The SAVE Act – Sensible Accounting to Value Energy

Lucas Hamilton

Lucas Hamilton is Manager, Building Science Applications for CertainTeed Corporation

We are seeing an increase in legislation to drive the energy consumption and retrofit message to homeowners.  One that can make a huge impact is The SAVE Act.  This legislation instructs federal loan agencies to assess a borrower’s expected energy costs when financing a home.  The average U.S. homeowner energy costs in 2008 were $2,278/year.  This exceeds the average property taxes where on average were $1,897.

The basic goals of this Act are to:

  • Enable better mortgage underwriting
  • Reduce utility bills for American homeowners
  • Provide affordable financing for home energy improvements
  • Spark job creation in the housing industry

There are several key supporters of this legislation within the build industry.  These are the U.S. Green Building Council (USGBC), International Code Council (ICC), Green Builder Coalition (GBC), American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE), and The Residential Energy Services Network, Inc (RESNET).

The two major components of the Act are the:

  • Affordability Test which accounts for expected energy costs along with other recurring payments in the debt-to-income qualifying ratio. So lenders would now be evaluating Principle + Interest + Taxes + Insurance + Energy, and
  • Loan to Value Adjustment which will ensure that the underwriting process consistently and accurately captures the added value of energy saving features, allowing homeowners to finance the cost of efficiency improvements as part of their mortgage.

The average home’s energy cost over the life of a 30-year mortgage is $60,000 and homes are responsible for nearly 25 percent of all energy consumed in the U.S.  The majority of our building inventory seriously needs energy upgrades to be current with the building codes.  Making it easier for homeowners to secure the financing to make energy updates is the best way to move the needle which we discussed in a blog last year.

Do you have any thoughts about The SAVE Act?

Walking the Walk with the Better Buildings Challenge

John Marrone is Vice President, Energy Initiatives for Saint-Gobain North America

On December 2, 2011, 60 key employers in America were invited to participate in a roundtable panel regarding the Better Buildings Challenge.  The Better Buildings Challenge is part of the Better Buildings Initiative that President Obama launched in February 2011.  Led by former President Bill Clinton, through the William J, Clinton Foundation and the Clinton Global Initiative, together with the President’s Council on Jobs and Competiveness, the Better Buildings Challenge supports job creation by catalyzing private sector investment in commercial building and industrial facility updates to make America’s buildings 20 percent more efficient over the next decade and save American businesses about $40 billion per year on their energy bills.

One of the key objectives of the round table was to share ideas about how to improve energy efficiency while helping to stimulate the economy and promote jobs creation.  There were a number of valid ideas presented to the Department of Energy (DOE) and Presidents Obama and Clinton during the meeting. But what was most impressive was that the focus was on both Clinton and Obama asking questions and listening to the business leaders.

The challenge is that companies must work with both the Environmental Protection Agency (EPA) on regulatory issues and with the DOE on the energy initiatives and often these two entities are on different sides of the conversation. The government needs to understand the impact on business to balance compliance to regulatory issues while improving energy especially for the manufacturing sector and this meeting was a good and productive first step.

While Saint-Gobain is certainly interested in promoting the objectives that come out of the Better Buildings Challenge, I feel that the critical issues are:

  • Creating stronger building codes to promote energy efficiency
  • Freeing up the capital for investments in energy improvements
  • More prominent branding of the Better Buildings Challenge to encourage wider support, commitment and participant recognition 

Companies need to be recognized in an ongoing, visible way for making the changes to conserve energy and natural resources.  This is not a short term, quick fix.   Energy efficiency needs to be a cultural change that takes place over time and becomes imbedded in the fiber of a business. With the commitments made by these initial employers, we are making a significant first step.

Solving an Acoustical Problem in a Retrofit Environment

 

Stan Gatland

Stan Gatland is Manager, Building Science Technology for CertainTeed Corporation

It can be a challenge to control the acoustics in older buildings when they are repurposed for multiple business uses.  One example is a call center situated in the middle of an office building, surrounded by cubicles of other workers and offices with many hard surfaces – glass, wallboard and wood doors. The perimeter of the call center has a low suspended ceiling with a decorative hard wood finish that amplifies and reflects the various sounds typical in an open plan office setting – loud telephone conversations and office equipment – carrying the disruptive noise throughout the floor.

