When Peter Gill Case founded his sustainability-focused architectural firm, Providence-based Truth Box Inc., in 2002, he had lofty expectations.
“I thought there was this race, that I was getting in front of this wave of energy-efficient demand that would just explode,” he said.
But the last 19 years have been, in Case’s words, “disappointing.” What Case imagined to be skyrocketing interest in green design instead was a reluctant embrace on the part of real estate developers, builders, and residential and commercial clients.
One major problem, according to Case and others in the industry, is that buyers of homes or commercial properties have no incentive to fork over more cash for an energy-efficient structure. Appraisals value granite countertops and hardwood floors but not better insulation or rooftop solar arrays. And unlike the miles-per-gallon sticker displayed on every car for sale at a dealership, there’s no information for buyers about a building’s current or projected energy use.
“When the only thing you know is price, you’re going to pick the house that’s a little cheaper,” said David A. Caldwell Jr., vice president of North Kingstown custom-homebuilding company Caldwell & Johnson Inc.
A new policy proposed in Providence seeks to change that. The Building and Energy Reporting Ordinance introduced before the City Council earlier this year calls for multifamily residences and large commercial and institutional buildings to assess and report their energy use. Down the line, there are required “energy action savings” for buildings with poor performance, enforceable by up to $40,000 a year in fines for those that don’t comply.
But even just having the information of how much gas and electricity a building uses – and the costs for owners or tenants – is an important first step to increasing interest in energy-efficient buildings, industry leaders say.
“You can’t manage what you don’t measure,” said Leah Bamberger, the city’s director of sustainability. “The whole idea is to bring transparency to the marketplace.”
While the ordinance, if enacted, would only apply to city properties, the state is also eyeing the policy.
‘The whole idea is to bring transparency to the marketplace.’
LEAH BAMBERGER, Providence director of sustainability
The R.I. Office of Energy Resources already offers some incentives for energy-efficient building and has seen participation among developers increase. But beyond the limited scope of program participants, OER doesn’t know how many or which buildings in the state are energy efficient, said Becca Trietch, the state’s administrator of energy efficiency programs.
Trietch said the state agency is working with building and permitting departments to collect that data and may consider a policy similar to what Providence has proposed as a way to drive the market toward greener and especially net-zero energy buildings, which will be critical to the state’s ambitious renewable energy goals.
“Zero-net-energy construction is not the norm, but we’re going to have to get to the point where it is not only the norm but the minimum standard by 2050,” Trietch said, referring to the date by which Rhode Island has set out to hit net-zero emissions.
While many incentives focus on new construction, retrofitting the state’s existing structures is important, too. In Providence, known for its iconic skyline of historic buildings, these oil-dependent and poorly insulated structures account for 70% of the city’s carbon emissions, according to Providence’s 2019 Climate Justice Plan report.
From a construction and design perspective, retrofits can be more technically demanding than building new, Caldwell said. And the costs are not cheap – a report on decarbonizing the state’s heating sector estimated a $100,000 cost to retrofit commercial buildings with energy-efficient heat pumps. This cost displeased business groups that fought the state Act on Climate legislation, which sets incremental and court-enforceable targets for decarbonization. The measure was approved in April.
National Grid Rhode Island offers a host of rebates and other incentives for energy-efficient upgrades, both residential and commercial. However, participation in many of these programs declined during the pandemic due to the temporary suspension of in-home services, according to a report submitted to the R.I. Public Utilities Commission.
These programs are expected to pick up again. But they still fail to capture 100% of the market, acknowledged Kevin Rose, a senior analyst for National Grid’s energy efficiency team. Rose said the lack of education and awareness is a barrier – the exact challenge Providence’s ordinance seeks to address.
“If people don’t think they’re going to be able to sell or market this more efficient home or building, they can’t justify the premium,” he said. “There are definitely pretty significant gaps in broader market actions around messaging and real estate value.”
Case said the incentives need to be larger, and the approach more coordinated across industries.
“We have these huge, ambitious goals but we don’t have the ability, building by building, to reach them,” he said.
Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.
