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Posted on July 19, 2010

The Trouble with Commercial Buildings

Last week, San Francisco nonprofit Next 10 released a study showing that the electricity consumed by commercial buildings makes up a staggering 37 percent of California’s total electricity consumption — a ringing endorsement for telecommuting.

For all of California’s green creds, it seems like commercial buildings may be our weak spot. In fact, according to Next 10, only 60 percent of all new commercial building construction meets California’s own energy efficiency standards.

More than a few relatively simple retrofits could put us back on track. In fact, energy efficiency improvements could cut usage by 80 percent, according to the report.

Last week’s study, upon digging a little deeper, was produced by Collaborative Economics, which also concluded in its annual Index of Silicon Valley for Joint Venture: Silicon Valley Network that office vacancy rates in San Jose are at their highest since 1998 — and were up 33 percent in 2009 over 2008.

As the study rated the various economic drivers for Silicon Valley — foreign talent, investment capital, venture capital — I began to wonder how energy efficiency would’ve been graded. Is the region a leader or a laggard, and how is that affecting its economic prospects?

Besides privately owned commercial buildings, many commercial buildings are owned by the State of California, which is in need of the savings projected in the Next 10 report. Plus, energy efficient buildings retain higher real estate value, command higher rents (six to seven percent) and maintain higher occupancy rates than less efficient buildings, according to the report.

The California Building Industry Association said it believes California’s energy efficiency standards for new construction should apply to older developments as well. Indeed, the Next 10 report confirms that California has no energy efficiency standards for existing building stock, which it cites as a substantial opportunity for energy savings.

But, new commercial buildings are missing out on energy savings of their own.

With a minimal two percent increase in construction costs, new buildings can be designed to use one-third to one-half less energy than they use today. For example, the report notes that simply improving lighting technology could reduce energy usage by 20 percent.

While there is much opportunity, energy efficiency projects in commercial buildings also face serious challenges. The report goes on to suggest that such challenges can be overcome through actions taken at the federal, state and local levels that raise energy efficiency standards and support the broad application of high-efficiency products and practices.

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