The building owner had some ideas on how to improve the space but decided to work with an acoustical consultant to confirm the noisy conditions with measurements, as well as make recommendations on how to improve the space acoustically.

Acousticians commonly refer to highly sound reflective rooms as “live” or “reverberant.” Open plan office space should be designed for both good speech privacy and poor speech intelligibility.  Typically, you design for privacy at work stations and make speech unintelligible between adjacent areas by controlling background noise levels and reverberation time – the length of time it takes for a sound pressure level to decay or dissipate.

The results confirmed that background noise levels were high and intermittent and reverberation times exceeded the maximum recommendation of 0.60 seconds at most locations on the floor.

Another metric that was used to characterize the space was the speech transmission index (STI). STI is a measure of the ability to understand speech in a given space with the sound source coming from different directions or locations.

In open plan office settings, you want STI values to be low or poor meaning that people can’t understand each other from different locations.  Most locations had fair to excellent ratings creating a poor acoustical environment.

The recommendations provided by the consultant to solve the problem in this office space were:

  • Change the entire ceiling to high absorption suspended tile or use functional absorbers (hanging panels in the box like orientation)
  • Add some absorptive treatment to office doors or walls facing the open office
  • If not enough, use background masking noise.

It is expected that if the summary improvements were made it would improve comfort and maybe morale and productivity for the employees.

Time will tell. Do you have any examples of acoustical retrofit to share?

Adjusting the Thinking of Lenders

Lucas Hamilton

Lucas Hamilton

As exciting as it is to see Vancouver’s Olympic Village with energy efficient dwellings, long-term green initiatives that will become permanent sustainable features of the community, and the great publicity that provides, sustainable building projects continue to struggle to secure mortgages from lending institutions.

The struggle relates directly to justifying the costs to produce a more energy efficient building and the money saved over the life of the building. From a life-cycle perspective it makes perfect sense and is justified. But from an economic perspective it is more difficult to justify the added costs.  The reality is, on average, mortgages held by lending institutions are sold every seven years.  The banks are not concerned with life-cycle analysis; all they consider is upfront costs.  This becomes a negative when you start talking about creating sustainability. 

The building community needs to help rephrase that discussion. The truth is, in many parts of the country, homes are not built to the 2009 building codes but are built to 2006 or even 2003 codes. Take the average starter home. Building to the most current codes would generate a positive cash flow of $23 per month in energy savings into the homeowners’ hands. Enforcing the code can reduce the size of the mortgage by about 2 percent, which further insures loan repayment. Lenders should prefer that new homes be built to the most current codes, not only for life safety issues but because that saved money can help to repay the mortgage.

For the banks and lending institutions this is a great way to alleviate some of the concerns they have about borrower volatility, because building to the current codes increases borrowers’ income and insulates them from one of the most volatile expenses they have which is fuel costs.

For the average homeowner, energy bills have more than doubled over the last 15 years.  This is largely because of lifestyle. We live in bigger houses with plasma televisions, computers, surround sound systems and many more conveniences.

According to a recent study from Cornell University, if all existing homes and buildings were retrofitted to 2009 building codes–including upgrading systems–and improvements were made to transportation and industry, over the next 10 years we could eliminate 32 quads of energy, which is equivalent to the annual amount of oil imported into the United States. Think about that.

Lucas Hamilton is Manager, Building Science Applications at CertainTeed Corporation. 

The Durability Challenge of Energy Retrofits

Stan Gatland

Stan Gatland

As a member of the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE),  I participate in technical committees that deal with building performance from a heat, air, and moisture perspective. One committee explores best practices for building envelope design. The committee focuses on how to manage heat, air, and moisture flow through assemblies. 

At a recent forum, members discussed concern that in the rush to create air-tight building envelopes with high levels of energy efficiency, the long-term impact on durability due to these changes may be overlooked.  Energy efficient, air-tight buildings have a greater potential to accumulate moisture and have less energy to dry out.

The Department of Energy is poised to support the energy efficiency retrofit of existing homes by improving air tightness and adding thermal insulation.  This time, hopefully, the history of the 1980s and 1990s does will not repeat itself regarding the durability issues related to energy efficiency retrofits.  Moisture related damage typically takes seven to 10 years after the retrofit of an existing home or construction of a new energy efficient home if measures are not taken to address moisture.

