This weekend, June 20–22, the American Institute of Architects’ annual convention comes to Denver, Colorado. The event coincides with the release of “Deep Energy Retrofits: An Emerging Opportunity,” published jointly by the AIA and RMI. The guide makes the case for architect-led deep energy retrofits and offers guidance on how architects can increase their participation in the energy efficiency retrofit market. This blog post is adapted from that work.
It is no secret that the architecture profession is struggling. The recession has devastated architectural practices across the country; in the past three years, the employment rate among architects has declined by 28 percent. Recent graduates with degrees in architecture report the highest unemployment rate in the country at 13.9 percent. Is architecture becoming the Rust Belt of professions? It doesn’t have to.
Crisis reveals opportunity, and architects are now leading in uncovering new sources of revenue while addressing unemployment, building real estate value, lowering energy costs, and reducing environmental degradation. The secret to this potential future success involves looking to the recent building past: retrofits. The 2012 AIA Firm Survey showed that architecture firms received 42 percent of their billings from renovation projects. For smaller firms, the majority of billings come from renovation projects.
And a central aspect of retrofits is energy efficiency.
Energy Efficiency Market Opportunities Abound
The promise of the energy efficiency retrofit market is the sheer number of old buildings in the United States. The U.S. Energy Information Administration estimates that 72 percent of the U.S. building stock is over 20 years old. It is possible to retrofit many of these buildings to perform substantially better, thus unlocking value that is currently trapped in the nation’s building stock. Savvy building owners, design and construction professionals, investors, and government officials are beginning to understand that energy efficiency is not only about preserving the environment; it also represents hundreds of billions of dollars in potential value.
Though estimates vary, market analysts agree that the energy efficiency market is huge. A March 2012 joint report by the Rockefeller Foundation and Deutsche Bank Climate Change Advisors estimated that improving efficiency by 30 percent in the nation’s pre-1980 building stock yields an investment opportunity of $279 billion dollars, which if invested, would result in $1 trillion dollars in energy cost savings over 10 years.
But where would those billions of dollars of initial investment come from?
Growing Momentum for Energy Efficiency Retrofits
One encouraging sign is that financial institutions are seeing the value of energy efficiency … and putting up the cash to make energy-efficient retrofits a reality. For example, Barclays Capital has committed a $650 million line of credit to the Carbon War Room’s PACE Commercial Consortium for building retrofits in California and Florida. Wells Fargo likewise provided or raised about $2 billion for energy efficiency retrofits in 2011. In addition, utility spending on energy efficiency programs more than doubled from $2 billion to $4.8 billion 2006 to 2010, and is expected to double again by 2025.
To a degree, this market in energy-efficient retrofits is inevitable; it’s coming whether financial institutions get on the front end of financing it or not. As energy codes become more stringent and as building owners increasingly recognize the economic benefits of energy-efficient buildings, more and more of the nation’s building stock will be retrofitted for energy efficiency.
We’re already seeing an uptick in interest among building owners. The market demand for energy efficiency is rising as those in the commercial sector are recognizing the substantial benefits of improving the performance of their buildings. Not only are operating costs reduced, tenant retention is improved and property value increases. To wit, a 2011 survey of American businesses by McGraw Hill Construction showed that 78 percent of respondents planned energy efficiency upgrades in their building portfolios.
Such growing momentum behind energy efficiency is already being seen in the architecture field. The AIA 2012 Firm Survey showed that since 2005, sustainable/green design was the fastest growing design specialty by far.
Going deeper to unlock greater value
Too often, however, energy retrofits achieve only modest energy savings because energy service providers focus on replacing outdated engineering systems with more efficient technologies, with little regard to how the space planning and envelope affect energy performance. “Deep energy retrofits,” on the other hand, result in energy savings upwards of 50 percent. These deep retrofits better tap into the growing momentum behind energy-efficient retrofits and sustainable/green design trends, and provide even greater value for clients than conventional energy retrofits—saving building owners more money, further reducing carbon emissions, increasing employee satisfaction, improving occupancy rates, and boosting resale value.
And deep retrofits have the potential to be a new and robust source of business for architects, who are well positioned to lead the way.
Enhancing architects’ role
To get to “deep” we cannot rely on procurement of more efficient equipment alone. Deep energy savings comes from design-centered, holistic approaches to a retrofit in which all the interactions in a building’s systems are considered. The design leadership and thought integration process that architects practice is key to revealing cost-effective building load reduction, yielding substantially higher energy savings. Architects who recognize this fact and acquire the skills and experience to lead deep energy retrofits will stand to gain immensely.
Deep energy retrofits represent the best way for architects to access a major new source of revenue and to continue to demonstrate their role as foremost experts on the needs and performance of the built environment.
To complete deep energy retrofit projects successfully, the standard architectural education and skillsets are needed, but you will also need to be proficient in new energy efficiency-related skills. These include recognizing buildings that are ripe for a high-performance building retrofit, energy modeling, determining project goals, life cycle cost assessment, applying multiple design strategies to optimize energy savings, commissioning, measurement and verification, and methods of financing energy efficiency retrofits. Depth of knowledge in all these areas is less important than the ability to access the knowledge and design skill in integrating the information.
There is no design professional better qualified than the architect to ensure that deep energy retrofits are carried out according to smart, integrated design principles to maximize retrofit energy savings. Architects have played—and will continue to play—an integral role on the teams of energy service companies (ESCOs), a rapidly growing field. But architects can strengthen their position in the field; they have a chance to establish themselves alongside engineers and contractors as energy efficiency experts whose skills are needed to deliver optimal energy savings.
We can and must embrace deep energy retrofits to help drive economic growth, reduce energy consumption, mitigate climate change, and help the architecture field rebound from a recent job recession. Upgrading the nation’s buildings could be a boon to the struggling architectural profession. For architects, the way of the future may be to go retro.
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