LEED and the Future of Green Building
 

Vijaya Yellamraju
Thursday, October 7, 2010

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The first decade of this century saw the resurgence of the green building movement and the emergence of rating systems, such as LEED, BREEAM, GreenStar, etc., across the world. Many national, state, and local governments have embraced green buildings and are providing several incentives for their widespread development. As a result, green buildings have gained acceptance among public agencies, private sector developers, and institutional owners.

The LEED rating system can be regarded as a game changer that has catapulted green to the spotlight. Over the last decade, LEED buildings have had a tremendous impact on reducing CO2 emissions, water consumption, and material use.

In 2009 alone, annual CO2 savings from LEED buildings was estimated to be approximately 2.9 million tons from energy efficiency and renewables. Total water savings from LEED was estimated at 15 billion gallons, composed of 0.5 percent of annual nonresidential water use. Over 60 percent of construction and demolition waste was diverted from LEED projects, totaling 25 million tons to date and is expected to reach almost 800 million cumulative tons by 2030. The productivity benefits from LEED buildings to-date are estimated between $230 million to $450 million, according to the 2009 Green Building Market and Impact Report by GreenerBuildings.com Executive Editor Rob Watson.

The adoption of the LEED rating system may be regarded as an important first step in reducing the impact of buildings on global warming and climate change. However, there is still a long way to go before a momentous impact can be made.

This chapter presents various ideas, technologies, solutions, principles, and policies that are currently in the early stages of implementation and have a massive potential to take green building development to the next level. These ideas have been presented in the following broad categories:

•    Building design and construction
•    Building technologies
•    Building operations
•    Building finance
•    Building policies/regulation

Building Design and Construction

Performance-Based Design

In the coming years, the building design process will likely see a dramatic shift, wherein design decisions will be based on the anticipated performance of the building in terms of energy use, electricity  consumption, water use, and CO2 emissions.
Several sophisticated software tools such as eQuest, VisualDOE, Revit, etc., are already available in the market to help designers make these performance-based decisions.

The next decade is going to see an even greater rise in the use of such tools. Modeling the building's energy performance right from the beginning of design will become standard, whether a building is LEED or not. The modeled performance of the building will dictate its design, and operational efficiency will become an important factor during early design discussions.

Integrated Design Approach

The integrated design approach, currently in its nascent stages, is expected to soon become mainstream. Although the number of projects following this approach is still miniscule, it will hopefully continue to grow and find wider acceptance by owners, developers, and design professionals alike. The evolution of this process will most likely occur in an organic fashion. Even though a conscious decision to follow the integrated design approach may not be made, design teams will most likely end up following this approach because green building design almost demands it.

Green Codes and Standards

The development of the International Green Construction Code is a significant step in the direction of making green building design a code requirement. Therefore, developing green and energy-efficient buildings may no longer be a voluntary decision but a mandatory requirement.

Several green building standards, such as ASHRAE 189.1 and California's CalGreen, are taking shape to spearhead the process of widespread implementation of green building practices within the design and construction community. Most of these standards are currently voluntary, but soon cities and states will be embracing and eventually mandating them as standards that must be met to obtain a permit for construction.

Net Zero Energy Buildings

The ultimate goal that the building design community should strive for is zero energy buildings. Net zero energy buildings are defined as buildings that have zero net energy consumption annually. There are several examples of buildings all over the world that have already achieved net zero energy usage. However, the technologies and systems required to achieve this outcome require significant upfront investment. This is a significant barrier to entry that is impeding the extensive implementation of net zero energy concepts.

A number of initiatives, such as Department of Energy's (DOE) Zero Energy Commercial Building Initiative (pdf), the Consortium of Zero Energy Buildings and Architecture 2030, are conducting significant research to provide guidance in this regard. The next 20 years will likely see a tremendous growth in net zero buildings. Green codes, regulations, and voluntary programs such as LEED will constantly evolve themselves to push the building community toward achieving the coveted net zero status.
Buildings Anchored in Sustainable Communities

Generally speaking, buildings cannot be green or energy efficient in isolation. For buildings to truly reduce their environmental impact, they need to be located in communities that are planned with sustainability in mind.

