How to Cut Energy Costs in Half

The Rocky Mountain Institute’s recently published guide, How to Calculate and Present Deep Retrofit Value: A Guide for Owner-Occupants, de-mystifies the value of enacting a retrofit and breaks down the process into four general steps:
  • Developing an initial hypothesis that there is value
  • Calculating and presenting that value
  • Moving towards the project and setting up the way to measure progress/value
  • Ultimately drive and increase investment in efficiency and sustainability
Read on for more details about — and a link to — the guide, and a Q+A with co-author, Michael Bendewald.
Artwork courtesy of RMI.

Calculating and presenting the value of a deep energy retrofit is easier than it sounds, insists Michael Bendewald, a senior associate at the Rocky Mountain Institute. And it will save your company gobs of money.

“A whole building retrofit can save upwards of 50 percent of the energy costs,” he said. “The Empire State Building has pioneered the idea of commercial buildings doing it.” That highly publicized retrofit, begun in 2010, is on track to cut the building’s energy consumption by at least 38 percent.

Bendewald is a co-author of How to Calculate and Present Deep Retrofit Value: A Guide for Owner-Occupants, published in January by the Rocky Mountain Institute. RMI is nonprofit committed to driving the efficient and restorative use of resources; guides like this one serve that mission.

“Each section in the guide goes into quite a bit of detail around what links energy and efficiency to data, and how to present it to leadership,” said Bendewald. “The idea is the open up peoples’ thinking on what all the values are, and to provide a checklist.”

“It’s good for corporate real estate execs down to property managers — whoever is putting together business cases for retrofits,” said Bendewald. “It’s also useful for designers when they’re talking to clients.”

Bendewald told us more in a phone interview:

Who is a prime candidate to enact a deep retrofit?

From a portfolio management standpoint, a deep retrofit can actually be very useful as a way to learn about particular building types. You’re doing a deep analysis of one building. If you’re managing many buildings, you want the lessons learned from that one deep retrofit.

Another reason to do it is that you have a very large capital expenditure coming for the building, for example, a heating or cooling replacement, or replacing windows. It makes sense to do a deep retrofit at that time to capitalize on the money you’ll be spending anyway.

Tenant rollover and occupancy changes — that’s another good opportunity to really think through What is the best design for this building?

A lot of companies and organizations are capturing the low hanging fruit of energy efficiency and there’s a lot being talked about the co-benefits — we call it value beyond energy savings. People have an idea that there’s greater value, but they don’t know how to calculate it or talk about it to the CFO.

And that’s where the guide comes in, right?

The guide sums up all the existing research and provides a framework for putting together the business presentation. It’s intended to be something that sits next to your monitor and you use it to put together these capital requests.

There are nine “value elements” in the guide. We don’t expect everybody to focus on all nine — they’re there to help users identify areas of focus.

1. Retrofit Development Costs

2. Non-Energy Property Operating Costs

3. Retrofit Risk Mitigation

4. Health Costs

5. Employee Costs

6. Promotions and Marketing Costs

7. Customer Access and Sales

8. Property-Derived Revenues

9. Enterprise Risk Management/Mitigation

What’s your pitch – what do you say to folks when they’re like, “Why should I enact a deep retrofit?”

Well, [our goal is] to see this methodology used at all the major organizations. We want to eliminate the way people feel when faced with the uncertainty of presenting these benefits and we think that we can dramatically increase energy efficiency.

We know of groups that are already doing this on an ad-hoc basis; what we want to do is work with those groups to get them to use this methodology, see if helps them frame up value in a more systematic way. People are already doing this in parts and pieces — to do it more efficiently, they need this guide.

Click here to download your own copy of the guide.

This interview has been edited and condensed.

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