problem?  Well, to get 7, your code had to exceed the 2009 IECC or ASHRAE 90.1-2007, and the authors deemed that we had only met those codes. Clearly, New York State should adopt the New York City energy code, which by definition exceeds the NYS code, and therefore meets the ACEEE requirements for a 7.  Alternatively, we could plead that since almost half the population of NYS is now governed by the more stringent NYC code, on average the state deserves a 7.  I’m sure a highly-paid lobbyist would be able to make this case clearly to the ACEEE  staff over an expensive lunch.   

California Strikes Back: Clearly outraged at being pushed off the high podium, the California Air Resources Board started the 2012 competition early by adopting a statewide cap and trade system for greenhouse gasses on October 20th. This was a shrewd move by California, since Massachusetts had already scored 7/7 on “State Government Initiatives” and can’t go any higher, while if California can push their 5.5 up to a 7, which this ambitious effort certainly deserves, they can tie Massachusetts on that basis alone.

Race from the Bottom: Three states – Mississippi, Wyoming, and (dead last) North Dakota – have total scores of less than 5/50.  They should consider it a growth opportunity – Alabama went from 3 to 9/50, and Nebraska from 4 to 10/50, earning both of them commendations for “most improvement.” I’m not so sure they deserve praise at this level – some state will always be ranked 51^st (DC is a state in the Scorecard), but even the lowest ranked state could have a score of 20 or 30/50 if they were trying at all.  How about “still fails to meet expectations”?

Full Disclosure: OK, the Scorecard is a little dense, I haven’t read the whole thing, and you probably won’t either.  But it is a lot of fun to dip and skim through, with great gobs of detail for the items that interest you most.  I especially recommend Chapter 3 on Building Codes – a very clear explanation of different vintages of codes from the IEC and ASHRAE90.1, the role of the DOE and ARRA, and all that confusing stuff.

My day at the conference was dominated by an excellent session on the future of the Cradle to Cradle framework.  Reading William McDonough and Michael Braungart’s book when it was first published was a transformative moment in my life.  It focuses on most everything that is wrong with our industrial economy, a system devised for 19^th century needs, and they do it with a wonderful mixture of intelligence and humor.  Later in life, I helped persuade McDonough to deliver the keynote address at Urban Green Expo.  And one of my fondest memories is of spending two surreal early morning hours at a hotel bar with Michael Braungart, talking about everything under the sun.  He’s one of the smartest people I’ve ever met, hilariously funny, and totally committed.

The panel this morning walked the audience through recent developments on the C2C front.  David Johnson from William McDonough + Partners spoke of small things, such as the release of LEED pilot credit #43 for the use of the Cradle to Cradle framework on building materials, and large, such as their recent projects.  These include the Ferrer Grupo building, which is shaped like butterfly wings in plans, and includes an atrium that will release huge quantities of local butterflies seasonally.  He talked about Martha Johnson (head of GSA) calling for her agency to base their future on a cradle to cradle framework.  Johnson is effectively the landlord of the federal government, so it’s a big deal that she is thinking like this.  David Johnson quoted her as saying, “What if disposal wasn’t disposal, what if disposal was pre-design?”

David Nieh, from a Chinese developer called Shui On Land, presented on a massive project in Dalian, China that included the C2C framework in their master planning.  His best line, “The most efficient form of transportation is ‘taking the eleven line’, otherwise known as using both of your legs.”

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Benchmarking!  Energy Use Intensity!  Just saying them out loud gets me pumped!  In some ways Greenbuild is a full-on geekfest.  The more technical and the deeper into the weeds a session promises to go the more excited most of us are for it to begin.  Today’s lunchtime roundtable on Benchmarking is a case in point.  Measuring your energy and water use.  Reporting it online and comparing the numbers to your peers.  It’s not exactly Cirque du Soleil but if you understand the challenges that confront our building industry you know that just knowing how much energy you use is the first baby step in reforming the performance of our buildings.

