In the second of a series of Special Reports, leaders of three commercial manufacturing companies met with John Conrad, publisher, and Mike Murphy, editor-in-chief of The NEWS. Following are excerpts from conversations with John Conover, president of Trane in the Americas; Kelly Romano, president, Building Systems and Services (BSS) Carrier Corp.; and Eric Roberts, executive vice-president, McQuay International.
GREEN BUILDINGThe NEWS: The U.S. Green Building Council recently reported that for new construction, there are 3,738 registered projects and 504 certified LEED projects. The LEED program seems to be gaining momentum; where do you see that in importance for commercial contractors?
Romano: Green buildings are the future of our industry and of our planet. With hundreds of billions of dollars in new commercial construction annually, the environmental burden imposed by the construction and operation of buildings will continue to rise. Sustainable design considerations that take into account the environmental impact over the life of buildings are critical.
LEED is gaining momentum. While the LEED program is targeted for the top 25 percent of the building market - interest is developing at every level and will continue. Many of the high-profile jobs will consider the LEED process even if they don’t use it. Most agencies of the federal government require that the LEED process be used in all new buildings. In Washington and Boston, LEED will even be required of all buildings, both public and private.
Commercial contractors need to understand LEED and how it fits into the process. Contractors are involved in the decision process on 23 credits: the recordkeeping for 14 credits and the submittal process on 30 credits. Simply put, LEED certification cannot happen without the HVAC contractor.
Distributors should also understand the process and how the products they sell can be used to meet LEED criteria. The LEED program does not certify products, but looks at the building as a whole. It is the interaction between components that is the key to good, sustainable design. This type of process requires the distributor to think in terms of systems. Distributors and contractors need to ask themselves, “How do the components I sell interact with the rest of the building systems?”
The equipment delivery process and schedule can also become an important consideration. Storage of materials at a jobsite may change in order to keep materials free of contamination. Distributors may need to work closely with contractors to provide materials only when needed.
Carrier was one of the founding members of the U.S. Green Building Council (USGBC), and we take our commitment to sustainability seriously. Energy efficiency is a major focus, which is why we look at how equipment operates in part load conditions.
I look forward to the day when green building is the standard, and evaluating every design decision in order to understand its potential impact on the environment, occupant health and comfort, and the bottom line is the norm.
Conover: We think the environmental movement is going to continue to grow and generate more momentum. Energy is at the crux of it. Trane has been an industry leader in energy since the 1970s, and now we are strong supporters of the green building movement. In fact, we have 92 LEED-certified professionals on our staff, and I am a member of the U.S. Green Building Council CEO roundtable.
The green movement will place the demand for higher-quality companies and higher-quality people at a much greater level of importance. Customers will demand this. We have to make sure that we, as an industry, make good on the promises we make.
Roberts: LEED and other sustainable programs are certainly increasing in visibility, awareness, and popularity across the country. McQuay is delighted to see and support this trend both from an industry and a global perspective. For commercial contractors, the importance of this trend is a change in focus for the design and sales process, away from first-cost toward building operation and life-cycle costs.
Buildings designed for energy efficiency and/or sustainability do not necessarily cost more, but will often incorporate nontraditional system designs and equipment technologies. The challenge for contractors will be to learn these new approaches, sell them, and put them into practice. McQuay is committed to developing products that are energy efficient, use environmentally friendly refrigerants, and are flexible so that they can serve many different types of sustainable applications. We continue to develop educational and design tools to support the sustainable design projects of our customers.
The NEWS: The energy efficiency claims of LEED-certified buildings are being questioned. Some of the new materials and processes being used are presenting challenges for mechanical systems contractors as they attempt to properly size equipment and calculate loads. What are your long-term expectations for the success of LEED?
Romano: There have been some questions associated with new technology introduced as part of LEED projects. This is not surprising as the intent of LEED is to push the envelope in terms of building design. Elements such as underfloor air distribution, double-skin facades, and using passive solar through higher-mass buildings and increased glass, are challenges for many of the current load programs. These challenges are being met as we learn more about the interaction of these designs with the equipment.
There is a lot of work yet to be done to ensure that buildings are more environmentally responsible, and I believe the LEED program is accomplishing what it intended - transforming the market and the way we all think about building design.
Roberts:I absolutely think the movement toward more energy-efficient and sustainable buildings will continue to grow and become a significant part, if not eventually the dominant part, of our market or standard building practice. Along the way, a process to measure and certify designs will succeed.
LEED is clearly the current leader. Since we believe that the basic design objectives and principles of this movement are sound and, if applied well, are economically justified, we also believe there are true savings available.
That said, there will also be a learning curve, with a change from the common approach of oversizing the HVAC system, to system optimization. Therefore, the integration of building design, building load modeling, and actual building operation needs to evolve and improve. I believe the process and tools will evolve with experience. McQuay has tools to assist in the design process, and is continually improving them.
Conover: Growing pains are associated with most new things and green buildings are no exception. However, I suspect some of the challenges occurring during the modeling phase result from a communication breakdown between the architect’s and engineer’s visions, and the bidder’s interpretation.
The project design, execution, and commissioning need to be communicated well throughout the entire construction and commissioning period. It is also important to communicate well during the handoff to the operating staff, to ensure the project continues to be operated as the designer originally intended.
