The city of New York ran into the same problem as many other building owners when it comes to energy efficiency. The tenants in the buildings didn’t directly pay their utility bills, so it was hard to get them interested in saving energy, especially if it meant capital intensive retrofits.
“Why would an agency invest their own money if we pay the bill?” asked Ariella Maron, deputy commissioner for energy management at the NYC Department of Citywide Administrative Services, the department that pays the city’s energy bills.
To combat the problem, the city decided to put agencies on the hook for their energy budgets across about 4,000 buildings. If they were under budget, they got the difference, but if they were higher, they had to pay. In the first three months, administrative services paid out $900,000 but collected $1.5 million. “For the first time [agencies] cared what the energy mangers wanted,” Maron said during a panel discussion hosted by Clean Energy Connections, “Intelligent Infrastructure: Designing Smart Buildings for NYC.”
In the commercial space, green lease language is also bringing energy to the forefront, according to Constantine Kontakosta, Director of the Center for the Sustainable Built Environment and Clinical Associate Professor at NYU’s Schack Institute. Although the discussion was about intelligent infrastructure, the conversation was more focused on how data from buildings will allow the business of efficiency to scale up.
“As lenders get more info about how buildings perform before and after retrofits…traditional lenders will be more comfortable with how to relate to them,” said Kontakosta.
The conversation was less about technology than capital markets and policy. But the former will drive the latter, especially with benchmarking data becoming available.