Require retrocommissioning upon resale or renovation of commercial buildings

Article
Require retrocommissioning upon resale or renovation of commercial buildings

Annual savings potential:
Annual public cost:
Public cost per ton:
Implementing agency:
Horizon year:
18,300 tons
$200,000
Less than $5
Department of Building Inspection
2010

Assumptions
  • Recommissioning typically reduces building energy use by 15 percent
  • Recommissioning initially costs building owners 17 cents per square foot, net of the PG&E rebate, but pays for itself in less than one year
  • Life cycle of energy efficiency improvements is 10 years


Analysis
A requirement for existing commercial buildings to undergo an energy performance study and make cost-effective upgrades — retrocommissioning — would benefit San Francisco’s emissions profile and building energy bills. The challenges to implementing this strategy are twofold: the upfront cash needed by building owners to implement recommendations, and the principal-agent problem of tenants typically bearing the costs of energy inefficiency to begin with. To get around these problems, the City could create or seek private financing for a revolving loan fund to help pay for improvements. The City instead could allow for the regular pass-through of costs to tenants, or could do this in addition to the revolving loan fund. Imposing a retrocommissioning requirement whenever a property is sold or is the subject of smaller renovations would be a cost-effective way to obtain emissions reductions from existing buildings that aren’t otherwise covered by the Green Building Ordinance.

Relative impact
In 1990, commercial buildings were responsible for 16 percent of San Francisco’s greenhouse gas emissions and 33 percent of the emissions from buildings.

What we do now
San Francisco’s new Green Building Ordinance requires fundamental commissioning — ensuring the optimal energy performance of building systems — for new large commercial buildings and for existing buildings undergoing major renovations. Retrocommissioning, or recommissioning, is the study of the energy performance of existing buildings to ensure that building systems such as lighting and HVAC are working as intended. A retrocommissioning study typically finds operational inefficiencies and recommends cost-effective improvements. It rarely finds a need for expensive capital improvements, but rather suggests ways to fine-tune systems and implement energy efficiency upgrades. Commissioning is a component of new green building construction standards under LEED and Energy Star.

A retrocommissioning requirement for large commercial buildings is similar to the requirement of a home energy performance test of residential buildings. However, retrocommissioning is not just the test, but also the implementation of the cost-effective improvements the test identifies. Currently, PG&E provides a rebate of 10 cents per square foot for a retrocommissioning assessment. The rebate is contingent on the building owner being able to implement the recommended measures within 12 months of the assessment.

What we could do
Retrocommissioning can be an expensive up front investment for building owners and managers. The median per-project cost identified in the LBNL study was $34,0001. San Francisco could target retrocommissioning requirements for specific building types and vintages to make the requirement most efficient. To ease the burden, some kind of public financing could be linked to a requirement to conduct retrocommissioning when a building is sold or is remodeled in any way that requires a building permit from the Department of Building Inspection. Given the cost-effectiveness and short payback time of retrocommissioning, San Francisco could create a revolving loan program rather than providing a subsidy in the form of a rebate. Borrowers would be able to pay back the loans after recouping their costs through energy savings.

Cost
A 2004 nationwide study of 150 large buildings by Lawrence Berkeley National Laboratory found that retrocommissioning costs averaged approximately 27 cents per square foot. It also determined that that the process saved an average of 15 percent of building energy use and paid for itself in less than one year.2

As with other potential energy efficiency requirements, the Department of Building Inspection would require additional spending to ensure compliance. We include a DBI cost of $200,000 in staff time and resources to effectively administer this requirement.

Carbon Savings Potential
Approximately 18.5 million square feet of office, hotel, retail and other commercial space was transferred in 20073. If commercial buildings that are recommissioned upon resale can improve their energy profile by 15 percent, approximately 18,300 tons of carbon could be saved4. After 10 years, 183,000 tons will be abated annually.

The cost per ton of carbon borne by the City is about $1. Although it would probably pay for itself within one year, the up front private cost of retrocommissioning 18.5 million square feet would be about $3.1 million, or $18 per ton.SPUR logo


Endnotes

1 This included a variety of building types, including office, education, health care, lodging and public safety. The median year of building construction was 1978.
2 Mills, Evan et al., “The Cost-Effectiveness of Commercial-Buildings Commissioning: A Meta-Analysis of Energy and Non-Energy Impacts in Existing Buildings and New Construction in the United States”, Lawrence Berkeley National Laboratory, Dec. 15, 2004.
3 Data including square footage and building type provided by the City Assessor’s Office. 4 Carbon-equivalent emissions per square foot by building type obtained from new Lawrence Berkeley National Laboratory energy benchmarking Web site, energyiq.lbl.gov/benchmark.html.