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Four Strategies to Tap Efficiency Opportunities in Small-to-Medium-Sized Buildings

June 27, 2013 By Mike Kaplan

Mike Kaplan

When it comes to energy efficiency, small-to-medium-sized buildings are often the forgotten segment. On one end of the spectrum, there is significant excitement around innovative new products and enterprise-wide initiatives to save energy in large buildings. And on the other end in the residential segment, there is a continued emergence of programs tailored to changing consumer behavior, for example.

A recent report issued by the National Trust for Historic Preservation concludes that “profitable investments in energy conservation can generate $30 billion in annual energy cost savings” in small buildings, but much of the opportunity is not being captured.

Why have utilities, energy services providers, contractors, policy makers, and product vendors had difficulty developing programs and strategies to wring out large amounts of savings from these energy consumers? Small-to-medium-sized buildings have two characteristics that combine to make it a challenging segment to address: 1) there are 4.7+ million buildings in the United States that are less than 100,000 square feet, requiring efficiency programs to be delivered at scale; and 2) to maximize savings, these buildings require a comprehensive, and sometimes complex, set of efficiency solutions — much like larger buildings.

To overcome these barriers, we need to re-think and re-tool small-to-medium-sized building energy efficiency programs. Here are four strategies to do that.

1) Focus on the right buildings. With the volume of buildings that make up this segment, it’s simply not plausible to go to take a one-by-one approach. It’s also not smart: Data from several portfolios analyzed by Retroficiency’s platform suggests that 30% of the buildings typically account for 70% of the efficiency opportunity in a given portfolio.

Understanding and prioritizing by energy savings potential is critical to optimize targeting. Energy savings potential can also be layered into other customer segmentation approaches.

2) Tailor the message. Property owners and tenants in small-to-medium-sized buildings wear many hats, and they only have limited time to play energy manager. It’s important to engage these customers quickly with meaningful insights about how their building is consuming energy today, and the steps they need to take to reduce usage.

Engaging these customers with energy efficiency goes beyond building science. The owner of the corner pizza shop has a different knowledge base and different motivations than the property manager of a mid-sized office building, so being able to communicate building opportunities in a digestible way is necessary to get customers to move to the next step.

3) Deliver a complete solution. Historically, efficiency programs for small-to-medium-sized buildings have been narrowly focused on a few measures such as lighting. But changing the lights, for example, represents less than one-quarter of the opportunity based on thousands of buildings Retroficiency has analyzed.

Comprehensively evaluating a building for all potential energy conservation measures — including heating, cooling, ventilation, plug loads and more — is necessary to provide the best package of financially attractive operational measures and building retrofits. This approach helps ensure that energy audits convert into real projects with deep savings. If necessary, it also allows customers to start with low-cost, high value measures — such as operational changes — to demonstrate savings before moving onto larger projects.

Stakeholders in small-to-medium-sized buildings may also require expertise to take advantage of available utility incentives and third-party financing options. Being able to package financing or streamline the rebate process with measure offers can accelerate implementation.

4) Prove out the savings, rinse, and repeat. Too often, stakeholders at small-to-medium-sized buildings do not know whether the energy conservation measures implemented actually performed as expected. Because variables such as weather conditions and occupancy impact how much one’s energy bill is each month, teasing out the true energy savings from a measure is difficult.

This uncertainty lessens the likelihood of doing projects in the future. Utilities, energy service providers, and product vendors need to take a more proactive role in demonstrating savings to the customer if they want repeat efficiency business.

Finally, the data captured throughout this process is incredibly valuable and should be captured to re-target and re-engage customers. The price of efficiency technologies and availability of utility incentives is evolving constantly, so an efficiency upgrade that doesn’t make sense today may make sense in the future. Shifting the efficiency process from a static event to a dynamic one will help us save more energy at a lower cost.

The benefits of better building targeting, more effective engagement, comprehensive evaluations and solutions, and dynamic tracking are undeniable. The question then becomes, how can we achieve this across such a large swath of small-to-medium-sized buildings? One part of the answer lies in enabling this process through emerging data analytics and rapid energy modeling designed to dramatically streamline the process.

Sound strategy, good policy, and innovative technology can drive deeper savings at a fraction of the time and cost across in small-to-medium-sized buildings, as well as the entire building stock.

Mike Kaplan is the vice president of marketing at Retroficiency. Retroficiency enables utilities and energy service providers to drive energy efficiency savings at scale. For more information, please visit www.retroficiency.com.



One comment on “Four Strategies to Tap Efficiency Opportunities in Small-to-Medium-Sized Buildings

  1. In addition to these excellent strategies, we might want to focus on the matter of expenditure. Smaller buildings usually look for cost-effective solutions that increase their energy efficiency, while also offer relatively quick payback periods. In our case, we offer window films as a cost effective solution for reducing heat gain in buildings with typical ROI of 2-3 years

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