The energy efficiency retrofit market recently received a major boost from the American Recovery and Reinvestment Act of 2009 (ARRA), which will provide substantial funding for renovations to institutional buildings, especially federal buildings. The institutional market is booming now, and activity initiated in the next few years will continue through 2013 and beyond. However, federal non-industrial buildings represent a small fraction of all existing commercial building space. The largest potential for long term, sustained growth in commercial building retrofits lies in the private commercial space. Although relatively small at present, this market will experience strong growth through 2013 and for many years beyond. Compared to conventional space, high-performance green building space is vacant less often and commands premium prices, leading commercial building owners to adopt green retrofits as a market differentiator. Unlike government policies that come and go, this market driver will fuel steady momentum until most commercial building space has been retrofitted for energy efficiency and also for other measures of building performance such as thermal comfort.
Several substantial, durable drivers are expanding the potential market for energy efficiency retrofits. However, the actual market is small compared to its potential, due to an assortment of barriers within various niches. In order for marketing campaigns and public policies to promote energy efficiency produts, services and programs succesfully, the barriers within each target segment of the commercial real estate market must be addressed appropriately.
This Pike Research report provides an overview of the market niches formed by questions such as ownership, occupant activity, and geographic location. We examine the primary market barriers and highlight the best practices that are addressing these barriers successfully today. The report features a comprehensive examination of several key vertical markets, including an assessment of drivers, barriers, and opportunities in each one. Based on projections of the timing for widespread barrier removal, we forecast the market growth of both enhanced operations & maintenance as well as major green renovations over the next five years.
Key questions addressed:
- Where are the biggest opportunities to save energy (which building activities, regions, and owners)?
- How will federal legislation affect the energy efficiency retrofit market?
- Which retrofit practices are the most cost-effective and value-enhancing?
- What are the primary challenges and opportunities for energy efficiency retrofits, for each market segment?
- What present and future best practices will address these challenges and opportunities?
- What technologies, programs, and policies will expand very rapidly in the next 5 years?
Who needs this report?
- Energy Service Companies (ESCOs)
- Manufacturers of new green building technologies for the retrofit market
- Policy makers and program managers of federal and state initiatives for energy efficiency
- Construction professionals seeking to expand from new construction into retrofits
- Board members of organizations that own commercial real estate
- Board members of academic institutions
- Building owners and property managers
Table of Contents
1. Executive Summary
2. Market Issues
2.1 Introduction
2.2 Demand Drivers
2.2.1 Holistic benefits of green building: opportunities in a down market
2.2.1.1 Employee productivity
2.2.1.2 Intangible branding
2.2.2 Awareness
2.2.2.1 Split incentive: individual vs. society and planet
2.2.3 Certification
2.2.3.1 LEED
2.2.3.2 Energy Star Portfolio Manager
2.2.3.3 ISO 14001 (minor)
2.2.4 2030 Challenge
2.2.5 Legislative and regulatory incentives and drivers
2.2.5.1 Indirect benefits
2.2.5.2 Decoupling utility profits
2.2.5.3 American Reinvestment and Recovery Act of 2009
2.2.5.4 Reinvestment and Recovery Act, part II
2.2.5.4.1 The two-year, nine million jobs investment plan
2.2.5.5 Tax credits and incentives
2.2.5.6 Regulations
2.2.5.7 Energy efficiency portfolios
2.2.5.8 Carbon cap and trade
2.2.6 Appraisal and valuation
2.3 Market Segmentation
2.3.1 Introduction
2.3.1.1 Centralized vs. local control in each segment
2.3.2 Market segments, building activity, and ownership
2.3.2.1 Introduction
2.3.2.2 Office
2.3.2.3 Education
2.3.2.3.1 K-12
2.3.2.3.2 CHPS
2.3.2.3.3 LEED for schools
2.3.2.3.4 Colleges and universities
2.3.2.3.5 Challenges
2.3.2.3.6 Opportunities
2.3.2.4 Warehouse and storage
2.3.2.5 Retail
2.3.2.6 Lodging
2.3.2.7 Healthcare
2.3.2.8 Food sales and services
2.3.3 Market segments, ownership
2.3.3.1 Credit availability
2.3.3.2 Private owner occupied
2.3.3.3 Private lease
2.3.3.4 Public
2.3.3.5 Federal government
2.3.3.6 State and local government-owned facilities
2.3.4 Market segments, building size
2.3.5 Market segments, building age
2.3.6 Market segments, regional
2.3.7 Summary
2.4 Energy Efficiency vs. Comprehensive Green Update
2.4.1 Productivity
3. Energy Efficiency Products and Services
3.1 Financial
3.1.1 Performance Contracting
3.1.1.1 ESCO
3.1.2 Purchase-upgrade-leaseback
3.1.3 Financing through property taxes and utility bills
3.1.4 Self-financing supply chains / alternative currencies
3.2 Cultural
3.2.1 Changing habits
3.2.2 Popularity: energy efficiency vs. renewable energy
3.3 Software
3.4 Hardware
3.4.1 Shell and lighting
3.4.1.1 Greenroof
3.4.2 HVAC
3.4.3 IEQ
3.5 Holistic Approach
