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Sweat the Small Stuff: Building-Scale Renewables and Sustainability

When discussing renewable energy and sustainability goals, large-scale renewable power generation projects often seem to capture the public attention and interest.  Certainly, scaled-up solar, wind, geothermal and biomass projects, along with more comprehensive and efficient transmission networks, are critical for reaping the multitude of economic and environmental benefits of green technology.  However, given the current economic climate and the difficulties many of these capital-intensive projects face in securing financing, we must not overlook, or fail to properly support and promote, the potential significant benefits that can be obtained through smaller scale projects and technologies that focus more on building-scale generation and sustainability.

The EPA estimates that buildings in the United States account for approximately 40 percent of total energy consumption and carbon dioxide emissions, 13 percent of water use and 160 million tons per year of construction and demolition debris.  These are staggering numbers and clearly create a need, and an opportunity, for innovative technologies and practices. 

Technologies already exist, and are being further developed and enhanced, to address these needs and seize these opportunities. 

For example, a recent New York Times article highlighted the experimental concept developed by Envision Solar to design and install “solar trees” in parking lots with the capability to produce about 20 percent more electricity than a fixed panel through the ability to track the peak watts generated by the sun both east to west and north to south.  While some of the other technologies and methods being developed and implemented, such as employing energy efficient HVAC equipment, energy recovery systems to pre-heat or pre-cool in-coming ventilation air, green roofs, solar water heating and microturbines, are not as headline-grabbing as a wind turbine farm located in coastal waters, they too provide significant opportunities for providing meaningful results if implemented on a wide-scale basis. 

Although the initial costs of incorporating these types of green technologies in buildings can be higher than those of traditional construction, the costs are generally outweighed by the life-cycle savings they provide.  For example, studies have shown that the average premium for green buildings is just below two percent (approximately $3 - $5 per square foot – realized typically as a result of architectural and engineering design costs), but the life-cycle savings from increased energy efficiency and reduced electricity consumption average around 20 percent of total construction costs.  In addition, numerous federal and state programs are available to subsidize portions of the increased up-front building costs.

Accordingly, while there is clearly an incentive to incorporate these green technologies into these projects, to fully realize the potential of building-scale generation and sustainability, we must get out of our own way. 

Often, building codes and land use and zoning ordinances of municipalities contain outdated requirements that prohibit or severely restrict the implementation of these technologies.  For example, infill development projects have been on the increase in urban areas in recent years.  These projects by themselves accomplish other sustainability goals in that they typically increase the existing density of underutilized urban centers, which often leads to increased mixed-use development and transit options and the reduction in the need of car trips from place to place and the average distance of trips (in turn, reducing transportation green house gas emissions).    Unfortunately,  the opportunity to further leverage these sustainability benefits with the incorporation of green technologies is often hampered by the existence of various outdated municipal code requirements that limit the physical design and uses of projects in a manner that limit the opportunities to incorporate these technologies.

Fortunately, some municipalities have begun to amend their municipal codes to remove these impediments, and, in some cases, to promote sustainability and the use of green technologies in building projects.  For example, Boston has adopted a green building zoning code to promote less energy-intensive development (through the incorporation of LEED standards for certain projects).  In addition, Chicago amended its zoning code to promote the inclusion of green roofs in building projects.

Additional steps like those taken in Boston, Chicago and other urban areas are necessary on a wider-scale to realize the benefits that can be obtained through the inclusion of green technology in building development.   Through the increased incorporation of building-scale sustainability and renewable energy technology, we can further promote the economic and environmental benefits that are possible by “going green”.  Then, as the large-scale renewable production projects continue to come on-line in future years, we will really be on our way to realizing our economic and environmental goals.

©2020 MICHAEL BEST & FRIEDRICH LLP

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About this Author

matthew c. carlson, partner, real estate law, michael best friedrich, transactional attorney
Partner

Matt is an experienced real estate practitioner who advises clients on a wide array of real estate and development matters. Matt is adept at handling large-scale, politically sensitive development projects, including those involving public-private partnerships. He has extensive experience with structuring complex ownership, leasing, and financing structures for a variety of single and multi-use commercial projects.

A member of the firm’s Transactional group and the Co-chair of the Real Estate sub-group, Matt handles projects throughout the state of Wisconsin, the Midwest, and...

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