If the system is not installed or operated as the designer intended, problems will likely occur during commissioning or measurement and verification (M&V) period. Traditionally designed buildings often don’t experience these kinds of problems simply because commissioning and/or M&V are value engineered out of the specification. In these cases, however, problems can occur if owners are unsatisfied with the building.
Commissioning after building construction is the responsibility of a commissioning agent to ensure the building will be operated as intended. Continuous commissioning can help reassure that the original design intents are carried out throughout the life of the building.
LEED is putting a great practice in place, which is reinforced by the USGBC, which provides third-party verification. The commissioning and M&V help the building industry focus on the operation side of the equation. LEED will grow as new versions are introduced. Given time and continued support, these great practices will become more common, and buildings will be greener year after year.
The NEWS: Currently, building owners receive a plaque for the wall of their LEED-certified building, and bragging rights to use in promotional materials. Are there other incentives that might encourage owners to go green?
Romano: There are several incentives I can think of; perhaps the one best understood is the bottom-line incentive. The USGBC announced that it will start requiring a savings of 14 percent or more in energy costs. This translates into direct bottom-line savings for building owners and tenants - that is certainly better than a plaque.
In addition, green building practices can result in a number of other direct and indirect costs, including programs that offer insurance premium reductions for buildings that meet LEED standards. Recent studies have shown that productivity is up in these buildings. In any building, costs associated with the people in the building dwarf the cost of energy. This is true of offices, retail buildings, and schools. Retailers have shown increased sales from stores with green features. Healthier, more-productive, energy-efficient buildings can often be built with little or no additional cost.
For the developer, several locations are offering reduced permitting time when the building is being LEED certified. This can allow opening months ahead of schedule. Several states, such as New York and Maryland, also make funds available for meeting green building standards - another incentive for owners.
Conover: A LEED plaque and certification provide a sense of pride and achievement to owners and employees - and clearly demonstrates environmental stewardship. Getting third-party verification from the USGBC demonstrates that an even higher bar was met to ensure quality and execution.
Bragging rights are a valuable marketing tool. Going green also offers direct benefits in regard to reducing energy usage and improving indoor air quality, which reduces health care costs and increases productivity. Many reports indicate that green buildings deliver better test results in schools, provide healthier operating and patient rooms in hospitals, and offer better indoor environmental quality for employees. All of these benefits help increase productivity which, in turn, helps improve marketplace competitiveness.
Better overall results through the life of the building can improve the bottom line. Many cities and states, such as Santa Monica (Calif.), Cincinnati, and Oregon, are in the forefront of promoting green buildings in neighborhood developments. They do this by providing faster building permits, grants, and tax incentives to attract more companies and talent.
In some areas, too, LEED compliance is becoming the required standard, not just an option. For example, the state of Washington will soon require LEED certification for publicly funded buildings.
The NEWS:How might contractors best profit from involvement in the green movement? To date, many claim they understand the necessity to help the environment, but can’t find the money.
Romano: Contractors are a critical part of the commercial construction market and the move to sustainability is an opportunity for contractors. To get involved, I would recommend that contractors become knowledgeable about what is required to build green. Contractors should:
• Take advantage of training opportunities on LEED and on sustainable design. Getting certified through programs like Green Advantage is a good first step. This training can actually help a commercial project achieve an innovation credit.
• Get involved early. The integrated design approach requires everyone’s involvement through the design and construction process.
• Understand the documentation required by the contractor when working on a LEED project. Keeping the right records and knowing the right questions to ask is the key to a LEED job running well and profitably. The integrated design approach is a process that appeals to the design-build contractor.
• Look for the opportunities. The LEED - EB (Existing Building) program can be a great opportunity for contractors to work with existing service customers and use this program as an opportunity to help them become greener.
Roberts: Green designs often have higher first costs and more unique technologies. Both offer the contractor opportunities for higher profits.
Green designs may also require closer monitoring, maintenance, and adjustment in actual use to maintain performance - all of which again offer the contractor business opportunities. A challenge to contractors is understanding the intent of the design and the equipments’ capabilities to select, deliver, and install the appropriate system.
McQuay, through its sales force, offers assistance on both the system design and equipment operation. ASHRAE and other industry players also offer excellent training programs locally and nationally.
Conover: The green movement offers a great way for contractors to differentiate themselves in the industry, and get a head start on regulating bodies and customers who are increasingly demanding green.
Because this is a relatively new area with a learning curve, it might seem a little frustrating or daunting for some contractors to fulfill a green project. But, contractors can rest assured that as they gain experience, they will become more efficient.
In the end, contractors embarking on green projects should see greater profits through bills of material, labor, and improved efficiency, resulting in better margins. For instance, increased air cleaning requirements add to the traditional air cleaner bill of material, and better sealing or CO2 monitors in high-density spaces add to labor content.
As we know, the USGBC is committed to addressing the climate change challenge, as evidenced by its ongoing pledge to help the industry go greener.
The USGBC has stated its goal to see 100,000 LEED-certified commercial buildings and 1 million certified homes be completed by 2010, and to see 1 million LEED-certified commercial buildings and 10 million certified homes by 2020.
Going green is becoming more than a trend; it’s becoming an important way of life for our industry and our world. Contractors who get involved sooner rather than later can only help their own businesses, and gain the extra satisfaction of helping the environment.