Commercial Building Retrofits Could Surpass $1.8 B in US by 2014

The retro-commissioning
market in the United States could grow from about $160 million in 2010
to more than $1.8 billion by 2014, under an aggressive forecast
scenario, according to a recent report from Pike Research. A more conservative baseline forecast scenario still calls for
robust growth in the retro-commissioning market, with revenue reaching
$759 million by 2014.

Several substantial, durable drivers are expanding the potential market for energy efficiency retrofits in commercial buildings, which can provide energy savings ranging from 10% to more than 50%. In addition to cost savings, energy retrofits are attractive for purposes of greenhouse gas (GHG) reductions, energy independence, green branding, property valuation, and productivity.

A key growing segment of the larger retrofit industry is the market for retro-commissioning projects, which provide savings of 10% to 20% with an average payback of slightly over one year.

"Retro-commissioning projects are low-risk investment opportunities with average cash-on-cash return on investment of over 90%," says industry analyst Levin Nock. "As the commissioning industry matures from fewer than 2,000 commissioners at present to more than 20,000, it will probably consolidate around successful marketing and sales strategies. When mature, we believe that the annual revenue opportunity for retro-commissioning will be approximately $4 billion."

Nock adds that almost all buildings would benefit from retro-commissioning. However, in recent construction built within the past 10 years, the ROI is lower–about 40%, compared to 90% for older buildings. Pike Research’s analysis indicates that typical retro-commissioning projects will cost less than $1.00 per square foot.

A summary of the report, "Energy Efficiency Retrofits for Commercial and Public Buildings," is available at the link below.

Johnson Controls (NYSE: JCI) recently announced that retrofit projects it is performing for the US federal government are guaranteed to save more than $4.7 billion over the next 10 years. 

According to new figures, in 2010 more than 6,200 commercial buildings earned the Energy Star label for superior energy efficiency–an increase of nearly 60% over 2009. 

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