Why smart buildings are even more valuable than you think

Wed, 2013-08-07 06:11 -- Jesse Berst
Rocky Mountain Institute recently posted a thorough discussion of the value streams from smart buildings. Most people, they explain, try to cost justify the technology merely on the basis of the energy it saves. But smart buildings bring a lot more value to owners and to cities, as they lay out.
The more value streams you can document, the easier it is to cost justify the move to smart buildings. The easier to justify, the sooner your city can start reaping the benefits -- reduced energy use, reduced carbon footprint, improved occupant productivity, improved city competitiveness and more.
We've summarized the key takeaways below, or you can read the full article. RMI staffers never say anything succinctly when they can obfuscate instead, so you'll have to wade through a lot of words. But if you are serious about making the case for smarter buildings in your city, you'll find it worth your time. - Jesse Berst

  • Financial savings alone make a strong argument for smart, efficient buildings. Studies have documented that a dollar invested brings back four dollars in savings in as little as 10 years.
  • Focusing on energy savings ignores other value streams. Energy-efficient buildings reduce absenteeism, improve employee health, lead to higher occupancy rates, bring higher rental rates, create higher sales prices and decrease financial risk.
  • Energy savings is necessary but not always sufficient to motivate efficiency investments, especially since landlords often get the costs but tenants get the savings.
  • The RMI approach assesses all the added values, applying industry-standard valuation methods. RMI is creating authoritative guidance, with the first phase to be published shortly.
  • Risk is one of the most important factors. RMI's integration of risk into the calculations can have a real impact.
  • "Green" office buildings rent for 3 to 6% higher and sell for 10% higher or more.
  • RMI separates the value to occupants from the value to investors.
  • With the introduction of RMI's Retrofit Value Models, investors now have a methodology for creating an accurate and compelling value analysis.

Jesse Berst is the founding Chairman of the Smart Cities Council. Click to subscribe to SmartCitiesNow, the weekly newsletter highlighting smart city trends, technologies and techniques.