During the early '70s, cities and communities were planned in a decentralized manner where people worked in the city and lived in the suburbs. Over the years, this has led to increased commute times, congestion from increased vehicle use, and increased strain on the infrastructure. The next two decades will see an increased emphasis on designing communities that are self-sustaining, transit oriented, pedestrian-friendly, and mixed-use developments.

Building Technologies

Advanced Energy Efficient Systems

Since LEED's inception in 2000, the last 10 years have seen a remarkable growth in several innovative technologies, products, and materials to cater to rapidly changing building needs. Widespread adoption of new technologies or products is often impeded by the high first-costs. It is important for the building community to find innovative solutions that are not only efficient but are also cost effective.

The next 20 years is anticipated to be an era of green innovation especially in the areas of HVAC, lighting, and building envelope technologies. The demand for energy-efficient buildings will fuel the development of cost-effective, energy-efficient products and systems.

Renewable Energy Systems

The development of cost-effective and efficient renewable energy technologies will be the single most important factor that will help in achieving the goal of net zero buildings.

Although there has been significant advancement in solar, wind, and geothermal technologies during the last 10 years, there is still a huge gap that needs to be bridged in the areas of system efficiency and cost effectiveness. Apart from the development of these technologies, there is also a need for training a workforce that is adept at installing, operating, and maintaining these systems.

The next decade will likely usher in tremendous growth of cost-effective and efficient renewable energy technologies that will help reduce the environmental footprint of buildings.

Smart Meters

The building community's effort to design and build energy-efficient buildings needs to be complemented with energy conservation efforts by the occupants. Typically, it has been observed that occupants are more actively involved in energy conservation efforts if they are aware of their energy use patterns.

Smart meters that allow building occupants to track their real-time energy use will help in encouraging energy conservation. Although practicing energy conservation measures is tied to behavioral and cultural patterns of occupants, incorporating smart-meters will allow tenants to manage their energy footprint actively.
Building Operations

Post-Occupancy Evaluation/Performance Monitoring

From an operational perspective, buildings are rarely evaluated after occupancy to see whether they are (a) functioning according to the owner's requirements, (b) performing as anticipated, and (c) satisfying the needs of the occupants.

Building owners and managers are usually weary of dissatisfied occupants and potential expensive changes that they may have to make. However, it is important to realize that evaluating the performance of the building after it has been occupied is an important tool in making future decisions.

This is especially important for managers of a multiple portfolio of buildings, as the evaluation of one building may provide them with valuable feedback that can be implemented at other properties. Although this type of monitoring is slowly picking up, post-occupancy evaluations are expected to become part and parcel of our building management process.

Green Leases

One of the biggest barriers in the implementation of green building measures by developers is the issue of split incentives where the benefit of operational efficiency is realized by the tenants and not necessarily by the developers. This dilemma often prevents developers from exploring all the green building opportunities, as they might not be able to recoup the high initial costs.

Several new leasing models referred to as green leases are currently under development to address this issue.

Green leasing is defined by the California Sustainability Alliance as "the integration of energy and water efficiency, emissions reduction, waste minimization, and other sustainability objectives throughout the entire commercial leasing process. Green leasing dictates that building performance become transparent to all parties involved in the lease transaction. This performance includes the efficiency in which the main engineering plant operates (HVAC, plumbing, lighting, etc.), the environmental standards of building materials, as well as the effectiveness of the building operations and management programs."

The Building Owners and Managers Association (BOMA) International has released a lease guide, Guide to Writing a Commercial Real Estate Lease, Including Green Lease Language, featuring step-by-step instructions to help building owners and managers write green operations and management practices into their lease agreements.

BOMA's new lease guide was developed to address commonly cited barriers to implementing green building practices. The guide serves as both a legal-language tool to help building owners and managers maintain a green building through best operations and management practices, and also as an education tool for working with brokers and tenants to outline what is expected of tenants in a high-performance green building and the responsibilities of all parties involved in the ongoing efforts to keep it green and encourage continuous improvement.

The next decade is expected to see further evolution of the green lease concept, ensuring that both developers and tenants are able to maximize their benefits from a green building.

