What DOE’s New Efficiency Standards Mean For Commercial Real Estate

To close out 2015, The US Department of Energy (DOE) passed a number of efficiency standards with little fanfare, despite the huge implications on building operations, expenses, and the health of the planet. These standards will reduce emissions by more than 900 million metric tons of carbon pollution as part of the Energy Department’s goal to reduce carbon emissions by 3 billion metric tons by 2030.

Here’s what most media outlets haven’t talked about:


Energy Efficiency Standards For Commercial Air Conditioning

Hailed as the “largest energy-saving standard in history” by US Energy Secretary Ernest Moniz, the DOE released new standards for commercial air conditioning and furnace units, also known as rooftop units. In 2018, new units must be 13% more efficient than current products on the market. By 2023, these updated units will need to increase efficiency by an additional 15%.

Rooftop units consume so much energy that the new efficiency standards will cut back on emissions by 885 million metric tons of carbon. In turn, building management will save $167 billion on their utility bills over the lifespan of the appliances. To put these numbers into tangible terms, the new rooftop units “will save about the same amount of energy as all the coal burned in the U.S. to generate electricity in a year,” President of Natural Resources Defense Council, Rhea Sun, said.

Generally, rooftop units are replaced every 10-15 years, so within this timespan engineers may purchase a new unit that is incredibly more efficient than the current system. For the next few years, the pressure is on manufacturers to create better, more energy efficient appliances. Building managers and engineers need to start considering these new technologies when they enter the market. If you’re looking to replace your commercial air conditioning, heat pumps, or warm-air furnace units in the next few years, waiting until the new units are on the market would significantly reduce energy expenses and emissions of the building.


First-Ever Commercial and Industrial Water Pump Standards

Up until a few weeks ago, there were no standards on commercial and industrial water pumps. In conjunction with a number of key stakeholders, the DOE set a standard using the Pump Energy Index (PEI). This standard is assigned a value of 1 on the PEI; a pump that runs 10% more efficiently has a PEI value of 0.9, a pump that runs 20% more effectively has a PEI value of 0.8, etc. This new rule will take 25% of current inefficient pumps off the market – or back to the lab to make them more efficient – and encourages the development of pumps that use less electricity and waste less water.

This inaugural pump standard is slated to save businesses more than $1 billion in energy expenditures while preventing 17 million metric tons of carbon emissions over the next 30 years. As development of new pump standards and deployment of more advanced technologies become available, the US will be able to further reduce emissions and help businesses stop throwing money down the drain.


Global Impacts of Efficiency Standards

Particularly with the Paris Climate Summit, the US will look to new ways to combat climate change and greenhouse gas emissions. Buildings are now becoming a key piece of the environmental puzzle. As commercial buildings waste 30% of the electricity they consume, the potential for innovation in efficiency is great. The recent standards are just part of the stepping stones to better operational effectiveness. And although these standards are aimed at environmental benefits, all stakeholders in the commercial real estate space will benefit on their bottom line; better efficiency means there will be reduced waste in expenditures and budgets, too.

Soon, all commercial rooftop units and water pumps will meet a standard of efficiency within the next decade. Building managers and engineers will need to make purchasing decisions on when to retrofit their appliances. If the most efficient equipment on the market is purchased, the building managers and engineers could see a big reduction on their energy bills and meet efficiency standards for years. Even greater efficiency can be achieved with operational optimization.

As the Department of Energy continues to work towards its goal of reducing US carbon output by 3 billion metric tons, expect building efficiency to be a hot topic on the path to mitigating climate change.

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