Originally published in Climate Urgency, Climate Action. Second in the BPS series.
In the last newsletter, I explored the complexities of complying with Building Performance Standards (BPS), emphasizing the importance of participatory policy design. We highlighted how community collaboration can enhance the effectiveness of BPS, drawing on examples from jurisdictions like Boston. Today we are going to talk about one of the big barriers to compliance, and what a group of BPS policy wonks, researchers, entrepreneurs, and implementers have to say about how to overcome it: the cost to building owners.
Understanding Compliance Costs
Compliance with BPS involves both capital and operational costs. Capital costs often include expenses related to building retrofits, such as upgrading insulation, windows, or HVAC systems to improve energy efficiency. On the other hand, operational costs encompass ongoing expenses like benchmarking, submetering, audits, and the development of energy management plans and operations and maintenance programs.
Looking at the paper presented at ACEEE, Translating Potential into Performance: Assessing Compliance Costs and Policy Improvements to Maximize Building Performance Standards, the compliance costs, or operational costs associated with BPS are estimated at about $4.50 per square foot. The takeaway? Capital costs are at about that cost, as well. We need operational costs to decrease, and fast!
Collaborative Efforts at ACEEE’s Summer Study
Earlier this month, our BPS team hosted an informal session at ACEEE’s Summer Study in Asilomar, gathering 25 of our colleagues to brainstorm strategies for reducing operational costs. This session drew inspiration from past initiatives to lower the soft costs of solar energy, such as permitting and inspection, which significantly decreased from several dollars per kWh to less than a dollar per kWh by the end of the 2010s.
Strategies to Reduce Operational Costs
Training and Support
Providing comprehensive training for building operators and compliance consultants to ensure everyone has the necessary skills for efficient compliance. This includes engaging utilities to offer resources, especially in rural areas, to ensure equitable access.
Automated Data Management
Implementing tools for auto-uploading data to platforms to streamline processes and reduce manual labor. Data collection is crucial for utility programs and building performance standards as it provides the necessary information to assess energy usage, set benchmarks, and track improvements.
Financing Strategies
Green Banks and Bulk Procurement: The group was pretty excited about Green Banks. They really wanted us to spend a concentrated effort working green banks so that building owners could get advantageous interest rates, and work with others in coalitions.
On-bill financing: Utility support is going to be vital for BPS compliance. Utilities will need to be offering resources and training, and also providing easily accessible on-bill financing to ease financial burdens by allowing costs to be paid through utility bills.
HUD and Foundation Funds: Leveraging external funds from organizations like HUD and various foundations can provide additional financial support for building upgrades, particularly in low-income or underserved communities.
The group also suggested using energy fellows and making sure that jurisdictions implementing BPS are collecting and using fines to make compliance easier for those who are struggling.
I told a story at Summer Study several times about why I joined the energy industry in the first place, and it was all going back to that strong sense of community. I love walking into a conference and seeing old friends, making new friends, and knowing that we are all working together to make an impact on this planet.