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Green Performance Contracting
Posted by johnsoncontrols on June 5, 2007 05:59 PM
From Arizona state buildings to businesses in Michigan, performance contracting is being used to pay for capital projects that improve building performance. It’s usually considered for energy or water projects. Now it’s time to use “green” performance contracting to pay for a comprehensive approach to making buildings more sustainable.
Performance contracting removes a major barrier for public and private entities, which face ever-tightening budgets, to make necessary upgrades to their facilities. Depending on local regulations and laws regarding performance contracting, the traditional tools for implementing energy efficiency improvements can be expanded to address overall building and site sustainability.
Employing integrated design – a central element of green building philosophy – allows high benefits at low cost by achieving synergies between disciplines and technologies. The project development process requires some balancing of choices to produce an overall payback period that meets the building owner’s requirements. Performance contracting is highly effective because energy savings only need to pay for the incremental cost of higher-efficiency measures rather than for the whole cost. And green performance contracting is even better for overcoming any first-cost barriers for sustainable improvements.
Green performance contracting can be used to achieve sustainability goals in new building design and construction and in existing buildings.
• New Buildings: Higher-efficiency choices are compared to the modeled performance of the as-designed less-efficient building. Applying performance contracting to buildings being designed and built is the perfect cure for pressure to “value engineer” the efficiency and sustainability out of new buildings as they are designed. In new buildings, performance contracting bridges the gap between the first-cost and life-cycle-cost perspectives by using long-term energy savings to pay for the incremental first-cost of high-efficiency measures.
• Existing buildings: Green performance contracting provides a mechanism for implementing and financing the building’s efficiency and sustainability upgrades, including improved operations. Achieving sustainable building performance in existing buildings can be done at reasonable costs. If needed, system or building upgrades can be spread out over time and implemented when capital dollars become available.
Green performance contracting provides comprehensive integrated solutions to a wide variety of building, site and infrastructure improvements, and it allows building owners to pay for these building sustainability improvements, including capital improvements or renewable energy, with funds in the organization’s expense budget.
Michael Arny is president of the Leonardo Academy, which promotes environmental improvement and sustainability. A series of white papers on green performance contracting is available on the Leonardo Academy’s web site. “The Users’ Guide to Green Performance Contracting” explains how public and private sector building owners can use green performance contracting to implement sustainability in their buildings. Three supporting white papers outline specific areas in detail. All of these white papers are available at: www.leaonrdoacademy.org
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