3.5.1 Building commissioning
3.5.2 Integrated Design
3.6 Durability
4. Examples of Industry Players
4.1 Introduction
4.2 Aquaproducts
4.3 Daylighting and Energy
4.3.1 Kalwall
4.3.2 Southwall
4.3.3 Sunoptics
4.4 ESCO
4.4.1 Johnson Controls
4.4.2 Siemens
4.5 Class Green Capital
5. Market Forecasts
5.1 Carbon cap and trade
5.2 ESCO market
5.3 Building certification
5.4 Potential energy efficiency market, major and minor
5.4.1 Introduction and methods
5.4.2 Minor upgrades
5.4.2.1 Results
5.4.2.2 Minor upgrades, analysis
5.4.2.3 Conclusion, minor upgrades
5.4.3 Major upgrades
5.4.3.1 Results, major upgrades
5.4.3.2 Major upgrades, analysis
5.5 Market size
5.5.1 New green construction
5.5.2 Energy efficiency retrofits
5.5.3 Market forecast scenarios
5.5.3.1 Minor upgrade scenario
5.5.3.2 Major renovation scenario
5.6 Federal legislation
6. Company Directory
7. Acronym and Abbreviation List
8. Table of Contents
9. Table of Charts and Tables
10. Scope of Study, Sources and Methodology
Table of Charts and Figures
- Overview of Primary Factors in the Commercial Building Retrofit Market
- Summary of Key Facts and Figures for the Commercial Building Retrofit Market
- Relative Importance of Factors Influencing Adoption of Sustainable Building Practices
- U.S. Retail Gasoline Prices, 1990-2008
- Average U.S. Electricity Price per kWh Including Taxes: 1960-2007
- Commercial Space by Building Activity
- Energy Use by Commercial Buildings Built Before 2000, by Building Activity
- K-12 Enrollment: 1990-2017
- Post-Secondary Enrollment (Millions of Students)
- Food Sales and Services Centralization
- Government Space by Building Activity
- Total Building Space by Level of Government and Building Activity (BSF)
- January 2009 Scorecards of Federal Cabinet-Level Departments
- Total Area of Commercial Buildings by Size Category
- Number of Commercial Buildings by Size Category
- Total Square Footage by Age of Building
- Existing Space Constructed Before 2000
- Commercial Building Space by Age and Principal Activity
- Energy Use Per Unit Area in California Commercial Buildings: 1970-2005
- Energy Expenditures in Commercial Buildings by State
- Annual Energy Expenditure by State, Commercial Bldgs.
- Energy Efficiency Retrofit Challenges and Opportunities, by Market Niche
- Direct and Indirect Benefits, from Studies
- Smart Building Components
- Existing Commercial Floorspace with Popular Energy Efficiency Measures Installed: 1999 & 2003
- Energy Efficiency Tools Implemented by Building Activity
- Common Energy Efficiency Tools and Technologies, Organized by Cost
- U.S. ESCO Industry Annual Revenue for Energy Efficiency Retrofits: 1990-2013
- New Construction and Major Renovation (BSF), Total and Green Certified: 2008-2020
- New Construction and Major Renovation, Energy Star & LEED-EB Buildings: 2008-2020
- U.S. Commercial Building Space by Age and Activity
- Space that Could Benefit from Energy Efficiency Improvements by Building Activity
- Buildings that Would Benefit from Enhanced O&M: Cost to Launch and Annual Savings
- Buildings that Would Benefit from Enhanced O&M: Incremental Savings over 5 Years
- Buildings that Would Benefit from Major Energy Efficiency Upgrades, by Building activity
- 25% Growth in Major EE Upgrades to Renovate all Building Stock by 2030: 2009-2030
- Revenue Forecast for Enhanced O&M, by Building Activity and Manager: 2009-2013
- Revenue Forecast for Major Green Renovations, by Building Activity: 2009-2013
Table of Tables
- U.S. Retail Gasoline Prices (Regular)
- Average U.S. Electricity Price per kWh Including Taxes: 1964-2007
- Commercial Space by Building Activity
- Energy Use by Commercial Buildings Built Before 2000, by Building Activity
- K-12 Student Enrollment: 1990-2017
- Post-Secondary Student Enrollment: 1985-2007
- Government Space by Building Activity
- Total Area of Commercial Buildings by Size Category
- Number of Commercial Buildings by Size Category
- Existing Commercial Building Space Constructed Before 2000
- Commercial Building Space by Age and Principal Building Activity
- Energy Expenditures in Commercial Buildings by State: 2006
- Annual Energy Expenditure Share by US State, Commercial Buildings
- Energy Use by Activity & Building Age
- Existing Commercial Floorspace with Popular Energy Efficiency Measures Installed: 1999 & 2003
- Energy Efficiency Tools Implemented by Building Activity
- U.S. ESCO Industry Annual Revenue for Energy Efficiency Retrofits in Commercial Building, 1990-2013
- Annual New Construction and Major Renovation (BSF), Total and Green Certified: 2008-2020
- Annual New Construction and Major Renovation (BSF), Energy Star and LEED-EB Certified Buildings: 2008-2020
- U.S. Commercial Building Space by Age & Activity
- Space that Could Benefit from Energy Efficiency Improvements, by Building Activity
- Buildings that Would Benefit from Enhanced Operations & Maintenance, by Building Activity: Cost to Launch Program and Annual Savings
- Buildings that Would Benefit from Enhanced Operations & Maintenance, by Building Activity: Incremental Savings During 5-Year Ramp-UP
- Buildings that Would Benefit from Major Energy Efficiency Upgrades, by Building Activity
- Annual Revenue Forecast for Enhanced Operations & Maintenance, by Building Activity & Manager: 2009-2013
- Annual Revenue Forecast for Major Green Renovations, by Building Activity & Owner: 2009-2013
- Commercial Space Renovated with Excellent Energy Efficiency: 2009-2030
