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The Building Energy Efficiency Opportunity Heats Up


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Emily McLaughlin, Senior Associate, Market Engagement, Institute for Market Transformation
One of the fastest-growing sectors of the property risk assessment industry is building energy efficiency. A confluence of economic, regulatory and technological forces are driving more attention onto a building’s operating efficiency. This trend is opening up new, exciting opportunities in the property condition assessment space. Speakers will address the developing ASTM Green PCA standard, the popularity of green lending programs at Fannie Mae and Freddie Mac and the data being harnessed to measure a property’s energy efficiency during property due diligence.

Published in: Environment
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The Building Energy Efficiency Opportunity Heats Up

  1. 1. The Building Energy Efficiency Opportunity Heats Up Emily McLaughlin EDR PRISM Conference Scottsdale, AZ May 9, 2018
  2. 2. IMT’s Vision A world in which buildings are efficiently and positively transforming our physical, social, and economic wellbeing
  3. 3. IMT’s Mission Catalyze widespread and sustained demand for high-performing buildings
  4. 4. 0.0 20.0 40.0 60.0 80.0 100.0 120.0 BRAZIL CANADA GERMANY JAPAN INDIA RUSSIA U.S. BUILDINGS UNITED STATES CHINA Buildings in the U.S. use more energy than most countries use and account for 40% of U.S. carbon emissions 2011 Total Primary Energy Use (Quadrillion BTU) Why Buildings?
  5. 5. High-Performance Vs. Traditional Buildings High-Performance Building Snapshot • 40% - Total energy consumption • 28.8% - Increase in NOI per sq/ft • 17.6% - Reduction in operating expenses per sq/ft when compared to non green properties Buildings with a lower source EUI (i.e. more efficient) have a lower risk of mortgage default. Sources: DOE & LBNL
  6. 6. 75% City Energy Project Funders Expanding City NetworkHub Staff
  7. 7. Landlord Tenant Energy Partnership Real estate broker education Small Business Energy Initiative Other IMT Initiatives
  8. 8. Financing Energy Efficiency Through Mortgage Loans • Goal: Analyze market connection between PCAs, energy efficiency, and commercial mortgages. • Use energy efficiency to inform underwriting of commercial mortgages. • Input from over 70 companies and individuals • Most major banks do not underwrite to energy efficiency for commercial mortgages.
  9. 9. Energy Efficiency Loan Financing Options
  10. 10. Overcoming the market gap Building owner education PCA Lender knowledge & client demand OPPORTUNITIES FOR BUILDING OWNERS • Ask about financing energy efficiency in mortgage loans. • Select PCA firms that incorporate energy efficiency. OPPORTUNITIES FOR LENDERS • Require energy audits during PCAs • Design and implement specific business strategies/products to finance energy retrofits • Energy efficiency lender education
  11. 11. Emily McLaughlin Institute for Market Transformation 202-525-2883 x312 Thank You!