Untapped Potential Of Commercial Buildings: Energy Use and Emissions

July 1, 2010

A new study identifies commercial buildings as a stealth drain on the state's energy resources and economy. The report, UNTAPPED POTENTIAL OF COMMERCIAL BUILDINGS: ENERGY USE AND EMISSIONS, produced by Collaborative Economics for Next 10, finds that the energy efficiency or lack thereof in commercial buildings has a significant impact on California's economy, the state's overall energy use, global warming pollution emissions and jobs.

Highlights of the study :

  • Electricity consumed by commercial office buildings represents 37 percent of california's total electricity consumption. Based on the U.S. average, energy efficiency improvements could cut that usage by 80 percent.
  • Only 60 percent of all new commercial building construction meets California energy efficiency standards. With a minimal two percent increase in construction costs, new buildings can be designed to use one-third to one-half less energy than they use today.
  • Only three percent of all buildings are newly constructed or renovated every year.
  • California has no energy efficiency standards for existing building stock, which could yield substantial savings in energy.
  • Energy efficient buildings retain higher real estate value, commanding higher rents (6-7 percent) and maintaining higher occupancy rates than less efficient buildings.
  • Simple energy efficiency improvements to existing buildings, such as insulating window films, yield three dollars in savings on average for every dollar invested.
  • In existing buildings, split incentives, elevated hurdle rates, upfront capital costs, and an information gap diminish large-scale adoption of energy retrofits.
  • In new commercial construction, a lack of incentives for developers and ineffective installation and inspection methods are barriers to energy efficiency efforts.
  • Much can be achieved through actions taken at the federal, state and local levels that raise efficiency standards, align incentives, and support the broad-based application of high-efficiency products and practices.