Building efficiency retrofit programs have been successfully undertaken by many local governments. Unlike most capital projects, energy efficiency upgrades for buildings provide an economic return through energy savings. They can therefore be viewed as investments opportunities, rather than simply expenditures.
A civic building energy retrofit can:
- Reduce energy consumption and associated utility costs of the existing building portfolio
- Be cost-neutral
- Reduce emissions resulting from existing buildings, improving the carbon neutral status of local government operations
- Improve working conditions and productivity for employees
Process to guide retrofits
Typical steps in civic building energy retrofits include:
- Establish policy and commitment, such as a Civic Green Building Policy
- Conduct an energy audit and opportunity assessment – usually done by a specialized energy consultant or engineering firm
- Prioritize actions and study feasibility of opportunities further where necessary
- Make decisions on investments and financing
- Design
- Tender
- Construction and commissioning
- Monitor results and report
The above steps are not necessarily done in sequence. Though there are advantages to comprehensive retrofits, individual buildings can also be selectively retrofitted – this can be a “quick start”, especially for small communities. For example, an older municipal hall can be upgraded with ENERGY STAR windows, better insulation and efficient heating and ventilation systems, improving efficiency and the working environment.
Retrofits will generally involve measures like efficient lighting, control systems, high efficiency mechanical (HVAC) systems, high performance windows, and water-efficient fixtures and appliances. These measures should be complemented with low-cost measures like improving building operating procedures and educating building users.
The right set of measures will be different for every building, as they will vary by type, age and condition of building, climate, and other factors. These are determined during the process steps 2-5 outlined above and driven by investment criteria.
Investment Criteria
Energy efficiency projects can be viewed as investments, as they provide a monetary return through energy savings. Financial analyses should therefore be appropriate for this type of investment.
Energy projects are often assessed solely in terms of simple payback, with short paybacks (e.g., 7 years) required. While this method is straightforward to calculate, it does not reflect the true long-term value of the project. Utilizing a more sophisticated method such as Net Present Value (NPV) or Internal Rate of Return, over a full life cycle such as 15 or 20 years, more accurately reflects the benefit of the investment. A positive NPV using life-cycle costing may therefore be considered as a primary investment criterion.
Implementation and Financing
A retrofit project may be managed and implemented internally, or via an Energy Services Company (ESCO) – this is called energy performance contracting. Energy performance contracts are turnkey projects, where the ESCO guarantees the upfront cost as well as future energy savings, minimizing risk to the local government. Costs of the initial energy studies, as well as a markup on services such as design and project management, are rolled into the overall project cost.
In some cases, an ESCO can also provide financing. However, local governments can usually arrange financing through the Municipal Financing Authority at much more favourable rates. In any case, the contracts are created such that the energy savings will cover all financing costs, so that there is no net cost to the local government.
Energy Efficiency and Buildings – A Resource for BC’s Local Governments, produced by Fraser Basin Council in association with Community Energy Association, provides further guidance on civic building retrofits as well as other building efficiency measures.
Examples
Examples of ways local governments have retrofitted civic buildings include:
- Incorporating biomass energy boilers as primary heating sources
- Re-insulating roofs
- Installing energy efficient windows and doors
- Renewing weather stripping
- Installing solar arrays to heat pools
- Replacement of dated HVAC systems
