Energy Efficiency: A Better Plan

Concern over global climate change and national energy security continues to grow. Policymakers are now looking to the built environment for a solution to ever-increasing greenhouse gas emissions. Their reasoning is that “buildings are responsible for 70 percent of electricity use” and, by extension, 40 percent of carbon emissions. While it is true that electricity is consumed in buildings for a variety of purposes, the direct carbon emissions from buildings are much lower—around 9 percent—and these are associated with the direct combustion of fossil fuels for heating or hot water. The lion’s share of the carbon emissions that the building sector has been tagged with are indirect emissions. (In contrast, virtually all of the emissions associated with the transportation sector are direct carbon emissions.) Unfortunately, specific building science data regarding technical aspects of improving performance to standards proposed at the federal, state and local levels are lacking, leaving developers and policymakers speculating about the cost-effectiveness and technical feasibility of various energy efficiency improvements in multifamily buildings. Impossible to recapture costsThe National Multi Housing Council and National Apartment Association have commissioned a new report to fill that gap and to examine the costs, benefits and practical limitations of making large increases in energy efficiency in a typical apartment building. Strategies and Costs to Exceed ASHRAE 90.1-2004 Requirements in a Multifamily Apartment Building is based on research conducted by Newport Partners LLC, a consulting firm with extensive expertise in building science and energy efficiency technologies. It illustrates what kinds of energy conservation measures are realistic for the multifamily sector. It was supported by the National Association of Realtors, the Institute of Real Estate Management and the CCIM Institute.The study found that exceeding ASHRAE 90.1-2004 by 30 or 50 percent will present practical and financial barriers for apartment owners and developers. In fact, it won’t be possible for most buildings of the type studied to achieve a 50 percent increase over ASHRAE 90.1 using today’s technology. Even where energy efficiency increases of 30 percent or more are technically achievable, the costs would be nearly impossible to recapture, according to the report. This is significant because proponents of strict energy efficiency standards often argue that increased upfront construction and equipment costs are paid back through operational savings. However, the study found that the payback period for high-efficiency systems will often extend beyond the expected life of the equipment, or at least the time when replacement components are needed. For example, a 30 percent improvement in Atlanta would cost up to $8,000 per unit and have a payback period of 16 to 25 years.The study also discusses the limitations of energy conservation proposals that peg energy savings to existing energy codes. Contrary to popular opinion, the scope of these codes is extremely narrow, covering only uses related to the building envelope such as insulation levels, window efficiency and heating, ventilation and cooling (HVAC) equipment. These codes do not regulate residential appliances, like refrigerators, washing machines and home lighting, which account for more than 65 percent of energy use in residential buildings. A codes-based approach to energy conservation puts extreme pressure on owners and developers to upgrade only specific building characteristics, while leaving the vast majority of energy use unaffected. This highlights an important message for policymakers to understand: because the large majority of energy used in an apartment powers appliances in the unit, a 30 or 50 percent increase in code requirements will not result in a 30 or 50 percent decrease in whole-building energy consumption.The study concludes that some often-promoted energy efficiency measures, such as window improvements and added insulation, only increase building performance by 1 percent, or less in many cases. This finding is significant because many proposed building code changes are directed at these particular building attributes. Instead, building owners and designers should place more emphasis on higher-efficiency HVAC systems. A building can achieve the 15-percent efficiency target through the use of conventional, high-efficiency HVAC equipment alone in two of the three locations studied (Houston and Chicago). Significant efficiency gains can also be realized through improvements in water heating, advanced in-unit lighting and the use of onsite renewable power generation. These items are also outside the scope of current energy standards, and therefore the energy savings they produce are not counted in the math used to determine whether a property complies with a “better-than-code” efficiency mandate.The primary benefit of this study is to help multifamily firms select the most appropriate energy efficiency investments for their communities. It will help educate policymakers and code officials about what energy improvements are technically feasible and cost-effective in apartment communities. Because the study clearly explains how the economics of the apartment sector make it difficult for owners to recoup the costs of some energy improvements, it underscores the need for greater financial incentives rather than top-down requirements for energy-efficient building upgrades. Doug Bibby is the president of the National Multi Housing Council in Washington, D.C.