New Frontier for Energy Efficiency Emerges in Small Buildings

06/22/2015 10:26 am ET | Updated Jun 22, 2016

By Jim Lindberg, Senior Director, Preservation Green Lab, National Trust for Historic Preservation

Small business owners work hard to keep the lights on, so they often don't have time to think about the opportunity to strengthen their bottom line through energy efficiency improvements in their building. That's why the Preservation Green Lab of the National Trust for Historic Preservation is working with a national team of experts to test a program for pinpointing long-term energy cost savings in existing buildings. The America Saves program is using energy and building data to demonstrate the benefits of money- and energy-saving facility improvements.

Marge Anderson, executive vice president of Seventhwave, a leading energy nonprofit, and I recently spoke about America Saves and the challenges and opportunities that exist for enhancing energy efficiency in small buildings across the country. Here is a portion of that conversation:

Lindberg: Small buildings of less than 50,000 square feet represent 95 percent of total commercial buildings in the U.S., yet the majority of energy efficiency programs, incentives and financing are positioned to serve larger commercial buildings. Why is that and what are the most important steps in making more resources available for enhancing energy efficiency in smaller buildings?

Anderson: When serving one building at a time, it's cheaper to serve a large building with significant energy use and a single owner than to serve many smaller individual buildings with variable energy footprints and a variety of owners and decision-makers. Regulators generally require utility ratepayer-funded programs to meet rigid cost-effectiveness tests, and traditional financing programs target the greatest return on investment. So small buildings get left out, and we leave huge energy savings - and the comfort, health, maintenance, and environmental benefits that come with those savings - on the table.

Lindberg: A recent Preservation Green Lab report, Saving Energy, Money, and Jobs, highlights the energy efficiency potential of small, existing buildings and indicates that aligning the interests of small buildings and business owners with a delivery mechanism for energy retrofits could result in more than $240 billion in capital investment and 580,000 permanent jobs nationwide by 2050. What are the biggest barriers you see small business owners facing with regard to energy consumption and costs?

Anderson: Seventhwave's research shows that cash flow, customer service, and the community's economic health all occupy more of a small business owner's mindshare than energy. Energy program managers need to adopt the perspective of a small business owner and show how saving energy solves some of these other problems if we want to motivate business owners to take action on energy.

Lindberg: How is America Saves innovative in its approach in working to solve this problem?

Anderson: America Saves works through community economic development organizations to motivate small business owners. Business owners work with local people they already know. Saving energy becomes a norm in the community that benefits the bottom line, too. America Saves also reduces a business owner's hassle-factor by connecting her directly to existing local incentives and qualified contractors that can address specific actions that America Saves identified.

Lindberg: Why is enhancing the energy efficiency of small buildings more than just an important environmental or sustainability issue?

Anderson: Small businesses create so many jobs in this country, and most of those jobs are local. Everything we can do to make small businesses successful has a direct impact on the economic health of our communities. So many of these businesses operate at a small margin in the first place - lower energy bills make a big difference. Cutting energy costs is only part of the story - better approaches to energy also make spaces healthier and more comfortable for customers and employees of a business.

Lindberg: What can everyday people or small business owners do to help address this problem?

Anderson: Visit the America Saves website and contact your local economic development agency and ask if they have connections to the program. Also, contact your local utility to see what services they could have to offer in terms of assessing your energy use and incentives to reduce your energy use.

Lindberg: How has the relationship between the built environment and energy efficiency changed during your career, and where do you see things headed over the next decade?

Anderson: In the next 10 years, expect data-capturing technologies to give us more information than we've ever had to inform our approach to energy, water, waste, and human experience outcomes in buildings. And before 2025, building owners will demand verification of how much energy - and other resources - their buildings use.

Lindberg: Thank you, Marge. Greening our older, smaller buildings is so important. New buildings get a lot of attention, but new construction represents only about one percent of the market in any given year. We've got to help owners of existing buildings - the other 99 percent of the market - make smart investments that save energy and save money. That's the fastest way to reduce our carbon footprint.

For more information, visit the America Saves homepage.