Efficient building stock: luxury or necessity?

We hear all the time that one of the major barriers to an efficient building stock is the up-front investment cost and that the way to overcome this barrier is to provide incentives.

I don’t know about you, but I always have a hard time reconciling with the use of incentives to deliver what I think should be business as usual: low energy buildings.

I worry about explaining to the next generation that although we knew buildings had to be low energy, and how to achieve this, we collectively failed to deliver and resorted to incentives to drive what we should have delivered in the first place.

Sounds a bit odd, no?

It’s basically like telling your children not to cross the street when the light is red, but they disobey, and you encourage them with incentives to respect the red light. I’m pretty sure that’s not the best way.

But this tends to be the way low energy buildings are currently being pursued. All IEA member countries are offering financial and/or fiscal incentives, and at the IEA we’ve been looking at how successful these incentives are in delivering energy efficient buildings.

Surprisingly most countries do not evaluate the impact of their incentive schemes in terms of energy savings and carbon emissions reduction. One reason for that could be the fact that energy requirements considered for incentive scheme are not easy to measure: two-third of existing incentive programmes fund projects with non-measurable savings (see graph). Projects are for example funded if the building is performing X% better than from building energy codes. It’s a good practice to link incentive programmes to building energy codes as they represent the backbone buildings energy efficiency policies. However, as in most countries building energy codes are either model-based with relative energy targets or prescriptive codes with energy requirements on individual components and systems. It’s impossible to measure how much savings we get by going beyond the building energy code. In reality, only countries that have already implemented overall performance-based building energy code could know how much savings could be obtained by going beyond the code.

Furthermore, where energy savings are measurable, we’ve found that the maximum EE requirement is a 30% improvement solely based on regulations. This is essentially the efficiency level that new technologies are being produced at. So governments are using incentives to encourage what the market is already delivering, suggesting efficiency is a luxury that needs to be subsidised, rather than a necessity that needs to be implemented. Even worse, incentive schemes with low efficiency ambitions encourage the uptake of the easiest options, locking in savings potential instead of driving innovation.

From my perspective efficient buildings need to be recognised as a basic standard in the way that indoor sanitation became over the course in the 20th century. Then we won’t need incentives targeting individual measures. Instead we need a market framework to make low building stock the business as usual and we can confidently pursue long-term strategies which are based on understanding efficiency as a social good.

It’s time for a paradigm shift. Let’s do it in 2013.

This post was published for the first time on December 6, 2012 on the IEA sustainable building centre web site, www.iea.org