Building Finance

Lifecycle Costing

Typically the budgets for buildings are allocated based on first time costs of design and construction. The cost associated with operations of a building over its typical 20- to 30-year life is rarely taken into consideration when allocating the capital budget of a project.
The awareness of operational savings achieved by energy-efficient buildings is making building owners (especially those who manage their own buildings) rethink their capital budgets. Owners are realizing the long-term value associated with an initial high-cost item and making decisions based on long-term, lifecycle costing methodologies.

However, the percentage of projects following this approach is still small, and there is a need to develop better lifecycle costing tools that can assist owners in making decisions based on long-term benefits. It is hoped that the momentum that has been built in this area will continue to pick up, and sooner rather than later, lifecycle costing will become part of how building budgets are finalized.

Power Purchase Agreements

An important factor impeding the rapid installation of renewable energy systems such as photovoltaics is the high initial costs associated with them. Even after maximizing available government incentives and rebates as well as taking long-term benefits into account, solar PV systems are still high-cost items for owners.

A new financing structure, known as a power purchase agreement, has emerged over the last few years. Through this agreement owners can purchase power at a fixed price (for a fixed term) from a third-party company that would own, install, maintain, and operate the PV systems on the owner's site or building. This will allow the owners to offset their energy needs by means of a renewable source without having to pay high amounts for installation or maintenance. They would pay a fixed price for that electricity regardless of market fluctuations.

Although still in its early inception stages, this concept will certainly be the frontrunner in the extensive implementation of solar PV systems. Just as there is need for evolution of renewable energy technologies, there is also a need for evolution of the financing structures for these systems. Such financing structures are necessary to make renewable technologies affordable and accessible.

Building Policies/Regulation

Mandatory Green Building

From a policy and regulation perspective, there is little doubt that the push to build green by various local, state, and federal governments is very strong. At present, all federal buildings are required to achieve LEED certification. Similarly, several cities are offering incentives to developers to build green. While all these are steps in the right direction, the bigger goal would be to mandate a certain minimum level of green building requirements through green codes, standards, or other such measures. It is anticipated that minimum-level green requirements will become mandatory in the next few decades.
Performance Data and Green Labeling for Buildings

One important decision that the USGBC made in 2009 was to require building owners to disclose the performance of their LEED buildings as a precondition to achieve certification. The intent was to understand whether LEED buildings that are designed to perform better than other similar buildings, are in fact performing as anticipated.

Similar steps are required at a policy/regulation level as well, where local, state, or federal governments should stipulate that building owners display their energy performance in comparison to other buildings of similar type. Potential buyers or tenants of a property would then be able to base their decisions on the energy performance rating of the building. This would be akin to the Energy Star label typically seen on appliances, which informs users of their expected performance. Similarly, an energy performance label (updated on an annual basis) should be provided for all buildings, so that potential buyers/renters can make informed decisions.

The Energy Star rating program available for buildings at present provides a similar label, but the program is voluntary. Buildings in the United Kingdom are already required to display their energy performance rating. It is likely that there will be a sharp rise in this requirement of displaying building energy performance labels in the coming decade.

Net Metering/Smart Grid

Many European countries such as Germany have been able to push the widespread use of photovoltaic solar systems by owners of commercial buildings and individual homes through the development of smart-grids. Building owners are allowed to sell excess power generated on their site back to the grid. Meters track electricity use both ways -- from grid to building and building to grid. Some states in the United States are currently investing in developing smart grid technologies. Although in a nascent stage, smart grids and net metering are expected to become the norm in the next 20 to 30 years.

CO2 Emissions Tax

The fundamental need for designing green buildings is to reduce their impact on the environment. The increasing use of energy by buildings has led to a depletion of fossil fuel-based resources as well as increased generation of CO2 emissions. There is scientific evidence to prove that these emissions have resulted in global warming that is causing the earth's temperatures to rise at a dramatic pace.

There are proposals for industries and businesses to pay taxes on their CO2 emissions when they exceed a certain predetermined amount. On the flip side, when buildings are able to achieve significant reductions in emissions, they would be able to trade their emission reductions with other high emission-producing industries. The levying of a CO2 tax will become more likely in the next decade as it is essential to bring about a meaningful change from a global warming perspective.