Improving Building Energy Profiles: What It Will Take

By Doug Bibby, president, NMHCAs Multi-Housing News reports nearly every month, concern over global climate change and national energy security continues to grow. Moving beyond automobiles, 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, therefore, 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.) Numerous legislative proposals at the state and local levels have sought to increase energy efficiency requirements in apartment buildings anywhere from 15 to 50 percent over existing energy conservation standards.Legislation has been advanced at the federal level that would require all buildings to achieve increases in energy efficiency levels of at least 30 percent by 2015 and 50 percent by 2022, compared to the 2006 International Energy Conservation Code (IECC) or ASHRAE 90.1 (2004). Although this measure was not included in the final Energy bill signed into law last year, it remains a provision of a climate change bill that is scheduled to be voted on by the Senate in June.Unfortunately, specific building science data regarding the technical aspects of improving building performance to these levels are lacking, leaving developers and policymakers speculating about the cost-effectiveness and technical feasibility of various energy-efficiency improvements in multifamily buildings. The National Multi Housing Council (NMHC) and National Apartment Association (NAA) 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, an independent consulting firm with extensive expertise in building science and energy-efficiency technologies, and it illustrates what kinds of energy conservation measures are realistic for the multifamily sector. The National Association of Realtors (NAR), the Institute of Real Estate Management (IREM) and the CCIM Institute are all supporting the initiative. How did they do it?Newport Partners started by designing a “base building,” which typifies new apartment construction found in markets across the U.S. The firm then used that prototype to run extensive computer simulations to assess building energy performance in three cities—Houston, Atlanta and Chicago–which represent a broad mix of climates found in the U.S. The simulations show what products and practices are needed to exceed existing building energy code requirements by 15 percent, 30 percent and 50 percent as well as the corresponding costs of those investments. ASHRAE Standard 90.1-2004 was used to establish the baseline code requirements because it is one of the most widely adopted energy conservation standards in the U.S. and many legislative proposals specifically reference it. What They Found?The study found that exceeding ASHRAE 90.1-2004 by 30 percent or 50 percent will present practical and financial barriers for apartment owners and developers. In fact, it will not 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 associated 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 significant 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 energy uses related to the building envelope; things like 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. Therefore, a codes-based approach to energy conservation puts extreme pressure on owners and developers to upgrade specific building characteristics, while leaving the vast majority of building 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 one 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. In fact, 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 that it can help multifamily firms select the most appropriate energy-efficiency investments for their communities. It will also help educate policymakers and code officials about what energy improvements are technically feasible and cost effective in apartment communities, and which are not. Finally, 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, DC.)