Students: Adam Benson, Edgar Vargas, James Bunts, Justin Ong, Kelsey Hammond, Lindsey Reeves, Mack Chaplin, and Peter Duan

Client: CB Richard Ellis

Advisor: Paul Bunje

Final Report

The U.S. has invested billions of dollars to simultaneously improve its energy independence, create jobs, and reduce environmental impacts. Under the American Recovery and Reinvestment Act of 2009 alone, over 27 billion dollars were allocated to improving energy efficiency and renewable energy research and investment. While supply-side technologies receive the most press, energy consumption reducing technologies can also yield many of the same benefits. Currently, commercial real estate buildings constitute 18% of all U.S. energy consumption and have potential for significant reductions through cost-effective energy retrofits. Due to the complexities of the industry, however, these retrofits are not being installed. Our research is focused on identifying these complexities and establishing a better understanding of commercial building retrofits. Building owners and tenants have primarily stayed away from energy efficiency upgrades to their buildings because of perceived high upfront costs and uncertain returns. To analyze this line of thinking, we examine 129 commercial building retrofit reports to explore financial trends and returns. In addition, we surveyed organizations that perform energy efficiency retrofits to gain better perspective about the market and the drivers that relate to it. For conformity, our research focuses on insulation, lighting, HVAC, and solar retrofit projects. Our findings help build a foundation for understanding the current state of commercial building retrofits. The retrofit report data suggests that lighting is the least expensive retrofit while HVAC is the most expensive to install per square foot. Despite this, our surveys indicate that most organizations are primarily interested in HVAC commercial building upgrades. Both the retrofit report analysis and survey results suggest that decision makers expect a payback period between three and five years.