Six retrofitting trends to watch for in 2015

Commercial buildings with a high NABERS rating deliver 10.5% more investment returns compared to buildings with a low NABERS rating, according to The Property Council. With benefits like that, it is important to keep abreast of changes in the fast-moving retrofitting industry. Here are some trends we can expect to see in 2015.

Lighting

In 2013, 83% of all retrofits in Melbourne were lighting upgrades, according to the Melbourne Retrofit Survey. This was bolstered by the Victorian government’s Energy Saver Incentive program that offers rebates to commercial buildings that retrofit their premises with energy-efficient lighting.

Taking a ‘whole house’ approach

Perhaps energy-efficient lighting is the low-hanging fruit of retrofits. Could it be businesses go for low-cost solutions, such as lighting, and avoid implementing extensive retrofitting solutions? ClimateWorks is concerned that building owners will think improving lighting means that they don’t need to take a ‘whole house’ approach with integrated solutions. However, there are other extensive retrofit measures - such as HVAC, cogeneration and ventilation - that individually have much longer payback periods.

According to the report, outstanding green buildings with high NABERS and Green Star ratings combine a bundle of energy-efficient retrofits with both short- and long-term payback scenarios. This means it’s more commercially viable and energy efficient to install a mix of short- and long-term measures, like energy-efficient lighting and CHP plants.

Cogeneration

Cogeneration is a big growth area, which coincides with the simultaneous decline in the number of boiler upgrades. CHP installations were up to 5% in 2013 from 1% in 2011. Yet it seems that the long-term benefits outweigh any investment concerns. The analysts forecast the global cogeneration equipment market to grow at a CAGR of 9.4% over the period 2012-2016, according to Research and Markets.

Green financing

As at 30 June 2014, the CEFC had contracted investments in over $900 million in projects with a total value of over $3 billion. Since the federal election, the Abbott government has introduced legislation three times to effect abolition of the CEFC. Abolition legislation has twice failed to pass the Senate. CEFC is an essential part of the industry that ensures a strong pipeline of investment proposals for projects across Australia.

“We’re providing a range of financing options and financing programs tailored to suit commercial property needs,” said the CEFC’s CEO Oliver Yates, “whether you’re looking to improve the energy productivity of your building as part of a broader upgrade or looking to benefit from the energy cost savings through solar power.”

Key drivers for retrofits

Around 39% of building owners invest in energy-efficient retrofits because an asset is worn out or faulty. The remaining 31% of building owners adopted retrofits to improve the energy efficiency of the facility. Surprisingly, however, the attraction of new tenants and retention of existing tenants were the key drivers for installation only 21% and 12% of the time, respectively. There is a misconception that applying for funding is a lengthy process. Plus the financial and environmental outcomes for retrofitting buildings is overwhelming. In 2015, let’s all say cheers to a new year where the industry finally grapples with the slow-moving beast called retrofitting. 

Competition

Just like in the sporting arena, Sydney and Melbourne have burgeoning green building and retrofitting industries that are in healthy competition with each other. The NSW government has focused its efforts on the Energy Savings Scheme (ESS) while the Victorian government focused on its well-designed Smarter Resources, Smarter Business program. Policy-making will always be in a state of flux and change. Hopefully, 2015 will be the year when the policy unequivocally shifts towards encouraging investment and employment in the green retrofitting sector. This will mean huge opportunities for energy auditors, technicians, engineers and energy reclaim specialists