Obama's Better Building Initiative Aims to Improve Energy Efficiency and Reduce Costs

In the Better Building Initiative, President Obama proposes new measures to improve energy efficiency in commercial buildings around the United States. The initiative aims to make commercial buildings 20 percent more energy efficient over the next decade by encouraging private sector investment with incentives to upgrade offices, stores, schools, municipal buildings, universities, hospitals, and other commercial buildings.

The goal is to increase cost effective upgrades that will reduce energy bills and save business owners money. The hope is that this cost savings will be used to hire more workers, invent new products, and create shareholder value.

The initiative calls for a reform of existing tax and other incentives for commercial building retrofits, and proposes a new competitive grant program. President Obama is also asking corporate leaders to commit to making progress towards these energy goals. The President’s budget proposal will include efforts to make American businesses more energy efficient through several new initiatives:

  • President Obama is asking Congress to redesign the current tax deduction for commercial building upgrades to make the current deduction a tax credit that is more generous and will encourage building owners and real estate investment trusts to retrofit their properties.
  • President Obama is also making an effort to address the financing access problems for building retrofits. The Small Business Administration is working to encourage lenders to take advantage of increased loan size limits to promote new energy efficiency retrofit loans for small businesses. Further, the President’s budget will also propose a new Department of Energy program that will guarantee loans for energy efficiency upgrades at hospitals, schools and other commercial buildings.
  • The President’s budget will also propose new competitive grants to states and local governments that streamline commercial energy efficiency standards to encourage upgrades.
  • President Obama is challenging CEOs and University Presidents to have their organizations set an example in saving energy. Committing to a series of actions to make their facilities more efficient will make the organizations eligible for many benefits including public recognition, technical assistance, and best practices sharing with their peers.
  • The Obama Administration is also working to implement reforms that will improve transparency around energy efficiency performance and provide more training in energy auditing and building operations.

The end goal of the Better Building Initiative is to increase energy efficiency in commercial buildings by 20 percent and create a potential cost savings of $40 billion per year.

Save $Green By Training Building Managers

CDC sustainable building

Does the Responsible Developer spend money in recession to realize the many benefits of green buildings?  One very familiar developer says Yes!

President Obama may now be a Responsible Developer because earlier this month he agreed that in order to obtain the cost savings of green buildings, you had to spend money to properly maintain them.  This news was well received by the IAPMO (the code and trade association that develops plumbing, mechanical and solar codes).  Accordingly, Obama signed into law new legislation that provides training to federal building managers to ensure that taxpayers realize the benefits of the intended energy cost savings in green buildings.  Interestingly, the bill did not provide extra funding.

The 2010 Federal Buildings Personnel Training Act will give the General Services Administration a year and half to identify the core skills needed to manage these ever increasingly sophisticated buildings and to make sure the managers get standardized and certified training.

One of the new bill's sponsors, Representative Russ Carnahan, co-chairman of the congressional high-performance building caucus, stated that "Sustainability and energy conservation isn't just about the air we breathe or the water we drink.  It's about saving money for families, businesses and taxpayers."

Of course this pay-to-save sentiment is not entirely new.  Three years ago, at an annual meeting of public owners in Seattle, an attendee commented that they had been given more than adequate new construction budgets for green, energy efficient buildings, but had been given inadequate budgets for training and maintenance.  He felt that the lack of funding for maintenance would lead to reduced energy savings, costly repairs or claims.   

The Responsible Developer, even in tough economic times, realizes that the only way to achieve the intended cost savings of green and more efficient buildings is to properly manage and maintain them.  She and he also know that the same maintenance is also good risk management because it may prevent indoor air quality and property damage claims.  Other bloggers like Greg Zimmerman (Facilitiesnet) have wisely noted that responsibilities must be clearly spelled out in Green Building Contracts to avoid claims.

So Developers and Owners, you can be Presidentially Green and save money in the long run by providing better training of your managers and giving them the money to maintain your buildings.


Is Better Building in Recession a win-win?

During recession should the Responsible Developer spend $38 million to improve existing buildings energy efficiency? The City of Seattle and its partners say yes!

You may recall that last Spring Seattle was the recipient of a $20 million award from the U.S. Department of Energy’s BetterBuildings Program. Since then the City has leveraged other funds to create a pool of $38 million.  The Mayor says the program will create 2,000 green jobs, reduce energy use by between 15 percent and 45 percent in retrofitted buildings, and reduce greenhouse gas emissions by about 70,000 metric tons.

It will also mean work for contractors and suppliers and local tax revenues. These retrofit projects will be located between Central Capitol Hill and the city limits in Southeast Seattle.  Joshua Curtis, Community Power Works manager, said the goal is to create new energy efficiency programs that will help the private sector test what works and what doesn't.  "We're just really focused on using this money now to not only create jobs in energy efficiency but really catalyzing good models going forward,” he said. “I think that what we'll likely see is a lot of these programs, some of them ending up in the city, some of them continuing in the private sector, some of them continuing perhaps in a nonprofit fashion.”

Portions of the program were originally recommended by the Seattle Green Building Task Force which looked at ways to make Seattle buildings 20 percent more efficient by 2020. There are different programs for each building sector.  The first phase was launched last week. It focuses on hospitals and large commercial and municipal buildings, and will use about $4.2 million of the funds. The second phase launches in early March and will  allocate the rest of the money and expand the program to houses, small commercial and multifamily.

According to the Times, Ted Klainer, capital projects manager for Harborview Medical Center, said the hospital is already pursuing energy improvements but this program allows it to expand that effort dramatically. Work involves HVAC, Seattle Steam-fed heating systems, and equipment.  The cost will be in the millions, he said.  Harborview is a state institution so cash is tight.  “Getting those funds just allow you to get more traction quickly to get these things done,” Klainer said. “At the end of the day, when we get systems upgraded, they will even save the taxpayers' dollars, especially over the long term. It's a win-win.”

Yes, responsible development, even in recession, can be a win-win.