As a wave of environmental awareness continues to take the world by storm, it is important for property owners to recognize that there are many shades of green. Even on a small budget, improved energy efficiency can have a variety of benefits. Environmental gains will appear through drastic decreases in water consumption and electricity use, and satisfaction will come in the form of economic dividends. These include lower energy costs, qualification for tax breaks and rebates and the ability to market a property to buyers or tenants as being environmentally friendly.
Most “green” building publicity in the past has gone to new construction projects and their pursuit of LEED certification. While the program is admirable, it excludes almost all real estate investors who own structures built long before architecture paid any mind to environmental concerns. For this reason, it is crucial for some attention to shift towards the many inexpensive energy efficiency solutions relevant to all existing properties.
Large corporations such as Wal-Mart look to industry leaders such as Amory Lovins, co-founder of The Rocky Mountain Institute, an energy efficiency research and consulting firm, for advice on efficiency increases. Lovins, who coined the term “negawatt” in the keynote speech at the 1989 Green Energy Conference in Montreal.said significant corporate profits can be attained through decreases in energy demands. Originally a macro idea, this mindset can be utilized on a smaller scale by owners of both residential and commercial property.
Energy efficiency projects come in all shapes and sizes, ranging from as simple as changing light bulbs to as complex as performing a complete remodel. One great source for detailed renovation ideas is the book Green Remodeling: Changing the World One Room at a Time, written by David Johnston and Kim Master in 2004. Remodeling an entire building will result in the largest efficiency gains, but can become quite expensive. Often, when cost is a major concern, making a few minor changes will be the most practical strategy.
The easiest and least expensive solutions involve lighting, showerheads and thermostats. Regular incandescent light bulbs use technology that has been obsolete for some time; they lose most of their energy as heat instead of light. Compact fluorescent light bulbs (CFLs) use about 75 percent less energy to produce the same amount of light, and will last up to 10 times longer. While they may cost a few dollars more up front, each CFL bulb will save around $30 in energy costs over its lifetime according to Energy Star, a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy.
Replacing showerheads is also an easy, low-priced and painless adjustment. Showers account for 18 percent of indoor water use and 37 percent of a home’s hot water use, according to GreenBuilding.com. A high performance showerhead using 1 to 1.5 gallons per minute will use up to 60 percent less water than a traditional showerhead. This minor adjustment will pay for itself in a few months through energy savings.
When used properly, programmable thermostats will save about $150 in electricity costs annually, according to Energy Star. Whether residential or commercial property, it is likely that for a large portion of the day any given building will be unoccupied. By customizing a schedule for heating and cooling, excess use can be cut back a surprising amount.
Replacing old appliances with newer, more efficient models will also significantly improve energy efficiency and save money. Energy Star certifies efficient appliances that use 10 to 50 percent less energy and water than standard models. While slightly more expensive, these products will save money over their lifetime, and possibly could qualify buyers for tax rebates in certain areas. “An ENERGY STAR qualified clothes washer can save…$550 in operating costs over its lifetime compared to a regular clothes washer,” according to Energy Star.
The typical hot water heater, consisting of a 40-gallon tank, is an efficiency nightmare. Water is kept hot at all hours, running up the electricity or natural gas bill, even though hot water is actually needed only a few times each day. To solve this conundrum, many in the U.S. are adopting a technology widely used in Europe and Japan. “Tankless water heaters can cut your water-heating energy bill in half if you currently heat with natural gas, and by 70 [percent] if you use electricity to heat the water,” according to The Clean Tech Revolution, by Ron Pernick and Clint Wilder. Lasting twice as long as the average tank water heater, tankless water heaters will save consumers up to $2,000 during their 20-year life span, according to estimates by Energy Star.
Innovation continues to provide consumers with a variety of alternative products that are environmentally friendly. Branded Logic is changing the world of building insulation with its Ultra Touch line that includes insulation made from recycled denim. Using scraps from blue jeans manufacturers and donations from the public, this insulation is just one example of how the “green” attitude is affecting the construction industry.
Environmental benefits can easily be seen in the efficiency improvements shown above. What aren’t as apparent are the benefits that property owners will enjoy if they follow through on any of these ideas. Because investing in property is a long term venture, it is important to look at the savings that will be experienced years down the road rather than at a comparison of up-front purchase costs.
Even with the current price premiums on many energy efficient technologies, savings can be realized sooner by taking advantage of the many existing rebate programs. The federal tax credit program for home improvement expired Jan. 1 of this year, but many opportunities still exist to earn discounts on purchases of energy efficient products. For a comprehensive list of available tax incentives and utility rebates, visit the Database of State Incentives for Renewables and Efficiency.
Aside from energy savings, property owners cannot afford to ignore the power of green marketability. Announcing an improvement in energy efficiency could increase the number of interested renters or buyers, potentially allowing an owner to lease or sell a property at a higher price. For those who own a building in which they operate their own business, efficiency innovations could lead to an improved public image, resulting in more business.
If environmental awareness continues to spread, the demand for energy efficient property will surely grow. “The built environment is responsible for nearly half (48 [percent]) of all U.S. energy usage and (76 [percent]) of electricity demand,” according to The Clean Tech Revolution. These statistics give insight into the important role “green” products and properties will play in years to come. Investments in efficiency made today, no matter how small, will help property owners maximize the economic rewards from holding environmentally friendly real estate in the long run.