The roundtable today brings together experts on the subject from New York City and Canada to compare and contrast the systems used, share the lessons learned in each system and discuss the potential challenges that remain and what can be expected in the near term.  It was an impressive collection of folks, including representatives of the NYC Mayor’s office, US EPA, Canadian Green Building Council, Natural Resources Canada and many others.

The Canadian benchmarking program is similar to the US EPA Energy Star program.  It’s voluntary, for instance, and some of our discussion focused on the impact if NYC’s Greener, Greater Buildings Plan- which mandates benchmarking.  On the one hand, voluntary benchmarking has, of course, low participation.  But mandatory benchmarking, while creating a much greater data pool, may encourage gaming a system that is, by necessity, a self reporting process.  Obviously, because I am familiar with the NYC program I found the Canadian program the most interesting.  They have been through a couple rounds of reporting and are starting to see the returns on retrofits.

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An early start at Greenbuild this morning with a really fun session on the next generation of LEED.  Scot Horst of the USGBC moderated the 90 minute program which was modeled after Shakespeare’s play, The Tempest.  Seriously.  There were “players” acting scenes while Scot delivered quotes from the play.  Sounds corny, I know.  But it worked pretty well.  My guess is that he was inspired by the setting- the “room” was actually a traditional theater, with raked floor, raised stage and a hanging mezzanine.  Each session in that space today is an “Act” and each speaker a “Scene.” The individual speakers were great.   Lauren Riggs from the USGBC talked about the metric reporting they hope to provide to those that have signed on to their Building Performance Partnership.  Garvin Cardi from Christman Company talked about their new headquarters building in Lansing (more on this, below).  And Marcus Sheffer of 7group talked about creating positive feedback loops that span the divide between completion of construction and occupancy.  I chose the session to see my YR&G colleague, Lauren Yarmuth, present on building a culture within an organization.   She used her own stories and a series of photos, several of which were laugh out loud hilarious, to describe the continual journey and the constant attention needed, to build and maintain a sense of community.

On a more nuts and bolts level, Garvin Cardi from Cristman talked about the development of their headquarters in Lansing, Michigan.  The project got a lot of attention from the green building community for being “double Platinum”- for both LEED Core & Shell and Commercial Interiors (for their offices’ portion of the building.)  It was singular for being achieved in a landmarked building (it received significant historic building tax credits) and was one of the very first applications of underfloor air distribution in an existing building.  Michigan State University did an extensive study of the health and productivity of the building occupants and found solid evidence of reduced absenteeism, less asthma and generally happier employees.   Despite these solid results, when looking at their utility bills, Cardi found a problem. They were using twice as much energy as expected- even though people were generally very comfortable.  Their Energy Star score was 35.  Which is appalling.  So they spent a year commissioning their systems and found that without proper attention to the building controls they had systems like the perimeter heat in the underfloor cavity that were running full tilt, every hour of the year.  Through improvements of these systems, documented through the LEED-EBOM process they improved their Energy Star score to 81 (which is stellar) and became one of the first triple-platinum projects in the country.

Photo credit: The Christman Company and Gene Meadows

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Greenbuild: Tuesday
Greenbuild: Benchmarking Roundtable
Greenbuild: Cradle to Cradle
Greenbuild: Finale

“So, which lowers my carbon footprint the most, solar thermal for hot water or photovoltaics?”  (A review of the two technologies is here.) A colleague has bought a house in Brooklyn and wants to make it as green as possible.  I think you’ll be hearing a lot more about this house as time goes by, but let’s look at this question now, because it’s actually possible to answer it.

But first, a little ecological scolding:  You know before you go solar you should plug leaks, insulate pipes, caulk windows and doors, insulate roofs and walls and purchase efficient appliances, right? It’s boring, it’s not glamorous, and it won’t get you into Dwell magazine, but it is what you owe your mother, the earth.  And by the way, have you called her lately?

That said, why choose? Why not do both? Well, the roof is only 20 feet by 45 feet, and the fire department needs a six-foot passage, and there’s a stairwell and skylights and…So there may be room for some of both but certainly not all you want. Which comes first?

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