News Brief

When Investing in Energy Retrofits Makes Sense

Thoughtful analysis and spending across the portfolio can result in bigger savings, says the Rocky Mountain Institute.

June 5, 2018

Rocky Mountain Institute report on portfolio energy retrofits.

The report focuses on how to apply the same analysis criteria across the portfolio to maximize return on investment.

Image: Rocky Mountain Institute
Retrofitting buildings for energy savings can save money in the long run, but deciding when and how to invest can be tricky—especially if you own multiple buildings. A new report from the Rocky Mountain Institute (RMI) offers advice on optimizing and prioritizing energy retrofits across the whole building portfolio to achieve maximum returns. RMI is a nonprofit focused on market-based solutions to moving beyond fossil fuels.

First, the report advises, portfolio owners should use the same methodology to analyze each building in the portfolio. That allows owners to compare apples to apples. At the same time, they can’t rely on the kinds of patterns investors often look for, warns Philip Keuhn, manager at RMI. “One strategy is to pilot projects in a couple of locations and then try to deploy that technology more broadly across the portfolio, based on climate or something like that,” he told BuildingGreen. But climate is far from the only factor to consider when determining how much investment makes sense, he said. Utility and regulatory incentives, and even lease structures, can make a big difference. A portfolio-wide analysis method should account for all of these factors.

The report also suggests prioritizing projects based on economics rather than energy savings. “At the end of the day, I think what we’re really trying to do is take the conversation about energy analysis off the table,” said Keuhn. Shifting to a discussion of return on investment means projects are more likely to get support. When you have “rigorous economic analysis backing up the request for funds,” he said, “it can really change how that conversation goes.”

The report also highlights the importance of focusing on long-term cash flow, leveraging economies of scale, and using a centralized database for building project information. The report can be downloaded for free from the RMI website.

More on retrofits and cost savings

Cost-Effective Green Retrofits: Opportunities for Savings in Existing Buildings

Retrofits a Better Bet Than Stocks and Bonds, Says Analysis

Deep Retrofits Next Market for Struggling Architects

For more information:

Rocky Mountain Institute
rmi.org

Add new comment

To post a comment, you need to register for a BuildingGreen Basic membership (free) or login to your existing profile.

Comments

June 18, 2018 - 7:17 pm

Organizations that own their own buildings have a greater incentive to look not only at energy optimization, but also workspace optimization.  The benefits to office or production employees who are able to control their own lighting and temperature may be significant.  If those benefits result in improved productivity or even fewer overall hours of sick time, this adds significant incentive for upgrades.   For measures such as higher quality LED lighting with user controls and building envelope measures that improve comfort - the economics of upgrades may shift significantly in favor.

July 10, 2018 - 4:55 pm

The RMI link is coming up funny saying "This connection is not private" and may be stealing info...  I go to RMI's website directly and it still won't download for me..https://rmi.org/our-work/buildings/commercial-portfolio-energy-optimizat...

July 11, 2018 - 10:30 am

John, thanks for pointing that out. It looks like you now have to visit a landing page and submit some info in order to download the report. I fixed the link in the article, so it now goes here: https://www.rmi.org/insight/capturing-value-portfolio-energy-optimization/