DOE recognizes the need to control interior humidity levels, as well as address combustion safety.  If adjustments are not made to control humidity levels and circulate fresh air it could cause other problems like excess moisture which could result in mold.

Another concern is combustion safety. By making an assembly more air-tight, you have less air available for combustion events. For example, hot water heaters and furnaces that once relied on a building’s air leakage to supply enough air to the combustion process may backdraft if enough air is not available in a well sealed home.   Direct ventilation may now be required to compensate for the retrofit.   

DOE is recommending that energy retrofit contractors address moisture management issues and combustion safety by following guidelines outlined in ASHRAE Standard 62.2 as a way to insure proper indoor air quality for residential buildings and increase the durability of assemblies.

Americans have traditionally had access to inexpensive energy but that is changing. We do need to address retrofitting older buildings, but it is crucial to not create other problems while doing so.

Stan Gatland is Manager, Building Science Technologies for CertainTeed Corporation

Shoving Green Circles in Brown Squares

Lucas Hamilton

Lucas Hamilton

At an event I recently attended for manufacturers and design professionals, I had the pleasure of hearing a keynote speech by Marvin J. Malecha, FAIA, outgoing President of the American Institute of Architects and Dean of the College of Design at North Carolina State University.

One of the points that really struck me in his presentation was the idea that we are trying to shove green pegs in brown squares.  We are developing band-aids for problems in existing structures based on our current technologies.  How can we take product “A” and massage it a little bit to solve problem “B?” The fact is, you should start from scratch to get rid of problem “B.”  Don’t solve problem B, get rid of problem B.

In other words, what we are doing is slapping bigger fins on the Cadillac. What we need to do is get away from that Cadillac model. Maybe it’s not about improving the performance of our existing designs; it’s about completely rethinking our designs.  Do we really need to have green high-rises? Maybe we don’t need high-rises. Don’t get me wrong, Malecha isn’t suggesting we get rid of high-rises.  He is suggesting that we are stuck in a rut of thinking and trying to solve our existing problems when maybe the long-term solution is to start from scratch on basic issues such as:

  • How we build buildings
  • What we think of our buildings
  • What we think we need in our buildings

Consider, for example, the internal combustion engine.  No one in their right mind would set out today to design the internal combustion engine we have in our cars.  It is ridiculously complicated. We have gotten to this complexity by continuing to solve or improve a bad design and pushing it down the road as opposed to getting rid of the internal combustion engine and going back to the electric motor. Similarly, this is how we are approaching sustainability.

According to Malecha, the present Green strategy is to fit new products and systems into present design. Design must change completely to truly move forward. Even in the most corporate environments, the free agents will win and rule because they can re-invent.  Keep learning, keep being creative and keep moving.

Lucas Hamilton is Manager, Building Science Applications at CertainTeed Corporation. 

Retrofitting for a Green Future

Gerding Edlen renovated and retrofitted the Portland Armory for mixed use.

Gerding Edlen renovated and retrofitted the Portland Armory for mixed use.

It is clear that in order to reduce our energy consumption in existing buildings, we need to retrofit these structures.  Dennis Wilde, a principal at Gerding Edlen Development (GE) addressed this issue during the 2009 Greenbuild Convention and Expo in Phoenix, Arizona.  According to their corporate philosophy, Gerding Edlen exists to do one simple thing: to create vibrant, sustainable and inspiring places where people can work, learn and live. Creating places that offer fresh air, foster creativity and incorporate art and culture help us achieve this goal. Their Principles of Place document expands on this philosophy.

GE was responsible for the first new construction LEED Gold condominium in the US, the first LEED Gold condominium in California, the first LEED Platinum condominium in the US, and the first building on the Nat’l Historic Register to become LEED Platinum. Because LEED Platinum has become easier to achieve, GE is focused on the Living Building Challenge which is the next benchmark for the green/sustainable movement. A growing part of GE’s development and design work is in retrofitting existing structures for energy efficiency under the name Sustainable Solutions.

