City of Greensboro Better Buildings Project: Market Assessment

City of Greensboro
Better Buildings Project:
Market Assessment
JULY 2011
Prepared by the Environmental Finance Center for the City of Greensboro, NC
AUTHORS:
CHRISTINE E. BOYLE
MICHAEL CHASNOW
CASEY J. WICHMAN
ABOUT THE ENVIRONMENTAL FINANCE CENTER AT THE UNIVERSITY OF NORTH CAROLINA,
CHAPEL HILL
The Environmental Finance Center is part of a network of university-based centers that
work on environmental issues, including water resources, solid waste management,
energy, and land conservation. The EFC at UNC partners with organizations across the
United States to assist communities, provide training and policy analysis services, and
disseminate tools and research on a variety of environmental finance and policy topics.
The EFC at UNC is dedicated to enhancing the ability of governments to provide
environmental programs and services in fair, effective, and financially sustainable ways.
ACKNOWLEDGEMENTS
This report was a collaborative effort within EFC and with several supporting
organizations. We extend special appreciation to Carrie Weiner, Jon Breece, and Jeff
Hughes for mapmaking and editorial contributions. Robert Powell and his students at NC
A&T’s Center for Energy Research and Technology (CERT) contributed with survey and
data gathering. This analysis would not be possible without the data and energy resources
of the City of Greensboro’s GIS Department and Executive Department.
This report is a product of the Environmental Finance Center at the University of North
Carolina, Chapel Hill. Findings, interpretations, and conclusions included in this report are
those of the authors and do not necessarily reflect the views of EFC funders, University of
North Carolina, the School of Government, or those who provided review.
We are grateful to the Environmental Protection Agency for supporting and guiding the
work of our Region IV offices.
© 2011 ENVIRONMENTAL FINANCE CENTER AT THE UNIVERSITY OF NORTH CAROLINA, CHAPEL HILL
Environmental Finance Center, School of Government
Knapp-Sanders Building, CB# 3330
University of North Carolina at Chapel Hill
Chapel Hill, NC 27599-3330
Web: www.efc.unc.edu
All rights reserved
2
EXECUTIVE SUMMARY
The purpose of this Market Assessment is to help focus the Greensboro Better Buildings Program
(the Program) rollout in areas and sectors that have potential high demand for residential,
industrial and commercial efficiency upgrades; the ultimate goal is to provide the maximum benefit
to Greensboro citizens. The Program aims to provide grants and other financing options for
energy-efficiency improvements for as many as 2,037 buildings by leveraging several Department
of Energy grants, including a $5 million Energy-efficiency and Conservation Block Grant. To
identify areas of the city and building clusters with particularly high demand for energy-efficiency
upgrades, the UNC Environmental Finance Center created a set of metrics to identify key subsectors, as a means of guiding the program structure and rollout.
Key findings from the analysis:
Residents’ ability to afford the full cost of energy upgrades will be a challenge in East
Greensboro, but increasing weatherization and energy-efficiency grant programs can bring
down household energy bills and should be supported.
Small grants and weatherization assistance programs in middle- and lower-income neighborhoods
are a viable option for decreasing the energy bill burden for these households. Median incomes in
several zip codes (27214, 27401, 27403, 27405, 27406, 27407, 27409) fall below North Carolina’s
Weatherization Assistance Program threshold (equal to or below 200% of the poverty line ), but
more programs are needed to provide viable financing options to medium income homeowners
whose homes could be made more energy-efficient with Basic Efficiency Packages.
Focus industrial loan program on the printing and publishing cluster.
More than 170 establishments in Greensboro operate within the printing and publishing sector,
including dozens with high energy intensity and high average annual energy costs. Serving this key
sector through the Better Buildings Program could increase program participation and also assist
the printing industry that helps drive Greensboro’s economy.
Marketing efforts directed towards commercial businesses need to make the business case
for investments in energy-efficiency.
Sell energy-efficiency improvements by showing property owners the reduced energy costs that
results from efficient buildings and processes. Selling points for efficiency upgrades include:
reputational advantage in the “green” market, higher tenant retention, and improved productivity.
Office space, strip malls and nursing homes have high potential for cost savings through
energy-efficiency upgrades
These three sectors have been identified as prime targets for energy-efficiency upgrades based on
the large share of building stock these sectors occupy as well as their high annual energy
expenditures. Low-cost efficiency upgrades that are specific to office space, strip malls, and nursing
homes include new lighting technologies, thermal envelope upgrades, and updated heating-cooling
systems.
Four Greensboro zip code areas provide opportunities for substantial energy savings that
can be supported through loans rather than direct grants; they will be candidates for
neighborhood-based residential loan program rollout.
