Saving Energy, Jobs, and Money on Main Street


A new report produced by the National Trust’s Preservation Green Lab (PGL) shows that small commercial buildings hold the potential for energy savings and improved profitability worth more than $30 billion annually. The report, "Realizing the Energy Efficiency Potential of Small Buildings," recommends key actions needed to save energy in 7 million business establishments located in 4.4 million buildings across the nation. These buildings make up 95 percent of all commercial structures and represent 47 percent of energy consumption by non-mall commercial buildings.

"The energy savings detailed in the Small Buildings report represents the equivalent of 580,000 permanent new American jobs," says Mark Huppert, Director of Preservation Green Lab. "Harvesting energy efficiency from small buildings is like striking oil, except it's domestic, clean, and keeps dollars in our local economies. The savings will produce real jobs that can't be offshored or outsourced."

These "small buildings are the physical foundation of social and economic life in thousands of communities nationwide,” adds Ric Cochrane, Program Manager, PGL. “They form the collective heritage of cities and towns, they are the drivers of economic development, and they … provide the basis for revitalization efforts.”

It is these smaller, older buildings that typically line most Main Streets, housing independent small businesses that rely on affordable rents and flexible workspaces. Increasingly, they are also being transformed into mixed-use projects that provide downtown housing as well as retail and restaurant space. “Neighborhoods and districts made up of these buildings are rich in history and offer people a common identity and sense of place,” says Cochrane.

The study also identifies the potential savings in the small buildings sector (buildings with an average size of 8,000 square feet). “If small buildings and businesses took advantage of readily available energy-saving improvements," says Cochrane, "they would reduce the overall energy used by commercial buildings by almost 20 percent.”

The impact on small neighborhood businesses such as restaurants, retailers, and grocers would be an increase in profitability of more than 10 percent if they made strategic investments in energy efficiency.

Unfortunately, says Cochrane, “small buildings are regularly overlooked in the energy services market due to the complexity of the building stock, the limited resources of building owners and small businesses, and the small profit margins available … when small buildings are addressed individually.”

The report addresses this challenge, noting, for example, that a business district with many small commercial buildings of similar types offers a high potential for energy savings.  Solutions on a business district or neighborhood scale offer a way to apply energy retrofit strategies across large numbers of buildings. The close relationship between the owners and tenants of small commercial buildings can also be an advantage in developing district-wide strategies.

The Small Buildings report shows that making use of these buildings offers a reliable, immediate path to prosperity that is both equitable and environmentally sound. “This combination of preservation plus sustainability,” says Cochrane, “means we can capitalize on the value of our buildings to create community value.”

Key Research Findings

  • Small buildings are responsible for 47 percent of the energy consumed by commercial buildings overall.
  • Small businesses or firms with fewer than 500 employees own 84 percent (3.7 million of 4.4 million total) of small buildings.
  • Potential energy savings in small buildings range from 27 to 59 percent, depending on the building type. This represents 1.07 quadrillion Btu (i) annually or 17 percent of commercial energy use.
  • Implementation of energy-efficiency measures in small buildings could potentially generate 580,000 permanent jobs in the energy services and construction industries.
  • Small, neighborhood businesses such as restaurants, grocers and retailers can improve profitability by more than 10 percent through smart investments in energy savings.

Key Recommendations

  • Identify Waste and Measure Results: To realize the full energy saving potential of small buildings, energy policy makers must support solutions that measure, motivate, and monetize real energy performance.
  • Plan for Improvement: To optimize energy efficiency in small buildings, investors must align the timing of energy-saving improvements at opportune times in the life cycle of a building, such as during acquisition, tenant improvements, renovations, or replacement of equipment.
  • Encourage Innovative New Business Models: As heating, cooling, and lighting system controls become increasingly digital, new hardware and applications are automating how customers can save energy. Utilities and local energy regulators must collaborate with industry champions on pilot projects, demonstrating how new technologies can more easily and cost effectively reach small businesses in different types of buildings.

The report was produced by the Preservation Green Lab in partnership with the New Buildings Institute, a nonprofit that works collaboratively with commercial building interests to remove barriers to energy efficiency. It was funded jointly by The National Renewable Energy Laboratory and the U.S. Department of Energy.

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Main Report

Executive Summary

Fact Sheet

(i) British thermal unit, used to describe the heat value (energy content) of fuels.