California’s massive building code revisions, called Title 24, target achieving sea-changing growth in energy efficiency investments by eliminating the conflicted and uncertain economics that currently constrict energy efficiency project financing. Title 24 is a huge bet by California that smart, energy efficient and renewable energy technologies can be grown to economies of scale that will deliver price competitiveness. It is also an unprecedented path for sparking growth in a construction industry still recovering from the Great Recession.
If successful, Title 24 will open the door to increased amounts of energy efficiency financing, expanded sources of capital and lower financing costs. If successful, Title 24 will revolutionize the economics of smart building technologies that will reshape America’s homes and offices to be cleaner, smarter, healthier and less costly to operate.
The real estate industry’s ability to finance energy efficiency investments is caught in a quagmire of conflicted interests linked to triple-net leasing agreements where the benefits of a property owner’s investment in energy efficiency reduces the tenant’s electric bill without generating near-term cash flow to the owner. California’s revised and new Title 24 codes will cut through most of these financing barriers. It will also accelerate the adoption of smart building technologies that will generate the type of big data analytics that is proven to enable energy project financings.
Information technologies that monitor, control and financially operate a building through links to real time prices of grid-supplied electricity are the foundation for enabling Title 24 project financing. Smart ZNE buildings will operate to optimize the economics between reducing building demand, reducing energy consumption, on-site generation, use of on-site energy storage and purchases of grid electricity.
What will further enable the financing of ZNE buildings is the ability of enabling information technologies to “look forward” in time to proactively shape a building’s operation and grid purchases to financially support the building’s project financing. The technologies that can achieve these results have already been invented. What California is pursuing through its Title 24 code revisions is a massive economies of scale push for these technologies to drive their costs down and increase their ability to be financed.
Ted Torre-Bueno is president of Empowered Energy Solutions. He is both a general contractor and a technologist. The following six-minute video interview profiles his strategy for winning bids based upon his smart building technologies that enable his ability to offer both competitive job costs and building performance assurances.
Bill Roth is an economist and the Founder of Earth 2017. He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues. Follow him on Twitter: @earth2017
This article is the second of a three article series that draws from Bill Roth’s coaching program for trade professionals entitled “How To Grow Sales From Title 24 Code Revisions” that was conducted on November 5, 2013 at the San Diego Gas & Electric Energy Innovation Center.
Read the entire series:
Founder of Earth 2017. Author of <a href="http://www.amazon.com/The-Boomer-Generation-Diet-Weight/dp/1517484243">… Boomer Generation Diet: Lose Weight. Have Fun. Live More</a> that Jen Boynton, Editor in Chief of Triple Pundit , says is "Written in Bill Roth's lovable, relatable tone. A must read for any Boomer who is looking to jumpstart their health and have fun at the same time. I hope my parents read it. "