While considered a major undertaking, the retrofitting or renovation of old building environments is a worthy enterprise in the effort to produce a more sustainable business. The US Department of Energy’s report, “Business Case for Energy Efficient Building Retrofit and Renovation,” enumerates and expands upon the current retrofitting and renovation market, reasons for commissioning these projects, common challenges, and the benefits that ultimately come from transforming environments into energy efficient operations.


Retrofit and Renovation Market Activity and Sizing
There is much potential for growth in this arena and nearly all (91%) of the firms surveyed in the report have undertaken energy efficiency upgrades on buildings in their portfolio in the last two years. However, many respondents are expecting to reduce the number of buildings they intend to upgrade in the coming years. In light of this, a strong business case for energy efficiency improvements is needed to encourage a better efficiency market over the coming years.


Reasons
Utility cost savings, market differentiation, public expectation, competitive advantage, regulation requirements, and customer need are listed as the most common drivers for a business to engage in sustainability activities. These reasons have generally been found to be major influencers for all sectors.


Obstacles
Certain challenges must be considered when beginning a project of this nature. The top three are:

• Budget: 85% of energy efficiency projects are financed through company profits or operational budgets. Savings stemming from other energy efficiency efforts can also be a useful funding source.
• Measuring ROI: “Many benefits from increased sustainability—including competitive advantage and employee satisfaction—are influenced by factors other than sustainability adoption. Therefore, it is very difficult to link those advantages directly to sustainability efforts.”
• Implementation: Implementing a venture of this scale can prove to be difficult. However, with the growth of companies that specialize in executing sustainable projects, this obstacle is becoming less of a concern.

Benefits
Despite the challenges, a firm can usually expect to see:

• Expected operating cost decrease: Most of the companies surveyed within the report (98%) expected to see drops in their energy and operating costs.
• Better ability to measure benefits: “More than double the number of firms in 2010 were able to measure operating cost savings as compared to 2009—increasing to 21% from 9%.” This is an important factor to consider as quantifying results makes for a powerful tool in presenting the case for efficiency improvements.
• Greater productivity: 60% of firms expected to see an increase in productivity due to sustainability efforts.

Case Studies
Knowing that changes are necessary, Walmart has kept a steady pace in its energy efficiency efforts despite the economic downturn. New construction and renovation projects that incorporate green building elements have been undertaken, all of which include efficient light technologies. Investments into renewable energy such as solar energy have also been implemented.
Hines, a developer and builder of commercial properties, has found a key component in achieving energy efficiency goals is to educate and inform building management staff on energy performance improvement. The company makes certain to emphasize this aspect of construction when inducting new hires. 
Other businesses ranging from universities to hospitals have commissioned retrofits and are beginning to incorporate renewable technology into their everyday building operations. Flexibility and employee engagement are important to the success of these continual improvements.

Looking forward
The future holds exciting transitions for renewable energy to be used in conjunction with energy efficiency for low carbon building environments. In 2007, the EnergyIndependence and Security Act charged the U.S. Department of Energy to achieve market-ready solutions for Net Zero Energy (NZE) commercial buildings by 2030 with the goal of converting all existing building stock to NZE by 2050. These buildings combine high energy efficiency measures with renewable energy to allow the building to use no more energy than it generates.

Have you begun any retrofitting and renovation projects? If so, what are the greatest challenges your business has faced?

Watch Low Carbon Retrofit Best Practice: Lessons from the Better Buildings Partnership to find out more about retrofits and renovation.