Financial considerations

Upgrades to existing buildings usually occur in a piecemeal way, with each component replaced individually as it nears the end of its life. And while many building owners are willing to invest a little extra in order to replace an old model with a high-efficiency one, they are often less willing to commit to a deep, whole-building retrofit project.

These individual measures are often very attractive propositions, promising energy savings that result in fairly short payback times, and often subsidized by incentives designed to promote specific efficiency measures. However, the savings available through whole-building approaches make the larger investment worth considering despite the difference in upfront cost. A recent whole-building retrofit of the Empire State Building, for example, was projected to achieve energy savings of 38 percent - almost twice what a set of individual measures would likely achieveFootnote 1 - and surpassed its first-year goals by 5 percent, saving $2.4 millionFootnote 2.

Investments in energy efficiency can pay off in other ways too. A California study in 2009 showed that retrofitting your building to be energy efficient can increase your average rental rates by 3 percent and the selling price by as much as 16 percentFootnote 3.

And there's more good news, if your organization owns its own building: energy efficient buildings may improve worker performance. A 2009 study suggested that if you make your building greener, your employees may take almost 3 fewer sick days per year, and their productivity could increase by almost 5 percentFootnote 4. Since employee salaries are usually an organization's largest expense, these numbers represent significant savings.