Create Jobs, Save Taxpayer Money, and Conserve Resources

1. The Role of Energy in High-Performance Buildings
Create Jobs, Save Taxpayer Money, and Conserve Resources
Cliff Majersik
Executive Director, Institute for Market
Transformation (IMT)
HIGH-PERFORMANCE BUILDING CONGRESSIONAL CAUCUS
COALITION
--www.HPBCCC.org--

2. U.S. Building Industry
 Represents more than 50% of the
nation’s wealth
 New construction and renovation activity
amounts to over $800 billion
annually
 Responsible for13% of the GDP
 Employs over ten million people
(5% of total U.S. employment)

3. Today’s Realities
 New construction outlook remains weak
 Construction sector unemployment around 20%
 Buildings responsible for 42% of U.S. energy
consumption; building energy use projected to grow
 $422 billion annual energy costs
 70% of U.S. electricity consumption
 39% of U.S. CO2 emissions
 To remain competitive and profitable we must reshape
the efficiency of our building sector

4. “When it comes to saving money and growing
our economy, energy efficiency isn't just low
hanging fruit; it's fruit laying on the ground.”
- Secretary of Energy, Steven Chu
ENERGY EFFICIENCY:
 Promotes job creation  Reduces dependence
and economic growth on fossil fuels
 Reduces consumer  Ensures a stable &
energy bills reliable electric
system
 Strengthens property
values, revitalizes  Lowers greenhouse
communities gas (GHG) emissions

5. Macroeconomic
Impacts Energy U.S. GDP Expansion as a Function of
Efficiency Improvements, 1970-2008
3.50
U.S. Gross Domestic Product
3.00 GDP Index (1970=1)
2.50 Productivity
growth as a
function of energy
2.00
efficiency improvements
1.50
Expansion of the economy, based growth
1.00 in labor, capital, and energy
1970 1980 1990 2000 2008
Source: Laiter, Skip. ACEEE adapting Ayres and Warr (2009) using BEA and EIA data.

6. Lowest Cost ENERGY SOURCE

7. Oil Imports, National Security
Source: Center for American Progress, 2010

8. Economic Impacts
Energy
Jobs GDP CO2
savings
Center for Retrofitting 40% of the U.S.
Create 625,000
American building stock could: $500 billion $64 billion
new jobs
Progress (2010)
Create
By 2020, capturing the
McKinsey & 500,000- $685 billion 720
economy’s full efficiency
Company (2009) 750,000 new megatons
potential will:
jobs
Total value of the green
Supported 2.4 $1.3 billion
construction market 2000– $173 billion
2008 million jobs
USGBC (2009)
Projected value of the Support over
green construction market 7.9 million $554 billion $6 billion
2009–2013 jobs

9. High
Performance
Buildings:
Benefits to
 Lower utility bills,  Marketing/PR
Owners, operating expenses value
 Benefits beyond  Increase worker
Tenants energy savings: productivity
 Increase in building  Reduced employee
value sick days
 Higher rent  Enhanced ability to
premiums attract and retain
employees
 Increased
occupancy rates

10. A Familiar Concept
10

11. Small Businesses and Job Creation
Building Energy Rating and Disclosure
11

12. Small Businesses and Job Creation
A Virtuous Cycle
When performance is measured,
performance improves. When performance
is measured and reported back, the rate of
improvement accelerates.
One result:
Exceptionally
cost-effective
peak load
reductions
12

13. U.S. Policy Map, State and Local
Policy Map

14. U.S. Policy Overview
Policy Impact Projections
Annual Policy Impact Projection on Building Annual Policy Impact Projection on Number
Area (in Square Feet) by Jurisdiction of Buildings by Jurisdiction
 Approximately 4 billion square feet
 More than 3x the floor area of every Walmart, Target, Home Depot, Barnes &
Noble and Costco store in America
14

15. Policy Requirements by Jurisdiction
Why ENERGY STAR Benchmark?
Nearly 270,000 buildings ENERGY STAR benchmarked
• Economies of scale; already
widely used among building
owners for energy tracking
• Free, readily available online,
relatively easy to use
• Delivers energy performance
metrics based on utility data
• Supported by the US EPA
15

16. Small Businesses and Job Creation
Jobs
First report documenting job growth
from energy benchmarking policies
 Profiles of small businesses adding staff and
increasing client bases
 KEY TAKEAWAY: Financing not the key barrier.
Primary issue is demand.
16

17. Small Businesses and Job Creation
Jobs
“As a Silicon Valley venture capitalist … I tell our green startup companies to focus on San
Francisco or New York City. That’s where the action is going to be.”
- Elton Sherwin, venture capitalist, senior managing director, Ridgewood Capital
“The Greener Greater Buildings Plan has spurred the New York Market to interest and activity
around energy efficiency. Over the past year, we have begun working with over 75 million
square feet of real estate in New York and over 400 new clients.”
- Lindsay Napor McLean, COO, Ecological
“When an owner sees a benchmarking score that is lower than expected, they’re a little more
receptive to improvements to bring the score up, which in turn lowers their utility costs.”
- Kevin Dingle, president, Sustaining Structures
17

18. Energy and Job Impacts of Benchmarking & Disclosure
 Project advisory panel of leading real estate industry experts
 Jobs analysis by IMT and the Political Economy Research Institute at
the University of Massachusetts
 Hypothetical policy:
 Annual energy benchmarking and public disclosure
 Commercial properties 25,000 SF and greater
 Multifamily residential properties 20 units and greater
2015 2020
Energy Savings
(cumulative, $3.8 $18.2
in billions)
Net New Jobs 17,098 59,620
www.imt.org/energy-disclosure-and-job-creation

19. Incorporating Energy Efficiency into Mortgage Underwriting
Aligning mortgage policy with energy efficiency
 Energy costs now exceed
property taxes and insurance,
which are accounted for in
mortgage underwriting.
 A homeowner who spends less
on utilities will have more
money to make mortgage
payments
 For a typical house :
o Median home price - $175,000
o Average 30-year commitment to
energy costs - $70,000

20. Incorporating Energy Efficiency into Mortgage Underwriting
Mortgage Underwriting:
• Borrower capacity is adjusted for energy
costs.
• Value of the home reflects the energy
cost savings.
The Three C’s of
Underwriting
Capacity Collateral
Borrower’s ability to pay the Appraised value of the
Credit monthly mortgage home
Debt-to-Income Test Loan to Value Ratio
Energy “blind spot”

21. Incorporating Energy Efficiency into Mortgage Underwriting
• SAVE Act (S. 1737) introduced by Senators Bennet (D-CO) and
Isakson (R-GA)
• SAVE Act would create 83,000 jobs and $1.1 billion in savings to
Americans' energy bills in 2020
Annual Annual Energy
Year
Jobs Bill Savings*
2015 16,000 $95 million
2017 50,000 $380 million
2020 83,000 $1.1 billion
Source: 2011 study by the American Council for an Energy-Efficient Economy
(ACEEE) and the Institute for Market Transformation (IMT).
www.imt.org/SAVE_Act

22. Incorporating Energy Efficiency into Mortgage Underwriting
The SAVE Act: S. 1737
 Leading business, industry, and environmental support the proposal.

23. Cliff Majersik
Executive Director
Institute for Market Transformation
Washington, DC
cliff@imt.org
202-525-2883
Twitter: @IMTCliff
www.imt.org