Industry Research and Recommendations for Small
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Industry Research and Recommendations for Small Buildings and Small Portfolios Rois Langner, Bob Hendron, and Shanti Pless National Renewable Energy Laboratory Mark Huppert and Ric Cochrane Preservation Green Lab, National Trust for Historic Preservation NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency & Renewable Energy Operated by the Alliance for Sustainable Energy, LLC This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications. Technical Report NREL/TP-5500-57776 December 2013 Contract No. DE-AC36-08GO28308 Industry Research and Recommendations for Small Buildings and Small Portfolios Rois Langner, Bob Hendron, and Shanti Pless National Renewable Energy Laboratory Mark Huppert and Ric Cochrane Preservation Green Lab, National Trust for Historic Preservation Prepared under Task No. BEC8.1115 NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency & Renewable Energy Operated by the Alliance for Sustainable Energy, LLC This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications. National Renewable Energy Laboratory Technical Report 15013 Denver West Parkway NREL/TP-5500-57776 Golden, CO 80401 December 2013 303-275-3000 • www.nrel.gov Contract No. DE-AC36-08GO28308 NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof. This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications. Available electronically at http://www.osti.gov/bridge Available for a processing fee to U.S. Department of Energy and its contractors, in paper, from: U.S. Department of Energy Office of Scientific and Technical Information P.O. Box 62 Oak Ridge, TN 37831-0062 phone: 865.576.8401 fax: 865.576.5728 email: mailto:[email protected] Available for sale to the public, in paper, from: U.S. Department of Commerce National Technical Information Service 5285 Port Royal Road Springfield, VA 22161 phone: 800.553.6847 fax: 703.605.6900 email: [email protected] online ordering: http://www.ntis.gov/help/ordermethods.aspx Cover Photos: (left to right) photo by Pat Corkery, NREL 16416, photo from SunEdison, NREL 17423, photo by Pat Corkery, NREL 16560, photo by Dennis Schroeder, NREL 17613, photo by Dean Armstrong, NREL 17436, photo by Pat Corkery, NREL 17721. Printed on paper containing at least 50% wastepaper, including 10% post consumer waste. Acknowledgments The authors would like to thank Glenn Schatz, Arah Schuur, and the U.S. Department of Energy (DOE) Building Technologies Office (BTO) for supporting the project. This report was prepared by the National Renewable Energy Laboratory (NREL) under Project ID NREL-FY-13-02. Thank you to the many members of the Small Buildings and Small Portfolios (SBSP) community who contributed input and feedback on the SBSP sector and provided recommendations on approaches to address energy efficiency in the sector. We would also like to acknowledge Maureen McIntyre, Natalie Gregory, and the NREL communications team for editing and reviewing the document. This report is available at no cost from the National Renewable Energy Laboratory (NREL) iii at www.nrel.gov/publications. Nomenclature AERG Advanced Energy Retrofit Guide ASHRAE American Society of Heating, Refrigerating and Air- Conditioning Engineers BOMA Building Owners and Managers Association BPD Building Performance Database BTO Building Technologies Office CBECS Commercial Buildings Energy Consumption Survey DEEP Deep Energy Efficiency Potential DOE U.S. Department of Energy EEM energy efficiency measure EERE DOE Office of Energy Efficiency and Renewable Energy ESCO energy service company EUI energy use intensity HVAC heating, ventilating, and air conditioning NREL National Renewable Energy Laboratory NSBA National Small Business Association PPA power purchase agreement PGL Preservation Green Lab SBA U.S. Small Business Administration SBSP Small Buildings and Small Portfolios This report is available at no cost from the National Renewable Energy Laboratory (NREL) iv at www.nrel.gov/publications. Executive Summary Small buildings have been left behind in the energy efficiency marketplace because financial and technical resources have flowed to larger commercial buildings (PGL 2013). DOE’s Building Technologies Office (BTO) works with the commercial building industry to accelerate the uptake of energy efficiency technologies and techniques in existing and new commercial buildings (DOE 2013). BTO recognizes the SBSP sector’s potential for significant energy savings and the need for investments in resources that are tailored to this sector’s unique needs. The industry research and recommendations described in this report identify potential approaches and strategic priorities that BTO could explore over the next 3–5 years that will support the implementation of high-potential energy efficiency opportunities for this important sector. DOE is uniquely positioned to provide national leadership, objective information, and innovative tools, technologies, and services to support cost-effective energy savings in the fragmented and complex SBSP sector. Properly deployed, the DOE effort could enhance and complement current energy efficiency approaches. For this report, small buildings are defined as buildings smaller than 50,000 ft2; however, the average small building is smaller than 8,000 ft2. Small portfolios are loosely and qualitatively defined as portfolios of buildings that include only a small number of small buildings. This distinction is important because the report targets portfolio owners and managers who generally do not have staff and other resources to track energy use and pursue energy efficiency solutions. Research conducted as part of this effort identified a number of challenges to the adoption of energy efficiency solutions. SBSP owners and operators and the third-party service providers who cater to them are often hard to reach, and the sector’s fragmentation has created many barriers that prevent businesses from aligning their operation goals with energy conservation goals (PGL 2013). The largest reported barriers include: • Limited capital • Higher transaction costs relative to energy cost savings • Lack of time to research and implement energy efficiency solutions • Split incentive obstacles between owners and tenants • Lack of available sector-specific resources and technologies. Market barriers also exist. Service providers, utilities, and financial institutions often cater to larger players because energy savings in bigger buildings provide faster and more attractive returns on investment. In addition, energy efficiency solutions are more easily adopted and disseminated across sizable building portfolios because energy savings are typically larger relative to the transaction costs. Further, convenience and emotional drivers typically motivate decisions in the SBSP sector (PGL 2013). In many ways, the SBSP sector is more similar to the residential building market than to the large commercial sector. This is particularly true of the relative resources small This report is available at no cost from the National Renewable Energy Laboratory (NREL) v at www.nrel.gov/publications. building owners and homeowners have available to pursue energy efficiency, as well as their risk profiles and creditworthiness. Owners and operators are concerned about increases in energy costs, but many lack the time and capital to spend on anything unrelated to day-to-day operations. Even when small building owners want to improve energy efficiency, few reliable, accessible, affordable, and user-friendly tools and resources are available. They may understand the potential return on investment, but lack the resources to invest in detailed energy audits and comprehensive financial analyses. Hence, there is a gap between stakeholder interest in reducing energy costs and actions that improve energy efficiency. This gap strongly indicates a need for additional support to improve energy efficiency in this sector. Despite the challenges, the size of the SBSP sector makes it an attractive opportunity, for the following reasons: • More than 90% of U.S. commercial buildings—a total of 4.6 million—are smaller than 50,000 ft2 (CBECS 2003). • These buildings account for 51% of total floor space (CBECS 2003). • The average small commercial building is smaller than 8,000 ft2 (PGL 2013). • The sector consumes more than 40% of the energy used in U.S. commercial buildings, offering large potential energy savings (CBECS 2003). One study estimates that a well-designed SBSP initiative could result in 1.07 quadrillion Btu of site