The upcoming decade will likely see massive investment in US buildings. This movement is being fueled in part by the federal government’s focus on improving energy efficiency and increasing the development and deployment of renewable energy. Industry is following suit, leveraging federal funding to create new technologies and build more sustainably, while capturing both cost savings and improving customer relations. According to the Department of Energy, buildings consume 40% of primary energy in the US1—making buildings the prime target for both government and industry programs.
Allocated funding associated with energy as part of the American Recovery and Reinvestment Act (ARRA) is $36.7 billion2, and these monies will be multiplied by matching private investments. Consider one program, the Weatherization Assistance Program (WAP), which over the last 32 years spent $5.6 billion weatherizing 6.2 million low income homes.3 With ARRA funding, WAP will receive $5 billion allowing the program to double its prior output in an accelerated timeline.4
So what will this movement do to our homes and offices where we live and work?
The changes will likely be considerable and broad-reaching since both new construction and existing buildings will be impacted.
Smarter Buildings
Since the 1970s, the energy efficiency of most electrical equipment inside buildings has improved. Everything from refrigerators to air conditioners has lower energy consumption at increased performance. Although this trend will likely continue being led by both industry groups and government programs like EPA’s Energy Star, the next biggest opportunity for improvement will be in linking all of these energy consumers to each other and to the electrical generation and distribution system to create smarter buildings.
Smart building technology will allow building systems to react in real time to maintain comfort levels and services at minimum energy levels. Going beyond programmable thermostats, building systems will be able to shut-down and restart entire circuits preventing losses from vampire loads and preventing appliances from operating during unoccupied periods. Furthermore, integration with utility systems will also allow price discrimination to drive behavior as customers can choose whether or not to reduce energy use and cost. Networking costs have significantly decreased, particularly with the advent of low cost wireless solutions, such as Zigbee, which are designed to minimize the installation material and labor costs that historically had adversely impacted retrofitting an existing facility.
Location, Location, Location
A slower change, but perhaps the largest, may be the location of buildings—or more accurately stated, the co-location of buildings. The concept is old. Create an integrated community where people can live, work, and play within walking distance. Link these communities with efficient public transportation. Location and site selection are primary elements of the US Green Building Council’s LEED certification programs including the recent creation of the LEED Neighborhoods standard. As municipalities integrate LEED into building code and builders strive to meet customer demand for greener facilities, location will be a major driver in construction decision making.
The impact on our fuel consumption from reducing the amount of mileage driven by the average American could outweigh improvements in fuel efficiency, at a lower cost to consumers. Every business is likely impacted by these sweeping changes, and not having a strategic plan or assuming business as usual could lead to lost opportunity.
Ali Ahmed
Deloitte Consulting LLP
1 Department of Energy, Energy Information Administration Annual Energy Outlook 2008
2 Department of Energy ARRA funding from DOE website http://www.energy.gov/recovery/index.htm
3 Weatherization Assistance Program Technical Assistance Center briefing book and website, http://www.waptac.org
4 “Weatherization Assistance Program – The American Recovery and Reinvestment Act of 2009” fact sheet from the Department of Energy