Connecticut’s energy costs are among the highest in the nation, giving birth to Gov. M. Jodi Rell’s “OneThing Campaign,” which, among other things, exhorts business owners to create more energy-efficient buildings by upgrading existing building systems and controls.
Unfortunately, many Connecticut building owners have done little to increase energy performance, often because they are not aware that cost-effective technology is available today. Or they don’t know how to take advantage of rebates, incentives, loans and tax credits available to them to offset the costs.
Becoming energy efficient is now more than a push for environmental responsibility; it’s an appeal to the wallet.
Contrary to popular belief, energy efficiency is not a drain on operating costs. Investments in energy efficient upgrades often offer a greater return on investment than investments in a company’s core business. For example, upgrading mechanical systems to improve energy efficiency may return more to the company’s income statement than adding production equipment.
Energy efficient building systems cost as little as 1 percent more up front. And the payback can come in as little as two years, allowing the company to save millions over the entire life of the systems, which may be 20 years or more.
Plus, energy efficient buildings are more valuable assets. Buildings consume one-third of all energy worldwide, and energy is usually the largest line item in a company’s annual operating budget. Saving on energy bills contributes directly to the building’s net operating income.
According to a recent study by the Burnham-Moores Center for Real Estate at the University of San Diego, the value of retrofitting energy efficient systems is greater than the cost. In addition, technologies like geothermal and ice storage, which pump energy from underground and use ice made during off-peak hours to cool buildings during peak energy usage hours, respectively, can ensure additional savings. And the technology is reliable and widely available.
Yet, it’s not only building owners who stand to benefit. Occupants are often the biggest winners. Higher efficiency systems offer greater control and programming, which creates a more comfortable environment. It’s no surprise that more comfortable employees work harder and longer. In fact, organizations that implement energy-efficiency measures outperform their competitors by as much as 10 percent.
The trend toward upgrading systems and controls in Connecticut buildings has quickly evolved from a good idea into a mandate — starting first with public buildings. In fact, any new construction that receives more than $5 million in state funding, or renovation that receives $2 million in state funding must meet requirements equivalent to a LEED (Leadership in Energy and Environmental Design) Silver rating or risk losing its public funding. Beginning in 2009, this policy will extend the same criteria to schools funded with state bonds.
As of January, the state building code has required that buildings and building elements be designed to provide optimum cost-efficiency over the life of the building.
In response, the governor’s “OneThing Campaign,” details a list of rebates and incentives that many Connecticut building owners have yet to address.
For example, Connecticut Cool Choice provides a rebate of up to $200 per ton (up to 30 tons) for energy efficient upgrades.
And the Energy Conscious Blueprint initiative provides up to $200,000 annually for new construction as well as renovations and equipment replacement projects including HVAC chillers, lighting and lighting controls.
Perhaps most significantly, the state has authorized $30 million in bonds to fund the net costs of energy efficiency projects in state buildings.
In short, state policy makers have realized that increasing energy efficiency in buildings is a quick and meaningful way to maximize existing resources.
Energy efficiency has evolved from a social issue to a strategic and financial one as well.
The “OneThing” the Connecticut business community has yet to do is take advantage of all this. It’s time.
Bill Harris, Vice president of Trane Inc., Leads the company’s commercial business in Connecticut.
©2007 Hartford Business Journal
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