Operating a building is costly – whether it’s a condo tower, apartments, a co-op, or a townhouse complex. Energy costs – electricity, natural gas, and water – are the largest variable expense building operators can influence. A growing number of building owners and operators opt for energy efficiency retrofits to reduce energy costs, but there’s more to the story.
When we take a broader look, we recognize a host of reasons to complete an energy retrofit of any property. The benefits fall into three main categories[1] :
- Energy-related savings
- Other savings
- Non-financial gains
Energy-related savings: Less natural gas, electricity, and water usage
Comprehensive energy efficiency retrofits can reduce your building’s energy costs by 20 to 30 per cent with off-the-shelf solutions such as lighting upgrades, condensing boilers, and heat pumps. Through improved energy efficiency, you burn less natural gas and use less electricity. Low-flow appliances will also reduce your building’s water consumption. Improving the building envelope (including walls and windows) can also greatly reduce your energy consumption, e.g. through weatherization, re-sealing or replacing leaky windows.
Other savings: Reduced maintenance and equipment replacement costs
In addition to saving on heating and cooling costs, building envelope upgrades can reduce and even eliminate repairs to windows and other building envelope components. Replacing leaky windows not only makes a building more resilient in our changing climate, it’s also a preventive measure to reduce the cost of interior water damage.
The same goes for the proactive and planned replacement of other aging equipment such as boilers. Energy retrofits reduce maintenance costs and staff time managing repairs, while also significantly reducing the likelihood and cost of inconvenient emergency replacements.
Some of the financial impacts of energy retrofits are hard to quantify, but should be considered as well. Case in point: When staff can spend less time dealing with maintenance issues or responding to tenant needs, time can be redirected to other efforts, e.g. marketing and tenant recruitment.
Non-financial benefits: From comfort to curb appeal
Energy retrofits aren’t just good for your building’s bottom line; they also deliver non-financial benefits such as improved resident comfort, indoor air quality, and pride of ownership.
- Installing a control system where certain hotter areas can be cooled and cooler areas can be heated will make a building more comfortable. Such comfort increases can result in reduced tenant complaints and turnover.
- Cleaning ducts and changing filters may not be fancy or worthy of cutting ribbons, but can make the air more breathable and protect against mould and the transfer of germs.
- When new insulating cladding or triple-paned windows are installed they can add to the thermal comfort of the tenants and at the same time update the look of the building, provide more ‘curb appeal’ and even pride of ownership.
Last but not least, energy retrofits are good for our climate as they reduce harmful carbon emissions. This is an important benefit considering that buildings are the main source of carbon emissions in the Greater Toronto and Hamilton Area (GTHA),
Conclusion
An energy retrofit, especially a well-designed comprehensive energy retrofit, is a good financial investment. TAF has years of first-hand experience: Retrofit projects that we finance routinely deliver net present values of double the original cost. Depending on the building type, successful retrofits can translate to:
- Improved net operating income for apartment buildings;
- Protected and even increased market value for condo buildings (and to a lesser degree co-ops);
- Reduced maintenance costs, freeing up money for investments in shared facilities and other buildings aspects (all building types).
While not always top of mind, energy retrofits can provide wide range of benefits – financial and non-financial for multi-residential building owners and operators. Let us know if you want to learn more.
[1] With thanks to Mark Jewell of Selling Energy Efficiency for crystallizing and confirming our thinking and approach.
