DaBx Announces Renewable Energy Retrofit Portfolio Standard

A proposed new standard for renewable energy retrofits for existing buildings offers a simple methodology for owners to evaluate projects. The proposed standard can simplify incentives, and eliminate counterproductive programs.

DaBx Demand Side Solutions, Inc. published a proposal called the DaBx Renewable Energy Retrofit Portfolio Standard for Multi-family Buildings. The proposal contains three simple rules for building owners to plan the energy future of their properties and to make sense of the maze of often contradictory incentives and programs.

At the same time, the proposed standard also offers the prospect that lawmakers could eliminate the massive confusion that now exists with regard to renewable energy and energy efficiency. Rogier Fentener van Vlissingen, President of DaBx points out that the focus of many programs on energy efficiency in fact causes buildings to underachieve, because of many conflicting objectives with such programs as NYC Clean Heat and the NYSERDA MPP, or similar programs in other areas. These programs are usually driven by the priorities of the utility industry and/or to promote certain technologies. More in general, it is always a mistake to prioritize energy efficiency over renewable energy and energy independence. Only renewable energy will support building resiliency, which is now a high priority after Hurricane Sandy. Renewable energy will also enhance property values.

As van Vlissingen explains, recent recommendations, such as the "90by50" report from the Urban Green Council are pitched at too high a level, and should really be decomposed into the fact that some buildings can outperform the market, so in reality the range of solutions will be very wide. The most important lesson however that is reinforced by the proposed standard, is that every property needs to operate with a 30 year capital budget for energy infrastructure, which takes into account engineering inter-dependencies, and is done with a Discounted Cash Flow Model, which focuses the decision on enhancing property values in the long-term.

Specifically, the proposed standard seeks to prevent that property owners are misled by various incentive programs which benefit manufacturers of certain technologies, or the utilities and oil companies. If those programs are followed instead of a proper financial plan for a property, the risk is that owners are investing their good money to the benefit of the shareholders of their energy providers, instead of to improve the value of their property. Likewise the wide availability of advantageous retrofit financing based on energy efficiency, is another financial pitfall which tempts building owners to make decisions that often undermine long term building value.

The DaBx Renewable Energy Retrofit Portfolio Standard for Multi-family Buildings is made available under a Creative Commons license, to that it can be adopted for any non-commercial applications on the basis of proper attribution. This was done with the specific purpose in mind that it should be available to be adopted for any regulatory purposes, where it can benefit the market as a whole.

Implied in the program is the fact that renewable energy solutions will move energy from liability to asset, whereas energy efficiency usually achieves no more than a 20-30% savings on energy bills, which will otherwise continue as before. DaBx has provided materials to demonstrate that renewable energy projects will tend to produce compound returns, while energy efficiency projects by definition suffer from diminishing returns, and are therefore a bad financial strategy.

As published on the website (www.vliscony.com - see link above), the document is enhanced with links to explain all of the questions that will come up, such as the reasons why energy efficiency is a bad investment proposition and produces diminishing returns. By following the guidelines of the proposed standard, property owners would seek first to maximize the property value, and only in the second order would they figure out what incentive programs they might qualify for. The underlying principle is that good financing or subsidies can never make a bad project good, but they can only make a good project better. Unfortunately too many decisions are made on the basis of the incentives, causing property owners to act against their own best interest, and sacrificing long-term appreciation of their properties.

It is also shown that the growing presence of net-zero buildings will become a new reference point in the market, so owners should focus on achieving the best for their properties.

Contact Info:
Name: Rogier Fentener van Vlissingen
Email: Send Email
Organization: DaBx Demand Side Solutions, Inc
Address: 2141 Starling Avenue
Phone: 7188236428
Website: http://www.dabxdemandsidesolutions.com

Release ID: 16768