The zip codes 27410, 27408, 27407 and 27406 each have over 2,000 high-demand residential units,
and taken together, total nearly 15,000 units with high demand for Medium and Deep Upgrade
packages. Accordingly, the Better Buildings Program could focus its marketing and program rollout
in these adjoining areas of the city; this could increase positive spillover of program aims to gain
homeowner participation.
3
INTRODUCTION
The proposed Better Buildings Energy-efficiency Program for the City of Greensboro is a municipal
energy-efficiency program designed to create green collar jobs while allowing the City to promote
sustainable and verifiable energy savings to households and commercial and institutional entities.
Assessing the market for energy-efficiency upgrades prior to launching the program helps
administrators identify sub-sectors and geographies with high potential demand for energyefficiency upgrade financing and rebate packages. This Market Assessment will help guide the
ultimate structuring of the Better Buildings Energy-efficiency Program and will be used as a sales
management tool for a targeted marketing campaign.
This Market Assessment first measures structural and financial characteristics that influence
demand for cost-effective energy-efficiency solutions. It then details the energy-efficiency upgrade
project potential for each sector. By identifying particular property types and sub-sectors with
demonstrated demand for energy-efficiency solutions, the Market Assessment provides a starting
point for efforts to market the plan to specific geographies and sub-sectors within Greensboro.
As Table 1 (below) illustrates, Greensboro has high concentrations of residential, commercial and
industrial buildings. Sector-specific market assessments can be found on the following pages:
RESIDENTIAL MARKET ASSESSMENT............................................................................................................. 5
INDUSTRIAL MARKET ASSESSMENT ............................................................................................................ 14
COMMERCIAL MARKET ASSESSMENT......................................................................................................... 18
TABLE 1: BREAKDOWN OF CITY-WIDE RESIDENTIAL AND NON-RESIDENTIAL PARCELS BY ZIP CODE
City area
Number of residential
parcels
single family
other
residential residential
Northeast
East
Southeast
Southwest
Central
Northwest
West
Total
6,239
15,695
8,881
8,207
12,855
11,992
639
64,508
1,385
1,984
1,147
2,283
1,614
4,203
1,876
14,492
Number of commercial parcels
office
space
21
499
101
223
278
127
204
1,453
strip
malls
11
72
35
80
70
69
27
364
Number of
Total
industrial
parcels
parcels
nursing
other
all
homes commercial industrial
5
25
25
10
1
4
2
72
45
759
335
441
519
126
215
2,440
21
575
555
316
260
72
543
2,342
7,727
19,609
11,079
11,560
15,597
16,593
3,506
85,671
Da ta s ource: Gui l ford County GIS Depa rtment (2010) Parcel-level data for City of Greensboro.
Corres pondi ng zi p codes : NE (27214,27455); Ea s t (27301, 27401, 27405); SE (27406); SW (27482, 27407); Centra l (27408,
27403); NW (27410); Wes t (27409).
4
RESIDENTIAL MARKET ASSESSMENT
Overview
The City of Greensboro’s diverse housing stock has many characteristics that influence how energyefficiency improvement programs should be targeted. A typical residential property in Greensboro
is a bungalow-style home, built in 1971. This home has 1,804 square feet and an assessed value of
$164,035. The typical residence has central air conditioning (AC), uses a furnace air-duct system
for heating, and employs natural gas as its fuel source. This household spends $1,407 per year on
energy bills ($117 per month), a figure that represents from 4% to 26% of median household
income for different City neighborhoods1.
Based on such characteristics, this section presents a Traffic Light Demand Rating System that can
identify the potential market for energy-efficiency loan financing as well as other types of
assistance (grants and rebates). This ranking system is based on parcel-level structural data
provided by Guilford County and also includes analysis of Greensboro’s demographic
characteristics. We assess Greensboro’s potential market for different types of residential energyefficiency upgrade projects. First, we identify households qualified for Medium and Deep Upgrade
packages2; these are the “high-demand” households discussed in the following pages. Second, the
analysis identifies households that are attractive candidates for a Basic Energy-efficiency package;
these are referred to as the “medium-demand” households.
1
2
5
Figures based on calculation from the FY 2010 Guilford County Parcel Level data.
Household energy audits will confirm the specific energy-efficiency potential per home.
TABLE 2 RESIDENTIAL HOUSING AND ENERGY PROFILE
Residential Housing and Energy Profile
City of Greensboro
a
Fiscal Year 2009-10
Note: Includes only Zip codes with greater than 500 residential parcels.
