Greening existing buildings is no problem given today’s technology: the hard part is getting the property industry on board, said experts at a green building conference last month in Singapore.
Terence Tan, director of Singapore’s integrated building services division of New York-listed Johnson Controls, told Eco-Business in a recent interview that there was no shortage of knowledge and technology to fix the current stock of inefficient buildings. The problem, he said, is getting the building and property sector to commit to retrofitting, or modifying existing buildings to increase their efficiency and performance.
Retrofitting solutions face a number of barriers; the first of which is the misperception that only new buildings can be green buildings, followed by the belief that retrofitting costs are prohibitive, he said. Yet, the ability to finance a retrofitting is very often not the barrier itself, and over the long term, retrofits tend to pay for themselves in reduced energy costs, added Mr Tan.
According to surveys from the Johnson Controls-supported Institute for Building Efficiency, the number one reason cited for why retrofitting is not taking place, despite its economic benefits, is lack of funding.
Mr Tan said that by only focusing on the upfront costs of projects and not understanding the benefits of energy efficient technology, businesses are missing the potential savings from retrofit investments. “They’re looking at how much it costs to do it and not looking at the return,” he said.
Returns in the form of saved energy costs from energy efficient technology can be hefty. Improvements in air-conditioning systems, which in Singapore consume 50 to 60 per cent of the total energy bill of a commercial building, can provide a 35 per cent savings.
Because businesses limit themselves to a narrow approach, noted Mr Tan, “the whole idea of retrofitting is killed before it can be evaluated.”
He said that to overcome these barriers, the building industry needed to change mind sets by generating awareness of the benefits of retrofitting existing buildings. Some of those benefits include lower maintenance and operating costs, higher occupancy, increasing attractiveness to investors and increases in asset value on the real estate market.
The Pomo Building on Singapore’s Selegie Road is one example of the potential for increased asset value. After a green building retrofit from property developer Lend Lease using Johnson Controls technology, the property sold for a 40 per cent internal rate of return.
“If you weigh the benefit versus the investment cost, green building makes a lot of sense,” said Mr Tan.
The problem is that generally Singapore’s valuation industry doesn’t weigh the benefits, he added. “There is no set way to measure green building attributes, so they don’t put a premium on them,” he said.
To overcome this problem, the National University of Singapore’s department of real estate is working with the Republic’s Building and Construction Authority and six property consultancy firms to develop valuation guidelines for commercial green buildings. The resulting guidelines will be taken on board by the Singapore Institute of Surveyors and Valuers (SISV).
New legislation regarding Singapore’s building laws may also help overcome the industry’s resistance to retrofitting. Last month, the government announced it would be amending its building laws to require buildings undergoing renovations and retrofitting to meet minimum energy efficiency standards. The amended laws will also mandate energy efficiency audits for cooling systems in existing buildings every three years.
The rational for stricter energy efficiency regulations comes from a growing global awareness of the impacts of the building sector on greenhouse gas emissions and rising energy demands. Singapore’s Ministry of the Environment and Water Resources estimates the building sector contributes about 16 per cent of the Republic’s CO2 emissions. Much of that is due to inefficient building systems, according to a recent NEA study, which found that most of the air conditioning systems of existing commercial buildings performed poorly compared to today’s market standards.
To reduce carbon emissions from buildings and decrease demand for energy, Singapore set a goal in its 2009 sustainability blueprint to green 80 per cent of its buildings by 2030. 90 per cent of the projected building stock for that year has already been built.
Mr Tan’s colleague - and the managing director of Johnson Controls in Singapore - Helen Wu, told Eco-Business that if Singapore is going to achieve its green building targets, it will have to look at existing buildings. And the only way to make them green is through retrofitting, she added.
Ms Wu welcomed the announcement of the pending legislation. She said it was typical for Asia’s building sector to wait for a clear mandate before acting, and that the new legislation would prove helpful in spurring energy efficiency improvements.
Mr Tan agreed: “It is the right thing to do. It will help raise the awareness of building owners and can help them save 30 to 40 per cent of their energy costs.”
“For the government to meet its green building goals without the participation of the business and building sectors would be impossible. With the current mind set of the building sector, it will definitely require leadership from the government,” he added.
Government leadership, he added, is taking several forms. In addition to new regulations and a variety of incentives, the government is setting an example by greening all of its public buildings.
Mr Tan said the momentum from these initiatives will push the industry forward.
Companies from the building sector that do not follow suit face a significant risk as green buildings become more mainstream, he noted.
“They will eventually be left out of the race, and investors will bypass their assets in favour of green buildings,” he said.
