Energy Efficiency
The Issue · Position · Status · Talking Points· Resources
The Issue
Becoming more energy-efficient is an important consideration in today's commercial real estate industry. At a time of increasing energy costs, both developers and their tenants understand that it makes economic sense to develop properties that lower their costs, thereby keeping them competitive in the marketplace. Most of the greenhouse gases that are released into the atmosphere come from coal-fired power plants during the production of electricity. Because buildings use a large percent of the nation's electricity, they are attributed responsibility for a large percentage of greenhouse gas emissions. The goal of reducing the greenhouse gas emissions attributable to commercial buildings therefore, has become a key component of the ongoing debate over energy. Over the past several years, Congress has introduced energy bills that dramatically increase the energy efficiency of building codes.
Position
In the real estate industry, local economic conditions determine the levels of efficiencies and costs that can be absorbed in a given market. Not all markets are created equal, and nationwide energy mandates for all building types will create a disincentive to develop new properties in areas where the markets cannot absorb the increased costs. Time is needed to bring all markets to a level of sophistication where more sustainable technologies and methods become the norm and are available within a reasonable cost.
Congress should offer more incentive based solutions to help the real estate community reach higher levels of energy efficiency. Specifically, we support increasing the Energy Efficient Commercial Building Tax Deduction from $1.80 a square foot to $3.00, rebates for energy efficient equipment that are including in the Building Star proposal and advancing depreciation schedules for direct energy efficient improvements.
Status
The Senate Energy and Natural Resources Committee passed an energy bill, S.1000, dealing with building efficiency by a vote of 18 to 3. The bill was introduced by Senators Jeanne Shaheen (D-NH) and Rob Portman (R-OH).
Talking Points
- Most developers cannot implement energy saving measures with more than a 5-year payback.
- Currently, NAIOP does not believe it is feasible to attain a 50 percent increase in building codes. While there have been some recent encouraging energy modeling studies that show a hypothetical building can reach this target, they typically employ strategies outside the purview of codes by including plug loads and building operations. Additionally, new "exotic technologies" are used that may not be applicable for all building types and oftentimes there is a lack of "contractor knowledge" to use these technologies, especially for all buildings throughout the country.
- There are limits within the confines of a building code as to what can be done to increase energy efficiency. Energy codes generally only regulate the building's envelope (roof, wall and floor insulation) mechanical and lighting systems. Much of a building's energy use falls outside the purview of codes and will not be affected by an increase in code efficiency.
- Some accounts have attributed to commercial buildings responsibility for more than 40 percent of greenhouse gases produced. Yet in order to reach that number, not just commercial buildings but all residential buildings, methane released from landfills from decomposing construction debris, and emissions released at wastewater treatment plants must be included in the calculation.
Resources
Contact:
John Bryant
Senior Director of Federal Affairs
(703) 904-7100 ext. 162
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