Builders, Venture Capitalists and Governments Embrace Green Building Retrofitting

Green Building Retrofitting: How do you promote green building when building, green or not, has ground to a halt? You take green to the existing building stock. Existing green builders and young green retrofit companies are emerging at a time when national, state and local governments are embracing programs to promote energy efficiency and green retrofitting.

Traditional Home Builders See an Opportunity
At this year’s USGBC GreenBuild I had a chance to sit down with Clark Wilson, President and CEO of Green Builders, Inc. Mr. Wilson started Green Builders after a very successful career in traditional building. He set out to sell green homes to the public but “after the 100th person said they were not interested in buying a home this year (because of the economic downturn), but would be interested in getting their current home retrofitted,” Mr. Wilson decided to start up a retrofitting division. The company’s scientific approach to remodeling starts with an in-home energy audit that evaluates the home’s energy usage and performance. Green Builders then analyzes the data to identify a customized energy and cost-savings action plan that will have the most impact on the home’s energy expenditure and yield the greatest energy savings for the cost.
In his presentation at GreenBuild, Mr. Wilson pointed out how large the retrofit market was in the U.S. He sees this as a real business opportunity. On the first day they launched their new site, Green Builders, Inc. received three deposits from local Austin residents looking to reduce their energy bills and green up their homes.
Opportunity for Green Entrepreneurs
The business model for retrofitting requires the energy savings to offset the increase in mortgage costs. This model is sound enough for at least one energy-audit company to receive venture capital funding. Sustainable Spaces is a licensed general and solar contractor and provides home testing and building performance retrofitting for existing homes to create environments that are comfortable, healthy, and energy efficient. The company has performed more than 400 home retrofits in the San Francisco Bay Area since its founding in 2004. In September, Sustainable Spaces closed its Series A financing, receiving $6 million from RockPort Capital Partners and Shasta Ventures.
Green Retrofitting as Economic Stimulus
Government officials see green retrofitting as a way to create jobs and avoid the need to build new power plants. Obama’s economic stimulus plan will most likely include incentives and grants for retrofitting homes. In Chicago, officials will attempt to retrofit 400,000 city homes with new and improved insulation, tighter windows and doors and Energy Star appliances at a cost of several hundred million dollars. The program aims to make 65,000 homes and apartments 30 percent more energy efficient each year. According to the program managers, the project will reap $269 million per year in deferred energy costs. That money goes directly to consumers’ bottom line.
I think the trends to watch in retrofitting are twofold: government incentives and innovative financing techniques. Government incentives will continue to jumpstart retrofitting. Financing the home improvements may prove very difficult with home equity evaporating across the nation. Sun Edison redefined solar by utilizing the PPA. Can a company emerge with a financing product like an energy services agreement to help consumers avoid initial capital costs?
Green retrofitting is a true triple bottom line proposition: job creation, environmental benefits and profitability

Craig Isakow covered GreenBuild for Triple Pundit and is the founder of the Green Building Materials Directory

3 responses

  1. Sustainable Spaces is an amazing company and is soon to expand to cities outside of SF. LA first most likely. Very exciting stuff. Matt Golden is a true leader in the field.
    Great article Craig. I hope you keep us posted on this thread, especially after Jan20.

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