In my forthcoming book, "Reinventing Green Building," I identify 10 megatrends that I believe will shape green building technologies, markets, government rules, and certification systems through 2020 and beyond.
The strength of a megatrend is that we can’t wish it away; it’s here to stay. The key issue is how to take advantage of it. In the realm of technology, the turn to mobile computing after the introduction of the iPhone in 2007 and the iPad in 2010 is clearly such a trend, one that building owners and green building proponents cannot ignore.
Globally, green building will likely continue its worldwide growth, especially in most countries of Europe and North America, as well as in fast-growing countries in the Asia-Pacific region, South America, and the Middle East. Each year, more government agencies, universities, property developers, and corporate real estate managers incorporate green design ideas and measures into their buildings and facilities. There is nothing on the horizon that will stop this megatrend.
It’s worth noting that five of these 10 trends revolve around energy: energy efficiency, zero-net-energy, cloud-based (and data-driven) energy management, energy performance disclosure, and solar power. These are largely impelled by two practical considerations: first, for most buildings, energy is the largest uncontrollable operating cost; second, the growing understanding of a connection between building energy use and global climate change means that corporate social responsibility and government action will result in rising demand for building energy efficiency.
1. Growth Rate of Green building certification is slowing down.
Green building in North America, Europe, the Middle East, and Asia-Pacific will continue to grow as more building owners come to accept the business case, especially for larger office buildings, corporate real estate, and high-end university and government buildings. Green building project registrations accounted for about 20% of total new construction project area in the U.S. during 2014 (but only about 15% of actual certifications). The 2015 Green Building Adoption Index documents the continued strength of both Energy Star and LEED certification in the U.S. commercial office market.
However, in contrast to the new construction market, the 2014 tally of less than 200 million sf of existing building certification represents an annual increment of only 0.2%. At the end of 2014, the U.S. total for LEED certifications remained abysmally low—about three billion sf, or about 3.6% of the 85 billion total area of existing commercial buildings.
Slower growth of green building certification in new construction doesn’t mean that important elements of sustainable design are being ignored. My point is that certification as a practice is increasingly falling by the wayside. This has implications for both certification organizations and sustainability in the built environment.
2. Energy efficiency leads the way.
Since 2012, energy-efficient green building retrofits have shown stronger growth than energy-efficient new construction. This trend has been most pronounced in corporate and commercial real estate, along with “MUSH” (municipal, university, school, and hospital) market projects. In the MUSH market, cheap capital and the emergence of energy service companies (known as ESCOs) have encouraged building owners to trade future energy savings for upgraded or modernized physical plants. (The federal government equivalent, Energy Service Performance Contracts, chose 16 national vendors in 2012 for $85 billion of work for government agencies.)
In The World’s Greenest Buildings: Promise vs. Performance in Sustainable Design, I made the case that absolute building performance, with resultant lower operating costs (vs. the currently more common “relative improvement” approach) is going to be an increasing focus for green building.
There are huge opportunities in energy efficiency, and most are concentrated in 25% of the building stock. A more cost-effective approach to certifying existing buildings should also attempt first to take advantage of the concentrated nature of efficiency opportunities by launching a rating system tailored for such buildings and their key performance indicators.
3. Zero-net-energy buildings are on the rise.
Zero-net-energy buildings are become increasingly commonplace. A 2014 survey by the New Buildings Institute (NBI) identified more than 160 ZNEBs in the U.S., with an additional 53 low-energy buildings that were “net zero energy capable.”
If a project wants to be newsworthy, it needs to incorporate something NEW. Developers of speculative commercial buildings (and, in some places, new home developments) have begun to showcase ZNE designs to differentiate their projects. This trend has been developing slowly since about 2011 and now seems ready for takeoff.
However, the 2014 NBI study could verify as net-zero only 33 buildings out of the reported 160 total. This means that the number of “verified” ZNEBs is likely to remain lower for some period of time.
4. Competition among green building rating systems will step up.
In the U.S., LEED may see heightened competition in new construction ratings from the Green Globes rating system and possibly from new entrants in specialized niches, such as retail or office interiors. In 2013 and 2014, the federal government put LEED and Green Globes on an equal footing for government projects, lending further legitimacy to Green Globes.
BREEAM International is marketing its system in 60 countries and seems poised to enter the U.S. market should the new LEED v4 falter. BREEAM has already established a beachhead in Mexico. In Europe, the UK’s BREEAM rating system is aggressively marketing itself in Western Europe, where it competes with country-specific systems such as HQE in France and DGNB in Germany and Austria.
Other North American systems include the Living Building Challenge (with few certifications) and LEED Canada, which competes in existing buildings with BOMA Canada’s BOMA BESt system. BOMA BESt has certified more than 3,000 existing projects since 2005.
In Asia-Pacific, the likely scenario is for country-specific rating systems to dominate, especially in more established markets such as Australia, Singapore, Japan, India, and China.
5. Look for a sharper focus on existing buildings.
Starting with the global financial crisis of 2008–2010, the green building industry began to switch from evaluating new building projects to assessing existing buildings and tenant spaces. This trend has been solidly in place since 2011, and I expect it to accelerate, for two reasons. First, the uptake of third-party green building rating for new construction peaked during 2012–2014 and is now a steady 2,000–2,500 projects a year in the U.S., representing about 300 million sf of new construction a year.
With new construction certification basically flat, the existing building market is getting greater attention, particularly with energy-efficiency retrofits and a renewed focus on using the Energy Star system. LEED certification is hardly as newsworthy as it once was. LEED existing building certification accounted for fewer than 550 buildings in 2014, about 1% of the total U.S. nonresidential building stock of 5.5 million buildings.
