RMI’s Testimony to Congress on the Value of Deep Retrofits

Victor Olgyay, an RMI Buildings principal who leads Rocky Mountain Institute’s RetroFit initiative, testified today before the U.S. House Subcommittee on Investigations and Oversight on the impact and importance of fossil-fuel reduction targets and green building rating systems.

His testimony was in support of continuation of Energy Independence and Security Act of 2007 (EISA) Sections 433 and 436. Two groups, the American Gas Association and the Federal Performance Contracting Coalition, have asked Congress to block the provision.

Testimony Highlights
Olgyay noted that U.S. buildings consume 40 percent of the nation’s energy and will continue to grow:

“The nation’s total building square footage is also projected to grow by 28 percent between now and 2030, and in that time frame roughly 60 percent of all buildings will either be newly constructed or undergo renovation. The way those projects are done—and how well they perform—will thus shape America’s energy footprint.

Therefore, in our view, those buildings are not a liability; they are an opportunity. RMI’s analysis, presented in our recent book Reinventing Fire, conservatively identified $1.8 trillion in current value via achievable cumulative building energy savings for the U.S. as a whole, captured with a total outlay of $400 billion over the next forty years. The employment impacts of this investment are also remarkable, because the work is inherently local and cannot be exported.”

Deep retrofits are possible, including for federal buildings:

“Over the years, RMI has guided projects designing highly efficient new buildings, including net-zero buildings, as well as deep energy retrofits for a variety of existing building types. These buildings work very well, and those done for the federal government can meet EISA criteria. A recent example is the Byron Rogers Federal Building in Denver. Funded by ARRA, this historic, poorly oriented center city high rise will, when renovated, be one of the most efficient office buildings in the country!

Byron Rogers, by the way, was redesigned with a clear path to net zero by 2030 in keeping with EISA. Success does require care in project selection and execution process, of course. But such care simply makes economic sense—and avoids the sort of shallow retrofit that must be redone, again and again over the years, costing money and destroying value.”

The EISA goals are becoming common in the building industry:

“The technical goals outlined in EISA 433 are in line with long-term targets that have now been generally adopted by the building industry. For example, the EISA 433 targets match the energy performance targets outlined by the Architecture 2030 Challenge, a widely used standard in the private sector, which result in 100 percent fossil fuel reductions for all new buildings and major renovations by 2030. Numerous major professional organizations have adopted the 2030 Challenge …”

“In existing buildings, where structural and logistical constraints exist, EISA regulations push project teams to not give up too easily, to strive find solutions to reach major energy reductions. In our experience such solutions usually exist. For example the plan to retrofit the International Monetary Fund headquarters—a very difficult space to work with—used EISA goals as a framework, and found opportunities for 60 percent energy reduction and a cost-optimized 50 percent energy reduction solution.”

Deep retrofits create jobs:

“With EISA Section 433 driving public and private organizations to deeper savings, it’s important to note the opportunity that energy-efficiency offers. A recent research study by the Rockefeller Foundation and DB Climate Change Advisors examines the potential size and investment opportunity of energy-efficient retrofits in U.S. real estate. The report states, ‘In the United States alone, more than $279 billion could be invested across the residential, commercial, and institutional market segments.

This investment could yield more than $1 trillion of energy savings over 10 years, equivalent to savings of approximately 30 percent of the annual electricity spent in the United States. If all of these retrofits were undertaken, more than 3.3 million cumulative job years of employment could be created.’”

Transformational, not incremental goals are needed:

“Without aggressive goals, public and private clients will default to implementing incremental efficiency without a long-term plan for deep savings. Convincing risk-averse building owners to undertake capital intensive and delayed payback renovations of their buildings requires a convincing leader to show the way. EISA 2007 has inspired a wave of comprehensive analyses of buildings’ life cycles, often revealing profitable opportunities for prudently investing to reach high efficiency.”