"ZIP CODE" DEMOGRAPHICS (CENSUS 2000 ZCTAs)
Zip
Code
27214
27301
27401
27403
27405
27406
27407
27408
27409
27410
27455
% of the Zip
% Families
Median HHLD
Code's
Below Poverty
Income
Housing that
Line
Rented
$
43,281
5%
13.7%
$
46,585
6%
14.1%
$
26,271
17%
61.7%
$
36,427
6%
47.0%
$
31,791
12%
49.0%
$
37,903
10%
34.6%
$
43,710
7%
45.9%
$
53,848
3%
23.1%
$
40,483
8%
52.0%
$
60,353
2%
33.9%
$
54,101
4%
33.0%
RESIDENTIALb HOUSING CHARACTERISTICS
Average
Assessed
Housing Value
130,292
155,442
93,416
139,931
98,648
92,631
137,061
260,955
208,196
236,388
248,759
Number of
Residential
Parcels
760
569
4,477
6,122
10,649
8,881
7,787
6,433
639
11,992
5,479
Average
Housing Area Average Build
Year
(Heated
Square Feet)
1,861
1999
2,238
2004
1,310
1960
1,611
1948
1,355
1970
1,391
1970
1,587
1972
2,185
1959
1,874
1973
2,456
1981
2,303
1988
RESIDENTIAL HOUSING ENERGY CHARACTERISTICS
FUEL SOURCE
HEATING-COOLING SYSTEM
Zip
Code
27214
27301
27401
27403
27405
27406
27407
27408
27409
27410
27455
% Using
% using gas as % Using Oil as
Electricity as
primary fuel Primary Fuel
Primary Fuel
38.2%
58.4%
3.4%
43.9%
55.6%
0.5%
23.6%
56.8%
19.6%
14.2%
62.9%
22.9%
28.1%
55.6%
16.3%
22.9%
64.0%
13.1%
29.8%
57.6%
12.6%
13.3%
69.8%
16.9%
55.3%
35.4%
9.4%
21.2%
72.9%
5.9%
18.3%
79.2%
2.5%
% Forced-duct % Forced - No
% Heat Pump
(Furnace) Duct (Furnace)
63.7%
55.9%
65.4%
74.1%
69.1%
76.0%
75.6%
85.2%
67.6%
81.3%
84.8%
0.26%
0.00%
7.01%
5.03%
2.93%
2.16%
2.50%
0.53%
0.94%
0.29%
0.38%
% Otherc
34.2%
43.6%
13.2%
5.3%
17.0%
10.7%
12.6%
6.4%
24.3%
15.5%
13.4%
1.8%
0.5%
14.5%
15.5%
10.9%
11.2%
9.2%
7.8%
7.2%
2.9%
1.4%
External sources: Census Bureau, 2006 American Community Survey & 2000 Decennial Census; FY 2010 Property data for Guilford County.
a
Analysis includes parcels located within Greensboro City limits; b Residential property is defined as parcels with use code equal to 0100 - 0140
(n=64,623); c other heat/cooling systems: electricity radiant, solar, and baseboard heat.
6
METHODOLOGY
Overview of the Traffic Light Demand Rating System
To identify concentrations of home owners with high demand for energy-efficiency upgrades, we
created a set of demand indicators based on existing research from the Home Energy Saver
program.
Measures of Demand
The Traffic Light Demand Rating System uses four (4) housing characteristics, detailed below in the
Determinants of Demand section, that have been identified as influencing a household’s demand for
energy-efficiency retrofits. For each of these housing characteristics, we estimate the potential
demand for energy-efficiency retrofits according to two measures:3

The first measure of demand is the energy-efficiency/energy expenditure that applies to each
housing characteristic. For example, although a home with more square footage is more
efficient per square foot than a smaller home, it has larger overall energy expenditures and
a higher demand for energy upgrades. Annual energy expenditures provide a basis for a
cost-benefit calculation to discover the break-even point, where potential energy-utility
savings exceed the total loan amount.

The second measure of demand is the home’s energy retrofit upgrade project potential. This
measure takes into account project potential that is specific to the housing characteristics.
For example, homes using electricity heat pumps are already more energy-efficient than
homes using gas-powered furnaces, and since the heat-pump home is already quite
efficient, the home using a furnace may possess more energy-efficiency upgrade potential.
Each residential parcel is assigned points for either energy-efficiency or retrofit project upgrade
potential, as appropriate for each housing characteristic. Using our Traffic Light Energy Retrofit
Demand Index, the final step is locating geographic concentrations of high-demand customers
within the City of Greensboro (see map on page 10).
Traffic Light Demand: Point System
Each of the four housing characteristics have specific thresholds that contribute to a home’s energyefficiency, or retrofit upgrade potential, with a total maximum score maximum of 12 points [4
measures * 3 points = 12]. Specific points are allotted to each characteristic:
RED: Low Demand: Worth 1 Point
There is very little potential for dollar and energy savings.
