Sustainability has always been a tough fit for retailers. The smaller profit margins under which most retailers operate and the short-term financial deals developers typically use in structuring retail projects make green retail challenging at best.
Recently, though, the tide has begun to turn as retailers have recognized not only the public relations value of “going green,” but also the economic advantages. These benefits include: greater productivity since employees working in green facilities typically have fewer health problems, lower operating costs, and increased interest among prospective tenants. In a recent survey of more than 1,400 facility management professionals, over 45 percent of respondents identified energy efficiency in buildings as their top carbon reduction strategy.
While green retail is gaining momentum, 2008’s economic downturn continues to shift the attention of many shopping center owners with large portfolios away from building new retail centers and toward retrofitting existing centers. The Institute for Building Efficiency concludes that while roughly two percent of commercial floor space is newly constructed each year, existing buildings represent the most opportunities of improving energy efficiency over the next several decades.
Some older retail centers have gone “all in” on retrofits. Federal Realty Investment Trust, for example, recently installed a roof and ground-mounted 1,146 kW solar panel system at Ellisburg Shopping Center, an aging center in Cherry Hill, New Jersey. The solar system provides approximately 20 percent of the electric needs for the tenants and common area of the center and an estimated lifetime carbon dioxide reduction of 22,992 tons.
More commonly, though, retail facility owners or managers are turning to simple retrofits that can be easily – and economically incorporated to make their centers more sustainable. For example:
1) Thermal envelope improvements (insulation, roofing, windows, etc.): By frequently inspecting their existing building stock for breaches in the thermal envelope caused by gaps, cracks, and missing insulation, owners and operation managers can increase energy efficiency and reduce the risk of indoor air quality problems.
2) HVAC upgrades: About 40 percent of the electricity used in commercial buildings is from their HVAC systems. Substantial energy savings can readily be achieved by increasing the efficiency of the HVAC systems. Have a professional inspect your system and ensure that is size correctly for the heating and cooling needs. Too often systems are too large for the requirements or undersized. Replacing components to match the heating and cooling needs with more energy efficient components could significantly reduce the operational energy costs.
3) Lighting upgrades: Compared to other energy saving strategies, lighting upgrades are typically the most profitable and easiest retrofit investment. The Energy Cost Savings Council determined that lighting improvements can produce a 45 percent return on investment in an average project payback period of just over two years.
4) Sub-metering: Retailers – including banks, grocery stores, and companies with multiple buildings require a sub-metering strategy to achieve additional energy savings beyond the traditional upgrades. Sub-metering makes tenants aware of their energy use and when tenants pay for what they consume, they become more prudent.
5) Waste heat recovery: Recovery of waste heat has a direct impact on the efficiency of the process, resulting in reductions in pollution, equipment size, and auxiliary energy consumption. The use of the heat produced by some building systems can be collected and used for other purposes. For example the high energy demands of refrigeration systems at a food retailer. The reuse of the waste heat from cooling and refrigeration systems can decrease the heating load of the store.
Double-glazed, low-E glass to reduce heat loss in the winter and heat gain in summer, energy-efficient HVAC units, and energy management systems to monitor the performance of buildings are just the tip of the iceberg. Retail centers can lower cooling costs by up to eight percent by adding lighter, reflective membrane roofs that will reduce air-conditioning requirements. Similarly, outfitting the facility with energy-efficient bulbs, controlling exterior and interior lighting with timers and sensors, and adding tree foliage to help absorb carbon dioxide and shade the building during summer can result in both cost savings and a reduction in energy consumption.
When exploring energy retrofits, an owner or manager should consider the payback period, the return on investment, and costumer perception. A typical energy performance upgrade in the U.S. can expect savings of between 3-15% on utility bills. Simple measures such as swapping out old commercial air handling units with energy-efficient versions at the end of their useful life can help to offset retrofit costs. Periodic reviews of building operating systems and procedures are essential for optimal energy efficiency.
Renewable energy sources will undoubtedly continue to play a larger role in green buildings as fossil fuel energy prices continue to rise. Shopping center owners and retail facility managers must carefully choose priorities when ranking efficiency projects, regardless of whether those priorities are social, financial or environmental. Improving efficiency certainly provides an environmental benefit, but from a financial perspective it is a winner as well.
Dustin Watson is a partner and director of sustainability at DDG and can be reached at firstname.lastname@example.org.
PHOTO CREDIT: DICK WOOD
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