The long-term global market for energy efficiency commercial building retrofits is projected to grow, more than seven percent annually through 2023, according to a recent report from Navigant Research. The cumulative investment in commercial building energy efficiency retrofits globally will reach $959 billion from 2014 through 2023.
One reason for the vast investment is that existing building stock far exceeds the amount of building space being added annually so retrofits have been an important stepping stone toward greening commercial buildings worldwide. Also helping drive retrofits are government regulations, technology advancements, and cost reductions. Another factor contributing to this growth is that the period for businesses to make back their investments has been slowly decreasing. This is extremely important as the payback period remains a critical factor for most building owners and managers.
Even though government mandates play an important part in driving the decision to retrofit building, a growing number of projects are being undertaken on a voluntary basis with the spread of corporate sustainability initiatives, according to the principal research analyst with Navigant Research.
The short-term outlook for retrofitting looks positive, as well. The United States Green Building Council (USGBC) estimates that by next year, the green share of the largest nonresidential retrofit projects will triple. Among reasons for their estimate includes anticipated decreases in operating costs, expected increases in asset valuations and, again, a decrease in the number of years for payback.
According to a Dodge Data Analytics survey, green building owners are experiencing an average of seven percent increase in asset value and eight percent return on investments. Additionally, the USGBC claims that, compared to the average commercial building, LEED Gold-certified buildings generally consume 25 percent less energy; have 19 percent lower maintenance costs; 27 percent higher occupant satisfactions; and 34 percent lower greenhouse gas emissions.
One business sector that typically lags behind other commercial building owners when it comes to creating green environments may now be seeing the light. More and more retailers are creating green, environmentally designed buildings and reaping benefits ranging from pleased customers to financial savings. Since 2007 nationwide, more than 8,000 retailers have met LEED standards and have LEED-certified buildings.
Nationally, many retailers and restaurant owners have experienced substantial benefits, enough that 38 percent of Dodge Data Analytics survey respondents say that their construction projects will incorporate some green building standards. Among the benefits, respondents cited healthy and content employees. Sixty-two percent of retail building owners said that green standards have had a positive effect on employee’s health and happiness.