YELLOW: Medium Demand: Worth 2 Points
There is potential for dollar and energy savings, but specific
retrofits would not increase energy-efficiency as significantly as
in High-Demand homes, meaning energy bill savings for retrofits
would be relatively low.
GREEN: High Demand: Worth 3 Points
A home with this characteristic possesses high potential savings
from energy-efficiency improvements.
3
These rankings are created using Department of Energy Home Energy Saver calculator and Heating Fuel Comparison
calculator: Citation: US Department of Energy (2010) Home Energy Saver Calculator, Environmental Energy Technologies
Division, Lawrence Berkeley National Laboratory; US Energy Information Administration
(www.eia.doe.gov/neic/experts/heatcalc.xls)
7
DETERMINANTS OF RESIDENTIAL DEMAND
Housing Stock Determinants
A household’s energy-efficiency depends upon specific characteristics of the building. Its age and
condition suggest a potential need for the retrofits and rehabilitation work that could be enabled
through a municipal financing program. In the City of Greensboro, 97 percent of the stock was built
before 2007 with roughly 55 percent built before 1975. Therefore the majority of the building stock
was built before residential energy-efficiency requirements were in place4.
The breakdown of building types within a jurisdiction helps a city determine likely demand for
upgrades that could be addressed by a municipal energy-finance program. (A separate determinant
of whether households would be able to pay back loans for energy-efficiency projects is discussed
in the Financial Determinants section.)
In the charts below, zip codes with more green area are those with concentrations of high-demand
households.
Year of Construction5:
The year a property is built is one key determinant of potential energy and cost savings. Newer
homes, especially those built within the last decade, are more likely to have energy-efficient
appliances, while very old buildings, such as those built before 1940, are likely to have less upgrade
opportunities.
number of parcels
Build year for residential housing in the
City of Greensboro, per zip code
4
15,000
10,000
5,000
0
before 1940
1940 to 1949
1950 to 1979
1980 to 1989
1990 to 2000
after 2000
In September 2005, the NC Building Code Council adopted the 2003 IECC with NC amendments effective July 1, 2006. The
amendments include adoption of ASHRAE 90.1-2004. Chapter 11 of the 2003 IRC has also been adopted and includes NC
amendments; the effective date for the Residential Code was July 1, 2007.
5
Energy-efficiency reference for ‘Year of Construction’ is Energy Information Administration (2005) Office of Energy Markets
and End Use, Forms EIA-457 A-G of the “2005 Residential Energy Consumption Survey”.
8
Primary Energy Source for Heating:
The type of energy source used for heating homes is another key determinant. According to U.S.
Green Building Council (USGBC) research, homes that are heated by natural gas have the highest
potential for savings from energy-efficiency improvements, followed by those using oil and electric
heat.
Fuel source for residential parcels in the
City of Greensboro, per zip code
number of parcels
15,000
10,000
5,000
0
Electricity
Gas
Oil
Housing Floor Space (Area)6:
The size of a home also influences its potential for energy and cost savings. Larger homes are
generally more attractive for many types of retrofits (e.g., air and duct sealing), due to the increased
energy savings for the entire footprint of the home. However, houses that are very large, such as
4000+ square feet, may begin to lose some of the benefits from retrofit improvements due to the
design of large-property systems. For example, a 4,000-square-foot home may have one heat pump
for the basement and first floor, and another heat pump for the second and third floors. Therefore,
paying to replace these two heat pumps with more energy-efficient ones would not provide the
same savings opportunity as replacing one inefficient heat pump that serves an entire 2,000-2,500square-foot home.
number of parcels
Residential floor space in the
City of Greensboro, per zip code
6
9
ibid
15,000
10,000
5,000
0
more than 4000 sq ft
3000 to 3999 sq ft
1000 to 1999 sq ft
less than 1000 sq ft
2000 to 2999 sq ft
Heating System Type:
The type of heating system in a building also influences the potential for energy and cost savings
from retrofits. At the extreme, a home without any type of heating system obviously has very little
potential for energy and cost savings. Meanwhile, USGBC research demonstrates that new heat
pumps are significantly more energy-efficient than older heat pumps. Since most existing heat
pumps are older and generally have not been replaced, homes with heat pumps are likely to
possess relatively high potential for energy and cost savings. Another basic retrofit is air-duct
sealing. EPA reports that up to 20% of the air that moves through a duct system is lost due to leaks,
holes, and poor connections.
number of parcels
Residential heat types in the
City of Greensboro, per zip code
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
heat pump
forced-duct (furnace)
forced-no duct
other
Note: other heating and cooling system types include solar, baseboard heat, steam, and electric-radiant.