When evaluating an existing building, GE focuses on energy, waste and human comfort as well as optimizing the operations and maintenance of the building.  The challenge they face  is that few owners/operators put a sufficient amount of resources into training the people who need to maintain the buildings.   The day-to-day maintenance staffs are not trained in how to properly maintain a green building, and maintenance is critical in order to keep these buildings operating at peak performance. You can’t just create a green building and walk away; you have to hold people’s feet to the fire regarding the operation of the building. These are part of the green jobs of the future.

The absence of financing is another challenge to retrofit projects. Traditional financing requires either a high percentage rate or a quicker return on investment. The current financing system isn’t really suitable for the green/sustainable movement because the return on investment takes longer, with a long-range benefit in energy consumption, waste and use of resources. The financing system needs to be reworked to better understand the benefits of green/sustainable building.

Dennis offered some examples of successful GE projects:

  •  The Portland Community College in Oregon was a retrofit project on systems, assemblies and usage and included interior and exterior changes.  It is the first net-zero community college. The project cost to redo the campus of 122 acres with more than three-quarters of a million square feet of space was $15.4 million, but they are saving $1.1 million in energy costs per year. This project will pay for itself in 15 years. They are saving almost $71, 000 in water costs alone.
  •  The Portland, Oregon public school system installed photovoltaic roofing on nine schools with over 500,000 square feet of roof and they are saving $58,000 per year in energy costs. They will recoup the costs of this project in 34 years.

We need to retrofit existing buildings if we are going to lower our energy consumption. The goal of net-zero energy is achievable and the rewards are too great to ignore. To learn more about net-zero building, check out the U.S. Department of Energy Building Technologies Program.

Lucas Hamilton

Lucas Hamilton

Lucas Hamilton is Manager, Building Science Applications at CertainTeed Corporation. 

Taking a Bite Out of the Whale

Lucas Hamilton

Lucas Hamilton

The Prince of Wales’ Corporate Leaders’ Group on Climate Change recently presented The Copenhagen Communiqué to UN Secretary General Ban Ki-Moon.  This document, signed by more than 500 businesses across the globe, states that “economic development will not be sustained in the longer term unless the climate is stabilized.”  It also calls for an agreement to be drafted and accepted that “establishes a global emission cap and long-term reduction pathway for all greenhouse gas emissions and sources, for the period 2013 to 2050 (with interim targets).”

CertainTeed’s parent company, Saint-Gobain is among the signers of the document and all of the businesses of Saint-Gobain have corporate mandates to reduce our carbon footprint in our buildings and manufacturing facilities.

If the UN adopts this proposal, it presents an interesting challenge for the United States and addresses what I discussed in a previous blog about the need for energy auditors.  In the US, our energy standards have changed dramatically over the last 20 years, but 90 percent of our homes and about 4 million commercial buildings were built before 1990.  While we have seen many programs able to achieve energy efficiency and sustainability in new design and construction, those advances are like taking a bite out of a whale – because they represent less than 2% of our reality.  We have to address the 98% of buildings that remain because that’s where our energy is being consumed. With a global goal of reducing carbon emissions by 50%, we would never reach that goal just by greening our new construction. We have to go back and green our existing construction if we are ever going to meet even 15, 20 or 30% goals. There is a growing need for programs that can retroactively improve building performance.

At the 2009 GreenBuild Convention in November in Phoenix, Arizona, CertainTeed will be hosting a luncheon with guest speakers from Gerding Edlen Development on this very issue.  Gerding Edlen has a Sustainable Solutions program which is successfully retrofitting existing buildings and significantly reducing the carbon emissions. I can’t wait to learn about how they are doing this.  This is an incredibly important time to talk about this issue because although they are not easy to do, we have achieved passive houses and zero energy buildings. Its one thing to achieve zero energy when you start with a clean piece of paper and design in the building efficiency, but it’s another thing when you inherit someone else’s mess. While it’s a more difficult target, it’s the most important target. There are limited slots available for this luncheon.  If you are planning to attend GreenBuild and would like to attend, email Kristen Harter, Kristen.M.Harter@saint-gobain.com.

If the UN adopts the Copenhagen Communiqué, it will certainly accelerate our efforts to retrofit the existing building inventory globally. Each existing building we improve will have an impact on controlling greenhouse gas emissions and climate change.

While the task may seem insurmountable, we do know how to eat a whale right? One bite at a time.

Lucas Hamilton is Manager, Building Science Applications for CertainTeed Corporation.