How Green Buildings Save Greenbacks

Commercial Energy Conservation, Published under cc_licenseAt Legend Power we are noticing an interesting shift in attitudes about energy efficiency. Instead of choosing energy efficiency for environmental reasons only, companies are now talking about the financial benefits of doing so.

In fact, newspapers are now covering this angle more easily given the industry data available that reinforces the financial sense of going green. The Wall Street Journal reported on January 6 that, according to a new study from venture capital firm Good Energies Inc., half of non-residential buildings will be green by 2015.

In particular, WSJ is referring to results released in November 2009 by Gregory Kats, managing director of Good Energies. The results of Kats’ two-year independently funded study are available in a book called Greening Our Built World.

According to the Wall Street Journal:

Kats and his partners interviewed 100 architects working on 170 green non-residential buildings, mostly located throughout the U.S. He also obtained information from the USGBC, the American Institute of Architects, the American Public Health Association, the National Association of Realtors, BOMA International, the Federation of American Scientists, the Real Estate Roundtable, the National Association of State Energy Officials, Enterprise Community Partners and the World Green Building Council.

The interesting shift in attitude here is that “Green Buildings”–buildings that use fewer resources to build and to sustain—are commonly thought to be too expensive to attract builders and buyers. But the costs are not as high as expected.

Kats’ study provides detailed findings on the costs and financial benefits of building green. According to the study, green buildings cost roughly 2% more to build than conventional buildings—far less than previously assumed—and provide a wide range of financial, health and social benefits. In addition, green buildings reduce energy use by an average of 33%, resulting in significant cost savings.

The study provides a large enough, detailed enough body of data to say that green building is very cost-effective and “it reduces risk in a number of areas including health, exposure to energy and water prices and obsolescence,” says Kats.

In addition for real estate investors, energy efficiency measures, whether introduced at the building stage or in retrofits, enhance real estate portfolios

A new report, “Energy Efficiency in Real Estate Portfolios: Opportunities for Investors” (PDF), was commissioned by Ceres and authored by the responsible investment group of the investment consulting business Mercer.

The report draws on key industry and academic research on building efficiency’s economic impacts. It also shows that “proven, existing efficiency technologies — in everything from lighting to climate control and more — can unlock the untapped reserves of efficiency gains buried in many real estate holdings” (Source: GreenerBuildings, December 24, 2009)

Those gains would be a boon to real estate investors’ bottom lines—both direct property owners like large pension funds and smaller investors who primarily hold real estate securities.

So whether it’s making a new building less power-hungry or conserving energy in an existing building, both efforts combat climate change and leverage efficiency to achieve cost and risk reductions.

For more information, see our case studies from industry leaders showing the positive impacts of voltage optimization on power and electrical costs.

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The Legend Power Harmonizer has received the 2005 Canadian Energy Efficiency Grand Prix Award and been recognized under the Energy Star Partner program.