BRINGING IT ALL TOGETHER IN THE MAP: The next step in the residential demand analysis is to
add up points per parcel and assign each parcel a ‘traffic-light ranking.’ The map on the next page
illustrates the number of high demand ‘green’ parcels per zip code and estimates demand levels for
all zip codes in Greensboro.
10
11
Financial Determinants for Energy-Efficiency Upgrade Project Financing (Loans)
Beyond the demonstrated need for energy-related improvements, Program demand also depends
on property owners’ ability to pay for the initial upgrade, either with cash or through a loan.
Several demographic factors indicate whether sufficient equity is available to pay for
comprehensive upgrades in Greensboro. For example, the mean household income is $60,233; 83
percent of households are moderate-income and above7. The median home price in the City is
$142,400. Of the owner-occupied units, 24.5 percent, or 13,522 homes, have no mortgage burden.
For homeowners with a mortgage, monthly payments are $1,245 on average8. Homeowners with
such financial characteristics are likely to have the economic means necessary for Program
participation.
For the 13 percent of Greensboro’s households living at or below the federal poverty line, and the
roughly 15 percent of Greensboro households living within 200% of the federal poverty line9, an
energy-efficiency upgrade program must be specifically tailored to provide energy-upgrade
financial assistance. Small-grant and weatherization-assistance programs in lower-income
neighborhoods present two viable options for decreasing the households’ energy-bill burden.
Median incomes in seven Greensboro zip codes (27214, 27401, 27403, 27405, 27406, 27407,
27409) fall below North Carolina’s Weatherization Assistance Program (WAP) threshold (below
200% of the poverty line). Various incentives (i.e., rebates and small grants), which serve to make
energy retrofits more cost-effective and increase overall demand, can be targeted to middle- and
low- income households. Such targeting increases distribution of program benefits (i.e. comfort
and monetary savings) beyond homeowners to tenants, while also increasing Program size and the
job-creation and GHG-reduction benefits created by the Program.
In addition to this basic structural assessment for energy-efficiency upgrade potential, we also use
utility-billing late-payment and cut-off data to gain some insight into the ability of different zip code
regions to make monthly loan payments on time. Results indicate a wide distribution of water
cutoff percentages throughout the City.
Percentage of customer water-billing records
that show a cutoff in service, Greensboro
1.50%
1.00%
0.50%
0.00%
FY09
7
FY10
American Community Survey (2009). Accessed at: www.factfinder.census.gov.
ibid
9
Estimates are based on US Census’ “Preliminary estimates of weighted average poverty thresholds for 2010” and American
Community Survey income estimates.
8
12
POTENTIAL ENERGY-EFFICIENCY UPGRADE PACKAGES &
MARKETS
To provide a snapshot of the types of retrofit improvements that potential Program participants
might undertake, we used the Department of Energy’s Home Energy Saver Calculator to create a
profile of common improvements for typical households in different market segments in
Greensboro, NC.
Any project recommendations would be based on an audit assessment of cash-flow positive or
cash-flow neutral payback. For residential energy retrofit loans, the monthly loan payment will be
equal to or less than the household’s monthly utility-bill savings.
Please note, the estimated project amounts assume that the homeowner decides to make all the
recommended improvements within a given Upgrade Package. If a homeowner decided to take on
only some of the recommended retrofit projects, the cost, and hence the loan amount, would be
lower.
TABLE 3: SAMPLE ENERGY-EFFICIENCY UPGRADE PACKAGES, TARGET MARKETS & COSTS
Upgrade Packages
Upgrade Cost (Range)
Basic Efficiency Package [target markets: VERY HIGH, HIGH &
AVERAGE DEMAND]
Attic Insulation
$1,250 - $1,875
Wall and Crawl Space Insulation
$2,250 - $2,750
Air Sealing: 25% air-leakage reduction
$2,500 - $3,750
Duct Sealing: Reduce leakage to 6%
$2,500
Total: $8,500 - $10,875
Medium Retrofit Package [target markets: VERY HIGH & HIGH
DEMAND]
Attic Insulation
$1,250 – $1,875
Wall and Crawl Space Insulation
$2,250 - $2,750
Air Sealing: 25% air-leakage reduction
$2,500 - $3,750
Duct Sealing: Reduce leakage to 6%
$2,500
SEER 14 Heat Pump (4-ton unit)
$5,000-$6,000
Gas Water Heater (62% efficiency)
$900 - $1,050
Total: $14,400 - $17,925
Deep Retrofit Package [target market: VERY HIGH DEMAND]
Attic Insulation
$1,250 - $1,875
Wall and Crawl Space Insulation
$2,250 - $2,750
Air Sealing: 25% air-leakage reduction
$2,500 - $3,750
Duct Sealing: Reduce leakage to 6%
$2,500
SEER 14 Heat Pump (4-ton unit)
$5,000 - $6,000
Gas Water Heater (62% efficiency)
$900 - $1,050
Clothes Washer (Energy Star)
$600 - $1,000
Double pane Energy Star Windows
$11,000 - $15,000
Cool roof: Solar reflectance
$3,000 - $5,000
Total: $29,000 - $38,925
Annual Energy Bill
Savings*
$260
$250
$120
$106
$736/yr
$260
$250
$120
$106
$513
$60
$1,455/yr
$260
$250
$120
$106
$513
$60
$146
$184
$29
$1,668/yr
* Annual energy-bill savings are the estimated reduction in energy bill amounts, per retrofit, for the
representative home. These annual savings are estimated as cost savings over and above the minimal
building code mandated for new units. Accordingly, savings may be underestimated if residential units do
not comply with minimal new construction standards prior to retrofit.
