Posts tagged “real estate”
This is the first guest authored post for Banking Energy. I am most grateful to my friend Allison Asplin for writing this piece. Allison is currently a fellow with Bloomberg New Energy Finance, prior to a brief return for more education she was Development Manager and Director of Sustainability for one of the largest REITs in the country.
Allison had recently completed a substantial (and excellent) review of the challenges with deploying energy efficiency at scale. Having read that, I asked her to do a compressed version of that review for this column and she graciously agreed. All of this information comes from her real-world experience now rounded out by research and analysis in her current role. As always your comments and questions are encouraged.
How does the real estate industry make energy efficiency decisions? And what part of the process is holding back adoption? Five main ‘friction points’ can slow or stop the momentum for energy efficiency adoption by the real estate industry.
Figure: Real Estate Industry Interfaces and Energy Efficiency ‘Friction Points’
Recent analyses by Bloomberg New Energy Finance suggest that opportunity exists for energy efficiency investment of $11 billion per year in US commercial real estate and $3 billion per year in multifamily. Nevertheless, conflicting incentives among stakeholders hinder energy efficiency investment in these segments. These stakeholders fall into five broad categories: developers, owners, occupants, lenders, and managers. At each interface between categories, ‘friction points’ arise, diminishing the impetus for energy efficiency.