Growth markets: Big money in green makeovers

Written by Eleanor Beaton

Among the long list of opportunities engendered by the strengthening push to a greener economy, building retrofits are a hot spot.

Ron Dembo, CEO of Zerofootprint Inc., a Toronto-based developer of carbon-emission measurement and management software, says the construction and operation of buildings generates 40% of North America’s carbon emissions. In big cities, the numbers are far higher: 63% in Toronto and 79% in New York.

“We won’t solve the greenhouse-gas problem if we don’t deal with our buildings,” says Dembo. Poor insulation, archaic heating and cooling systems, and inefficient lighting have rendered many buildings energy hogs. Green retrofits that make buildings more efficient — such as installing energy-saving lighting, reinsulating walls and “reskinning” buildings with new exteriors — are the best way to deal with the carbon problem, says Dembo.

The value of such retrofits is set to explode, driven by ballooning energy costs and huge new government incentive programs. McGraw-Hill Construction, a New York-based market research firm, forecasted in October that green upgrades will account for 30% of all U.S. renovation projects by 2014 — six times their 2009 share. This would boost the market to US$15 billion in 2014.

What’s more, because the eco-friendly building sector is a “prolific source of green jobs,” Canada is likely to see growing government support and investment in this sector, says Toby Heaps, editor-in-chief of Corporate Knights, a magazine focused on corporate social responsibility and sustainability. In February, U.S. President Barack Obama’s American Economic Recovery Act gave green retrofits a massive boost by earmarking US$25 billion in stimulus money for them.

Michele Russo, director of green research for McGraw-Hill, says there are still major gaps to fill as demand for retrofits grows, such as consultants who can liaise between owners and project teams on eco-friendly renovations. And, she says, property owners and developers are demanding staff-training programs or maintenance services to keep retrofitted boilers, air conditioners and other newly installed green equipment shipshape.

Because an estimated 40% of a building’s energy consumption comes from lighting, products and services that reduce power usage for lighting are another opportunity. These include selling, distributing or installing “smart” lighting fixtures and blind controls — or even a service to “remind” office workers and building superintendents to cut the lights during prime daylight hours.

Retrofits will create other spinoffs, says Kim Carlson, author of Green Your Work. People who invest in green retrofits for their home might be interested in eco-friendly landscaping services. And property managers who have shelled out for a green makeover could prove eager to do business with eco-friendly office cleaners.

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