13
INDUSTRIAL MARKET ASSESSMENT
Overview
Greensboro’s roots are in industrial manufacturing which still plays a critical part in the city’s
economy today thanks to more than 750 manufacturing establishments. Within these 750+
manufacturing establishments, two industrial clusters emerge that are relatively large in size and
high in energy usage. First, there is a significant printing and publishing cluster in Greensboro, with
more than 150 establishments. The printing and publishing cluster is classified as a high-energy intensity sector (see Table 4). The second industrial cluster is the plastics and rubber product
manufacturing subsector, which also has a high energy-intensity ratio and high average annual
energy cost per establishment. The businesses within this cluster use relatively similar industrial
processes, with the input – plastic or rubber – playing the main differentiator role between the
subsectors.
In this section, we identify and locate clusters of energy-intensive manufacturers in Greensboro.
We then provide a general framework to evaluate potential Program participation, based on energy
usage characteristics and potential upgrades10.
Methodology
To identify concentrations of high-energy-intensity manufacturers in Greensboro -- i.e., potential
loan recipients -- we used several data sources to identify Greensboro’s top 10 manufacturing
subsectors and measure their energy intensity. We followed these steps:
1) Categorize and rank Greensboro’s top 30 manufacturing subsectors by NAICS codes using
the 2006 Economic Census;
2) Calculate each subsector’s energy-intensity ratio by dividing [net electricity, 1,000 kWh
purchased + generated-sold in 2009] by [value of product shipments, 2009]. This produces an
energy intensity ratio, per subsector that ranges from 1.14 to 0.03. For Greensboro, we
define a high energy-intensity ratio as greater than or equal to 0.1.
3) Using the Reference USA database of all manufacturing businesses in Greensboro, we locate
concentrations of energy-intensive subsectors within the City; specifically identifying the
number of establishments in a given subsector (minimum of 10 establishments is needed to
qualify for analysis).
10
While the Program targets structural upgrades, this section also includes manufacturing process retrofits, for consideration in
current or future program design.
14
TABLE 4: ENERGY INTENSITY CALCULATIONS FOR TOP 10 MANUFACTURING SUBSECTORS IN GREENSBORO (2009
DATA) -- SORTED BY ENERGY -INTENSITY RATIO (HIGH TO LOW )*
NAICSBased
Code
Meaning of NAICS-Based
Code
Printing & Publishing
Printing & related support
3231
activities
3222
Converted-paper product mfg
Avg. Net
Electricity
Usage (1,000
kWh)
Avg. Value
of product
shipments,
($1,000)
Energy
Intensity
Ratio
Number
Annual
of
Energy Cost
Establish- per Establishments
ment**
417
$2,374
0.176
105
$24,466
2,859
$18,587
0.154
16
$167,830
Plastics & Rubber Mfg
3261
Plastics product mfg
3,401
$10,956
0.310
19
$199,635
3262
Rubber product mfg
3,180
$13,630
0.233
10
$186,669
Other
3328
Coating & heat treating
821
$3,219
0.255
19
$48,171
3149
Other textile product mills
352
$1,878
0.187
17
$20,663
3219
Other wood product mfg
520
$2,930
0.177
24
$30,502
3326
Spring & wire product mfg
790
$4,693
0.168
12
$46,352
3335
Metalworking machinery mfg
396
$2,421
0.163
11
$23,234
3259
Other chemical product mfg
Machine shops, screw & bolt
mfg
2,056
$13,068
0.157
10
$120,689
277
$1,826
0.151
19
$16,237
3327
Source: DOE-EIA (2009) Economic Census Industry Series.
NOTES: * Using U.S.-wide net electricity usage and product-shipment value numbers from 2009. Besides NAICS 3336, only
NAICS subsectors with at least 10 establishments are included in the analysis, and only subsectors with .1 energy-intensity ratio
or higher are included in the analysis. **Using 2009 average electricity price for N.C.’s industrial sector of 5.87 cents per
kilowatt hour (kWh).
