Bottom-Line Benefits of Green Building for Profitability and the Environment

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Green building is not just a hot trend. The numerous business and environmental benefits of highly efficient buildings ensure that green buildings are the face of the future.

Building owners are becoming increasingly aware of the incentives for going green on new and existing buildings. Energy is the single largest operating expense in a typical commercial building, and energy bills for commercial buildings total about $100 billion per year. Building owners have a major opportunity to save on energy costs by creating high-performance buildings that use less energy and cost less to operate and maintain.

According to the U.S. Department of Energy (DOE), adopting energy-efficient designs and technologies for new office buildings can cut energy costs by as much as 50 percent and can yield savings of up to 30 percent in existing buildings by replacing older systems. Furthermore, despite what some building owners may believe, there are not high additional costs associated with green construction. Developments in technology, energy services, and government incentives make it a very cost-effective way to achieve better building performance, particularly on a life-cycle basis.



In addition to reduced operating costs, energy-efficient buildings increase worker productivity, reduce facility shut-down times, and are more valuable and desirable assets. According to EnergyStar, a joint program of the U.S. Environmental Protection Agency and the DOE, every dollar invested in energy efficiency can add up to $3 in building asset value.

High-performance systems can also increase business performance and worker productivity by an average of five percent, according to data from the Institute for Market Transformation to Sustainability. A report by the Rocky Mountain Institute and the U.S. Green Building Council (USGBC) found productivity gains from green design as high as 16 percent. Green buildings offer better indoor comfort and air-quality control, which leads to less environmental and health costs associated with air pollution by reducing the risk of illness and increasing productivity.

Building green also has a significant positive impact on the environment. For example, electricity demand is expected to outpace current capacity in New York by 2012. A major part of that demand comes from buildings, which emit 79 percent of the global warming gases in the city. By using green building techniques, building owners can reduce their use of natural resources and lower green house gas emissions.

Incentives to make buildings more energy efficient are also offered through various local and state governments, distributed either as rebates or through tax credits or deductions. The Database of State Incentives for Renewables and Efficiency (DSIRE) offers a comprehensive list of state incentive programs, as well as rules, regulations, and policies.

The industry benchmark for building green is USBGC’s Leadership in Energy and Environmental Design (LEED). LEED-certified buildings use only 20 to 50 percent of the energy that typical buildings use, and emit 40 percent fewer carbon emissions. All 50 states now have LEED projects completed or in progress.

Building owners have several options to increase the efficiency of their buildings. Energy modeling software is used to assess and improve the efficiency of buildings through a sophisticated software tool that recreates building systems in a simulated environment. The simulation displays the building’s systems and their interactions to show how the building is currently operating and demonstrates how the systems affect energy performance. Once the model is complete and verified, you can virtually run the building in software. This provides a powerful resource for making infrastructure changes in a virtual environment and testing a variety of solutions to determine which would function best in the building.

A recent energy model developed for a Trane financial services client identified a clear benefit to installing a crossover connection between office and data center systems. This application provided energy savings by sharing building system resources under specified load conditions.

There are several energy conservation measures that building owners can implement, which range from renewable energy technologies to relatively simple upgrades. The following are some examples of this type of technology.
  • Ice Storage Systems: Generate ice at night when energy costs are low, and the next day, the ice melts and cool energy is released for air conditioning. Trane recently installed ice storage systems for Credit Suisse in the 1.9 million-square-foot Metropolitan Life Tower in Manhattan, and they now save $1 million or more each year in energy costs as a result of the system. Furthermore, the environmental benefits are equivalent to taking 223 cars off the street or planting 1.9 million acres of trees to absorb electricity usage.

  • Solar Photovoltaic: Devices that use semiconducting materials to convert sunlight directly into electricity.

  • Geothermal Systems: Transfer heat stored in the earth or in ground water into the building during the winter, and transfer it out of the building, back into the ground during the summer.
The green building industry has experienced phenomenal growth throughout the country. The numerous benefits of high-performance buildings, combined with rising energy costs and government pressure to combat global warming, suggest this growth is likely to continue. Building owners have a tremendous opportunity to help the environment, while increasing their financial performance.

About the Author

Richard Halley is District Manager of Trane New York/New Jersey. Trane is a leading global provider of indoor comfort systems and comprehensive facility solutions, including energy-efficient heating, ventilating, and air conditioning (HVAC) systems. Trane’s NY/NJ office is the leading indoor comfort solutions provider for more than 10,000 buildings in the area.
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