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Green Buildings Are Energy Savers

Green Buildings Are Energy Savers

Last week, my partner Andrew posted a blog about the LED market and discussed some emerging technologies that will revolutionize the lighting market. I want to expand on that topic and provide some insight into energy efficient green buildings.

Buildings are huge consumers of energy. The US Department of Energy estimates that, in the US alone, buildings use nearly 40 quadrillion Btu of energy for space heating and cooling, lighting and appliances. This represents approximately 39% of the total energy consumed in the US and 38% of a building’s energy is consumed for heating and cooling. The Building Technology & Urban Systems Department at Berkeley Labs states that buildings consume 71% of US electricity, 53% of US natural gas and emit 40% of US greenhouse gases. There is clearly room for improvement.

Improvements in building envelopes can reduce HVAC cost and save significant energy. Increasing the R-value of insulation and using double or even triple pane windows are relatively inexpensive ways to save on heating cost. I have seen some interesting insulation technology, including aerogels and porous geopolymer material. These innovative materials are targeted at high-end applications with a premium price. For the average person, insulation from a big box store is probably the best bang for the buck.

The more complicated issue and one that may represent better opportunity for venture investments is technology for cooling buildings. Let me start by focusing on windows. The weakest link in any building envelope is the window. While windows are important architectural elements in buildings, they have a high thermal emittance and uncoated glass passes 91% of the sun’s heat into the building. That being said, more, not less glass is becoming the norm. This is great from a user’s perspective but it puts a significant strain on a building cooling system.

The last significant improvement in window coatings was low-e (emission) coatings in the early 1980s. Low-e coatings are static and still allow 80% of the light into a building. The next significant improvement in window technology will be dynamic glass. There are three types of dynamic glass: photochromic (darken with light), electrochromic (darken with electricity) or thermochromic (darken with heat). Most of these films vary the light transmittance of a window from 80% in the “light” state to 20% in the “dark” state. Each type of film has its advantages. Photochromic films darken automatically when the sun hits them so do not need user activation. Thermochromics are similar but depend on the temperature of the glass to activate the dark state. On the other hand, electrochromics give the user more control by applying an electric charge to darken or lighten the window. To date, there are very few buildings with dynamic windows. Looking forward, mass adoption will only occur if the cost is comes down significantly. We feel that the cost of dynamic glass must fall to $20/square foot before mass adoption will occur. If that happens, adopters of this technology can expect HVAC savings of 20-30% and ancillary benefits for users like eliminating blinds. There have also been improvements in air conditioning systems using liquid desiccants and heat pumps using zeolites. Other people will point to building control and diagnostic systems that save energy.

The US energy efficiency market for commercial buildings was $5.6 billion in 2011 and is expected to grow to $20 billion by 2020 (Pike’s Research). Many countries have government incentives ,which encourage energy efficient practices, and the Leed certification program is growing in popularity. The US Green Building Council estimates tenants are prepared to pay a 6.1% premium for Leed certified new construction and 10.2% premium for Leed certified renovated buildings, principally because green buildings have lower operating costs, are healthier, safer and more comfortable to occupants. In summary, I am positive about energy efficient green building technologies and feel that the market will continue to grow at over 20% per year.

General Partner, Pangaea Ventures Ltd. Chris is the founder of Pangaea and has been working with cleantech and advanced material companies since 1997. Chris is a lawyer by training and served as a partner with Osler, Hoskin & Harcourt.View Chris Erickson's profile on LinkedIn


  • Guest
    Insulation Services Donegal Thursday, 06 December 2012

    Chris, What do you think is the first step for business owners who wish to improve ther energy rating ?
    After getting it accesed of course.

  • Chris Erickson
    Chris Erickson Tuesday, 18 December 2012

    It depends on the degree of work on the building. If the apron is being touched, simple things like improving insulation and windows will give the biggest bang for the buck. If the apron is not being touched, replacing old lighting with LEDs and using control systems for heat and lighting with will reduce energy consumption. I also think that educating employees about ways to save energy is simple but often overlooked. Hope that helps.

  • Guest
    Braden Tuesday, 08 January 2013

    Chris - Do you see any areas of improvement in low-e coatings? Or do you forsee chromatic films surpassing low-e all together? Thanks

  • Chris Erickson
    Chris Erickson Monday, 21 January 2013

    Hi Braden - low-e coatings have been around since the 80s or earlier and are now in most windows. I don't believe there is a lot of new improvements being worked on. My understanding is that the glass companies are more interested in dynamic / smart windows to drive future innovation and growth. Chris

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