Overcoming Barriers to Efficiency

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© 2005, American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc. (www.ashrae.org). Reprinted by permission from ASHRAE Journal, (Vol. 47, No. 9, September 2005). This article may not be copied nor distributed in either paper or digital form without ASHRAE’s permission.

Overcoming Barriers to Efficiency
By Thomas M. Lawrence, Member ASHRAE, Jeffrey D. Mullen, Douglas S. Noonan, and Jay Enck, Member ASHRAE

C

ommercial and residential buildings consumed approximately 39% of the total energy used in the United States in 20021

with the remaining used in the industrial (33%) and transportation (28%) sectors. Approximately 4.6 million commercial buildings exist in the United States.2 Of these, 68% of the non-governmental buildings are owner-occupied, and the rest are leased or vacant. More than 90% of buildings owned by the U.S. federal government are owner-occupied.3 The majority of energy use is devoted to space conditioning, lighting and other equipment. Figure 1 shows energy consumption in commercial buildings. Barriers to Installation of High-Performance HVAC Equipment

the viewpoint is different depending on whether the particular building is occupied by the owning entity or is leased. For owner-occupied buildings, the utility and capital expenses are ultimately included in one corporate budget. Thus, decision processes become a justification of any additional expense for higher performing equipment relative to the expected returns via lower energy costs. In an existing building, business management principles determine the evaluation process. The decision is influenced by whether modifications are necessary About the Authors Thomas M. Lawrence is with the faculty of engineering and Jeffrey D. Mullen is an assistant professor in the Department of Agricultural and Applied Economics, University of Georgia, Athens, Ga. Douglas S. Noonan is an assistant professor in the School of Public Policy, Georiga Institute of Technology, Atlanta. Jay Enck is a principal and founder of Commissioning and Green Building Services LLC, Buford, Ga.

to higher performance HVAC equipment. The following section discusses barriers we have identified. These also are summarized in Table 1. Building Ownership

Many factors influence a decision on whether additional expense is allocated S40

While all situations can be summarized in terms of justifying a cost expenditure compared to other options for the capital,

Building for the Future | A Supplement to ASHRAE Journal

September 2005

When only tangible or more easily measured cost savings are considered, energy cost saving projects often perform poorly compared to other core business activity alternatives. (servicing or replacement) or purely for improved performance. More flexibility exists in new construction because necessary energy-consuming equipment must be installed anyway. Equipment performance selected depends on the business model and external factors such as building codes or standards. The option being considered will be evaluated against other competing projects for capital resources. When only tangible or more easily measured cost savings are considered, energy cost saving projects often perform poorly compared to other core business activity alternatives. For buildings not owner-occupied, two separate entities must be considered: the owner and the lessee. This situation becomes a dilemma when neither party has a strong incentive to make the investment in higher efficiency equipment. If the building owner purchases or builds with the intent to later sell or lease, then alternatives that increase the attractiveness of the building to future owners or lessees (in property values or potential leasing prices) warrant further consideration. Current market conditions also play a significant role. The commercial real estate market is cyclical. In good economic times, the market for leased space will be tight and owners can obtain attractive prices...
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