6. Cloud computing/Big Data will provide much-needed direction.
Building owners and third-party service companies increasingly manage larger buildings remotely, using software platforms that provide performance monitoring, data analytics, visualization, fault detection and diagnostics, portfolio energy management, and text messaging, all using the cloud.
This trend is reflected in the large number of new offerings in building automation, facility management, wireless controls, and building services information management in the last few years, as well as the spread of energy dashboards, cheap sensors, a greater awareness of the business case for energy upgrades, and more government regulation and actions for cutting energy use.
7. Cities and states will demand building performance disclosure.
Since the 2007 adoption of the Architecture 2030 standard—which encourages all existing buildings to cut energy use 50% compared with 2005 levels, and all new buildings to be net zero by 2030—and the introduction of the first “2030 District” in Seattle in 2010, group efforts to cut carbon emissions and encourage voluntary performance disclosure has emerged as a major trend in the U.S. Ten U.S. cities had functioning 2030 Districts by mid-2015. Both initiatives capitalize on concerns over climate change and incorporate values of openness and transparency embraced by many government agencies.
In the U.S., this trend is highlighted by more than 30 large and medium-sized cities requiring—not just “encouraging”—commercial building owners to disclose actual green building performance to tenants, buyers, and, in some cases, the public. By mid-2015, Boston, New York, Philadelphia, Seattle, San Francisco, and Washington, D.C., had such ordinances.
This trend will spread rapidly as the easiest way to monitor reductions in carbon emissions from commercial and government-owned buildings. It will put pressure on owners to invest in energy-efficiency retrofits and renovations.
In the European Union, some form of performance disclosure for both new and existing buildings has been mandatory since 2010. Under the Energy Performance in Buildings Directive (initially developed in 2003 but not fully implemented until about 2010), a buyer, lessee, or renter gets the disclosure form as part of a transaction. The Energy Performance Certificate is often shown as a relative scale (similar to Energy Star in the U.S.), so full disclosure of actual performance still lags (in terms of energy use intensity [EUI], either Btu/sf or kwh/sm). There are also Display Energy Certificates for existing buildings, but they have not been widely adopted.
In Australia, the NABERS energy rating system has seen mandatory disclosure in commercial real estate transactions since 2010.
8. The Debate over healthy materials will become even more vexatious.
There is little doubt that the debate about healthy building products, the value of environmental product declarations and health product declarations, and the composition of various “red lists” of chemicals of concern that designers should avoid in building products will expand and grow more contentious.
The problem is that there are few accepted national consensus standards for determining the information that should be in an EPD or HPD and how that information should be verified.
Nonetheless, it’s easy to predict that building product manufacturers will try harder and harder to compete for market share based on disclosure of various chemicals of concern. A June 2015 report by Building Green News found 1,852 HPDs available from 698 brands.
It’s also easy to foresee that industry-developed disclosure systems will compete with “verified” EPDs offered by independent rating organizations. This could lead to massive market confusion for product specifiers, who must choose between proven products that they know from experience are appropriate for a given use, and newer products that claim to be healthier because they meet certain criteria from one or more rating organizations.
9. Solar power will break through.
Solar use in buildings will continue to grow, primarily because a number of U.S. states are expected to implement aggressive renewable portfolio standards (RPS), even as the whole country moves toward zero-net-energy buildings.
In mid-2015, 37 states, among them California, New York, and Texas, had some form of renewable portfolio standard, mandating a percent of total electric generation from renewables. California’s RPS is the most aggressive. It mandates one-third of total electric generation to come from renewables by 2020.
The persistence of low interest rates in the U.S. makes financing capital-intensive solar energy systems easier, especially in combination with requirements in many states that electric utilities implement “net metering” programs. Such programs pay building owners for surplus electricity produced at the same rate as power purchased from the local utility. In the U.S., most electric utilities would rather build and control large central solar power plants than lose revenues to tens of thousands or possibly even hundreds of thousands of rooftop PV systems feeding solar power into “their” grid.
New tools will further encourage building owners to use solar power. Google’s new Project Sunroof, announced in August, combines aerial 3D models from Google Maps, historical weather data, utility prices, and the value of local incentives. From this information, anyone will be able to readily assess whether covering a rooftop with PVs would result in energy cost savings.
Solar power has one advantage over other forms of energy efficiency. It is highly visible. Photovoltaics on the roof of a building demonstrate to employees, customers, and the public that a firm or institution is committed to renewable energy and a greener future.
Solar electricity is likely to reach grid parity in the U.S. within the next five or six years, by 2020 or 2021. In June, Bloomberg New Energy Finance predicted that solar power costs would fall another 50% and solar investment would total $3.7 trillion in the next 25 years, of which 60% would go to rooftop and decentralized systems.
Of the 10 megatrends discussed here, solar power growth is the only one that is truly revolutionary and likely to radically alter how buildings are designed, built, and operated in the next 10 years.
10. Expect heightened emphasis on water conservation.
Awareness of the coming crisis in fresh water supply in many regions of the world will increase as climate change continues to affect rainfall and water supply systems worldwide. The 2014–2015 drought in California, with more than 70% of the state in extreme drought by summer 2015, brought water concerns to national attention.
Heightened concern about the impact of future droughts on water supply and cost is prompting many building designers, owners, and managers to consider ways to further reduce water consumption in buildings by using more water-conserving fixtures, installing rainwater and graywater recovery systems, planting native and adapted vegetation in place of lawns or ornamentals, investing in more efficient cooling towers, and other innovative approaches to reducing on-site water use. Case studies in my book, Dry Run: Preventing the Next Urban Water Crisis, show how this is being done in Germany, Australia, and other countries.
I believe that certain of these megatrends—a strong focus on energy efficiency, greater use of renewable energy (mostly solar power for buildings), and improved water conservation—should form the core of new green building rating and certification systems.
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