Industrial Targets and Upgrade Project Potential
Top Target Industries within Greensboro
As Table 4 (above) demonstrates, numerous industries within Greensboro possess high annual
energy costs and could potentially benefit from energy-efficiency upgrades. However, when
initially rolling out the Better Buildings Program, it is important to target manufacturing subsectors
that also exist in a relatively high density in Greensboro. Targeting specific subsectors will enable
program administrators to better relate to potential program participants and understand critical
capital-improvement decision points.
Accordingly, we have equally balanced three critical characteristics -- energy intensity, number of
establishments within Greensboro, and annual energy cost per establishment – for our calculations
and recommend targeting four initial industries to target that fall within two clusters. These two
clusters are the printing and publishing cluster and the plastics and rubber products manufacturing
cluster. Below, we examine these two Greensboro industrial subsectors.
Printing and Publishing Cluster:
1) Printing & related support activities (avg. annual energy cost: $24,466 per
establishment), 2) Converted-paper product manufacturing (avg. annual energy cost:
$167,830 per factory), and 3) Newspaper & book publishers.
In these three subsectors, Greensboro possesses 172 establishments; this number stands out far
above other potential industrial clusters. Specifically, there are more than 100 printing and related
support activities companies, 16 converted-paper product manufacturing companies and 50+
15
newspaper and book publishers. Therefore, finding ways to serve the printing and publishing
companies will be critical for targeting local industry.
Plastics & Rubber Product Manufacturing Cluster: 1) Plastics product manufacturing (avg.
annual energy cost: $199,635 per factory) & 2) Rubber product manufacturing (avg. annual
energy cost: $186,669 per factory).
Both the plastics and rubber product manufacturing industries rank among the top three
manufacturing subsectors for energy-intensity ratio and annual energy cost per establishment.
Moreover, these two subsectors fall within the general NAICS 326 Plastics and rubber products
manufacturing subsector. Further, their production processes are quite similar, and likely to
become even more so as material technology progresses and plastics are increasingly being used as
a substitute for rubber. Indeed, the distinction may eventually disappear as a basis for
classification11.
Some background information: The plastics product manufacturing industry group is comprised
of establishments that process new or recycled plastic resins into intermediate or final products,
using methods such as compression molding, blow molding, and casting. Often the production
process allows for output of a wide variety of products; final products include pipes, laminated
plastics and plastic bottles. The rubber product manufacturing companies process natural,
synthetic or reclaimed rubber materials into intermediate or final products such as tires, floor mats,
hoses, and rubber bands.12
General Upgrade Opportunities
In 2006, the International Energy Agency found that “the energy intensity of most industrial
processes is at least 50% higher than the theoretical minimum”13. In more direct language, this
means energy-efficiency upgrades have considerable potential to reduce industrial manufacturing
energy costs, saving companies thousands of dollars while also reducing CO2 and other GHG
emissions. Some technologies are broadly applicable across multiple industries. In the following
section, we first outline these general upgrade opportunities. Then our analysis homes in on
energy-efficiency upgrades that are specific to target industries within Greensboro.
Motor Systems and Steam Generation
Using motor systems comprises 65% of the energy used by industrial manufacturers and there are
several upgrades that can increase the efficiency of motor-driven systems, saving companies 2030% of energy consumption. Key motor-system upgrades include the following14:




Reduction of losses in motor windings
Use of better magnetic steel
Improved aerodynamics of the motor
Improved manufacturing tolerances
15% of industrial energy use comes from steam generation. The efficiency of current steam boilers
can be as high as 85%, but many steam boilers, especially older ones, possess efficiency levels in the
11
“2007 NAICS Definitions: 326 Plastics and Rubber Products.” US Census. 2007.
http://www.census.gov/naics/2007/def/NDEF326.HTM
12
Ibid.
13
Worrell, Ernst (2009) “Industrial Energy-efficiency and Climate Mitigation”. Ernest Orlando Lawrence Berkeley National
Laboratory, February Document.
14
Ibid.
