Energy Ace reported in October about the “mainstreaming” of green design discussed in a Harvard Business Review article. Last month we reported on the NAIOP study: “Commercial Demand for Green Development Grows” and this month we see an article in Barron's, a well-respected business publication, saying "trillions of dollars of commercial real estate owned by REITs, corporations, and other investors around the world will soon become obsolete and drop in value" because of the marketplace shift toward green design and construction.

The article states that " speculative developers like Hines, the Durst Organization, Alter Group, East West Partners, and Microsoft co-founder Paul Allen’s Vulcan Real Estate are all constructing green buildings in cities across the U.S."

A real estate market shift doesn’t happen unless it’s profitable, and this green shift is no exception.

Green buildings are generating a significant Return on Investment (ROI). According to the McGraw-Hill 2006 SmartMarket Report, green generates 3.5% higher occupancy rates, 3% higher rent rates, an average increase of 7.5% in building values, and it improves ROI by 6.6% on average. Green buildings are fetching significant sales premiums. In Chicago, the John Buck Company spent US$270 million constructing the LEED-Gold 51-story 111 South Wacker Drive tower in the city’s Loop market. Completed in late 2005 when the Loop market was struggling with an 18% vacancy rate for Class A office space, the building leased up quickly to prestigious tenants. In January 2006, 111 South Wacker Drive was sold to a German investment fund for US$386 million, a $116 million profit, or a total sale price of $401 a square foot.

What’s the message? Get on the green bandwagon. If you want to find out how to go green, send for Energy Ace’s LEED factsheet, conduct a LEED Charrette (ask for our factsheet) or invite Energy Ace to make a “LEED 101” presentation to your organization.

Did you know that your building’s cooling tower can account for up to 30% of your building’s total water use? Even though cooling towers recirculate water, there are often significant water savings achievable because so much water is evaporated. Water savings in cooling towers is possible by increasing the cycles of concentration (or the number of time water is recycled in the tower) and by obtaining credits from your local water provider for the water evaporated and not sent back to sewer.

Another way to significantly save water is to upgrade your domestic water fixtures. If your plumbing fixtures were installed before 1992 significant savings, up to 75% for toilets, are possible.

Even if your fixtures were installed after 1992 there are still many options to help reduce your water consumption – most with exceedingly fast paybacks. For instance, commercially available faucet aerators are available in 0.5 gpm that could save 75% over a typical post-1992 faucet. Also, all of the major toilet manufacturers now sell dual flush toilets and flush-valves that reduce consumption by 25%.

For more information, send for Energy Ace’s Water Audit Factsheet. Information contributed by Adrienne Thorpe of the Georgia Pollution Prevention Assistance Division.

Federal tax credits for renewable energy and energy efficiency projects have been extended by a year. The Tax Relief and Health Care Act of 2006 extends the production tax credit through 2008 for electricity produced from wind power, geothermal power, biomass, landfill gas, small irrigation power, and trash combustion facilities. It provides a similar one-year tax credit extension for new properties that produce geothermal power or make use of solar energy; for homeowners that purchase solar water heating, solar photovoltaic, or fuel cell systems; for businesses that purchase fiber-optic lighting systems, solar energy systems, or fuel cell power plants; for new energy efficient homes; and for energy efficiency improvements to commercial buildings.

The act extends the Clean Renewable Energy Bonds program through 2008, and increases the total annual amount of tax-credit bonds to $1.2 billion. It extends special tax allowances for cellulosic ethanol facilities to include plants placed in service by 2012. It also extends the research and development tax credit, which encourages businesses to invest in new innovations.

This is a positive, but time-limited, step for promoting energy efficiency throughout the U.S. economy, says the Alliance to Save Energy. ASE maintains that the original two-year window for the tax credits, through 2007, was not sufficient to effect real market transformation and to make energy-efficient buildings the norm.

“We’re delighted that the 109th Congress recognized the importance of the existing energy-efficiency tax incentives to America’s homes and businesses by making the extension of these incentives one of its last official acts,” said ASE President Kateri Callahan. “We are disappointed, however, that Congress passed only a 12-month extension when businesses, in particular, have planning horizons that are much longer and often require certainty of future tax treatment in order to justify proposed expenditures on energy efficiency.”

The Congress did not include an extension of the federal income tax credit of up to $500 for American consumers who make qualified efficiency upgrades to their existing homes. The tax credit, which is set to expire at the end of next year, helps defray homeowners’ costs of energy-efficiency measures – from low-cost purchases such as insulation and sealants to more costly investments like new windows, furnaces, and central air conditioners – that, in turn, will lower consumers’ energy bills and their contributions to air pollution and global warming for decades to come.

Energy Ace is preparing a new factsheet on Tax Incentives, available shortly.

LEED for Commercial Interiors Technical Review Workshop in Rock Hill, SC (between Charlotte and Columbia) on Thursday, March 15, 2007. This workshop is an in-depth discussion of the credit requirements and certification process for LEED for commercial interiors. Instructors will address the basic principles of sustainability as they relate to tenant improvement projects, and presents the definitive standard for what constitutes a green interior. You'll also learn about technologies and strategies for achieving LEED credits to optimize performance of leased spaces. Visit http://chapters.usgbc.org/southcarolina/ for more information.

Energy Ace publishes newsletters monthly, covering topics of interest to architects, engineers, and facility managers and Owners on commissioning, LEED, and energy.

In 2006 we discussed the Federal Tax Incentives for Energy Conservation, the Economics of LEED, More Evidence of Global Warming, LEED Upgrades, the rising cost of energy - natural gas, electricity and gasoline, new air conditioner energy efficiency standards, pocket protectors, the ASHRAE Headquarters renovation project, how to find the cheapest gasoline, what does a sustainable school cost, green roofs, LEED Charrettes, the cost of building green, and saving money on electricity, and that was just in the first six months of the year.

In July through December we covered updates on energy tax incentives, gasoline prices, global warming, a feature project Two Peachtree Pointe in Atlanta, green power, rapidly renewable materials in construction, Energy Star Change a Light campaign, ethanol plant under construction, mainstreaming of green buildings (two articles), Energy Star's challenge to architects, advice on locking in on natural gas prices, school energy news, hotel/motel energy news, growth of LEED Buildings registered and certified, infrared thermography, my campus is greener than yours, geothermal commissioning, and green news.

Some of these topics are linked to factsheets Energy Ace has produced. Visit our newsletter page or our factsheet page to download any of interest to you.

Send us your resume if you are an engineer, architect, or sustainability consultant with qualifications and interest in LEED, commissioning, energy modeling, and energy consulting. This is a junior-level position in Atlanta.