Furthermore, investments in energy efficiency and clean energy are strengthening our economic competitors like Europe and China, making them less vulnerable to rising energy costs. The United States needs to make faster strides in this global economic race.
However, passage of regulatory support for building efficiency, in the form of comprehensive energy efficiency legislation, is unlikely in 2011. We might see certain provisions attached to a job or tax bill and the adoption of other noncontroversial measures, including negotiated consensus agreements and initiatives similar to President Obama’s Better Buildings Initiative, which aims to bring a 20 percent improvement in building efficiency by 2020.
Of the energy used in the United States, 40 percent is consumed by buildings, primarily for heating and cooling, which speaks to the impact building energy consumption has upon our total national energy use.
New buildings present a very real opportunity to achieve significant energy savings over the long term, especially when developers and building owners use a systems approach to energy efficiency. A systems approach looks at more than the individual pieces of equipment that operate in a building. In fact, it considers how building components and systems can be integrated to work together to achieve maximum energy results and, ultimately, net-zero energy building design.
Technologies exist to help meet these goals. But more is needed, including stronger building codes that support a systems approach to energy efficiency. Modernizing building codes to raise system efficiency requires the creation of a level playing field for state codes, eliminating patchwork standards and encouraging manufacturers to effectively and efficiently meet consistent and higher standards. And as these codes are adopted, stronger code enforcement becomes increasingly more important.
Today, existing buildings - where old, inefficient equipment, some containing ozone-depleting refrigerants, can be replaced with today’s modern, more efficient technologies - represent the greatest opportunity to conserve energy in the near term. More than 25,000 old, inefficient chillers with ozone-depleting CFC refrigerants still operate in the United States with half the efficiency of modern chillers. Additionally, many residential air-conditioning systems with a SEER of 7, 8, or 9 continue to operate, even though new systems averaging 14 SEER and premium systems between 16 and 20 SEER, are commercially available.
We encourage policy makers to create financial incentives that help building owners overcome the challenging physical and economic obstacles to system upgrades. Financing mechanisms like (PACE) bonds would provide additional support to those looking to make efficiency improvements to their buildings.
The removal of disincentives, including the 39-year tax depreciation on mechanical equipment with estimated life spans of 15 to 20 years, would also encourage investment in energy efficiency. More realistic depreciation rates would enable investors to recover a portion of their invested capital sooner.
The movement toward more realistic depreciation rates would primarily encourage efficiency improvements in existing buildings, where owners are evaluating substantial investments in replacement equipment versus repairing old, inefficient equipment. But removing disincentives also has the potential to motivate developers to invest in more energy-efficient equipment in new buildings as well.
Meanwhile, the demand for energy will continue to grow - as much as 45 percent by 2030. Never has it been more imperative that our industry advocate for new building codes and rating systems that raise and enforce efficiency standards; and in the creation of financial incentives and the removal of disincentives to encourage investment in energy efficiency; in a systems approach to energy efficiency that represents a departure from the components approach of the past; and in the deployment of existing technologies already making significant contributions to improved energy performance.
Market-driven innovations in our industry will continue to move us toward a more energy-efficient future. But regulatory support is needed if we truly wish to see greater strides toward high-performance buildings and a more energy-independent and financially secure future.