When it comes to educating customers about the value of energy efficiency in buildings, building owners are not the only group utilities need to keep in mind. Real estate appraisers in your territory may well need a crash course in the benefits of high-performance buildings, too. The Energy Department (DOE) and the Appraisal Foundation are working on resources to help the real estate industry figure out what sustainability is worth.
“Green” features can lower a building’s operating cost and make it a less financially risky investment, as shown in a case study by the Institute for Market Transformation. A commercial building in Wilmington, North Carolina, that implemented energy conservation measures reduced its annual energy costs by nearly $11,000, increasing the building’s valuation by up to $275,000. The study also showed that installing a renewable system has a similar effect. Buildings in California with solar panels can be valued at a premium as high as $5,911 per kilowatt of energy capacity.
Yet building owners often worry—with reason—that they will not recoup their investment in energy-efficiency upgrades when it comes time to resell the building. If appraisers are not educated about green strategies, they might overlook some of the benefits that could make the building more marketable, such as reduced operational and environmental risks. And that adds just one more barrier to getting customers to implement such measures.
To address this concern, DOE has teamed up with the Appraisal Foundation to improve resources for appraisers who are involved with energy-efficient buildings. The first of these resources, the Appraisal Practices Board (APB) Valuation Advisory #6: Valuation of Green Buildings: Background and Core Competency, is available to download. Technical experts and industry leaders collaborated on the APB Valuation Advisory to give appraisers a basic educational background on green or high-performance buildings. Two upcoming resources will build on this guide’s foundation with methodological guidance for valuing residential and commercial buildings.
DOE supported this work by providing subject matter experts and soliciting feedback from members of the Better Buildings Alliance. Appraisers can also find software tools, databases and education courses on the website that they can use to better evaluate green buildings.
Key account representatives should consider sharing the APM Valuation Advisory with local realtors’ associations. Municipal utilities in particular are in the position to bring these new resources to the attention of the appropriate city departments. Utilities might understandably see market transformation of the real estate industry as outside of their scope. On the other hand, it could be an opportunity to create new allies who can make the business case for energy-efficiency improvements for you.
Source: DOE Office of Energy Efficiency and Renewable Energy via Green Power News, 7/23/15