16
55-70% range. Increasing the efficiency of boilers can yield energy savings of up to 18-20%, by way
of improvements including:





General maintenance
Improved insulation
Combustion controls and leak repair
Improved steam traps
Condensate recovery
Printing and Publishing Cluster: Upgrade Recommendations
This cluster possesses several different types of businesses, but the core printing and publishing
businesses typically utilize printing presses. Dryers, cooling systems, drive motors and air
compressors all provide opportunities to reduce a printing press energy consumption. Dryers
account for 35% of power use within printing presses, so installing heat recovery systems or
decentralizing steam supply can help reduce energy use.15 The second-largest energy consumer
within printing presses is the main drive motor, which consumes about 25% of the total power
used. When making upgrades, selecting higher efficiency motors will save 3-5% of energy
compared to standard motors, and installing variable-speed drivers through fan or pump systems
can also be a cost-effective improvement.16
Plastics and Rubber Product Manufacturing Cluster: Upgrade Recommendations
Plastics and rubber product manufacturing rank in the top 10 energy-intensive industries in the
US.17 Many possible retrofitting strategies can be cost effective in these factories, due to a range of
factors including: fuel mix -- about 44% of factories use fuel and 56% use electricity -- and
age/type of technology. Overall, common efforts to improve energy-efficiency and estimated cost
savings include18:
TABLE 5: UPGRADE RECOMMENDATIONS AND ESTIMATED S AVINGS IN PLASTICS AND RUBBER PRODUCT
MANUFACTURING
Total Annual Savings Implementation Cost
Recommendations
Simple Payback
(estimated)*
(estimated)
Improve water cooling
$37,490
$31,500
10 months
system
Insulate bare molding
$5,532
$4,640
11 months
machines
Add liquid pressure
$5,837
$25,000
4 years, 3 months
amplifiers to chillers
Install energy-efficient
$4,831
----lighting systems
Improve HVAC system
$4,173
----Develop heat recovery
$4,784
----processes
*Savings scaled to a factory with average annual energy costs of $195,000.
15
“Heidelberg Designs Green Printing Press”. Compressed Air Best Practices. 2011.
“Paper products and printing”. Carbon Trust. 2009.
17
“Energy Use and Loss Analysis: U.S. Manufacturing and Mining”. Energetics Incorporated. April 2004.
http://www.swagelokenergy.com/download/ELAUSInd.pdf
18
“Improving Energy-efficiency at U.S. Plastics Manufacturing Plants”. The Society of the Plastics Industry Inc. & U.S.
Department of Energy. 2007.
16
17
COMMERCIAL MARKET ASSESSMENT
Overview
Commercial buildings in North Carolina fall under the ANSI/ASHRAE/IESNA Standard 90.1-2007
building code that mandates baseline levels of energy-efficiency. The role of energy-efficiency in
commercial businesses, however, goes beyond state mandates or a building’s environmental
footprint. The business case for energy-efficiency and renewable-energy retrofits and investments
includes19:





Reducing operating costs through energy savings
Increased reputational advantage in the “green” niche market
Creation of new markets and economic expansion
Stronger tenant retention, leading to lower vacancy and turnover rates
Mitigated business risk associated with energy price volatility
Promotion of financing mechanisms for energy-efficiency loans should address the business
incentives of energy efficient investments for commercial buildings.
Methodology
To identify the potential market for energy-efficiency upgrade financing in Greensboro’s
commercial sector, we used a variety of data sources. Parcel data was used to analyze the
saturation of each sub-sector in Greensboro. The U.S. Department of Energy’s Commercial Buildings
Energy Consumption Survey (CBECS) was used to assign energy intensities to each sub-sector.
Lastly, retail prices to commercial customers for gas, electricity, and heating oil were obtained from
U.S. Energy Information Administration databases. For the calculation of energy intensities and
ranking of sub-sectors, the following methodology was used:
1) Using heated-area square footage and heating fuel type data for commercial parcels, we
assigned an energy intensity index based on the 2003 CBECS end-use energy consumption
tables.
2) Next we created an energy-dollar intensity for each sub-sector by multiplying U.S. EIA
energy price information by the CBECS energy-intensity index for each type of fuel used at
each commercial parcel.
3) Then we aggregated each parcel into one of 34 sub-sectors based on parcel data use codes,
and 8 larger sectors based on CBECS principal building activities. We then calculated
annual energy expenditures per sector, sub-sector, and unit to illustrate the commercial
building composition and energy use in Greensboro.
4) Lastly we ranked sub-sectors in terms of annual energy expenditures to ascertain the ones
most likely to respond to cost savings from energy-efficiency investments.
19
U.S. Department of Energy: Energy-efficiency and Renewable Energy. “Energy-efficiency Trends in Residential and
Commercial Buildings.” October 2008.
18
Commercial Targets and Upgrade Project Potential
The majority of Greensboro’s commercial buildings are: office, service, retail, health care, food,
worship, and lodging. Within the main commercial sectors, several substantive characteristics bear
directly on the demand for energy-efficiency loans in commercial buildings. The three structural
determinants of demand are fuel source, type of heating/cooling system, and type of airconditioning system. As shown in Table 6, the primary source of fuel for commercial properties in
the City of Greensboro is natural gas; the typical heating-cooling system is forced-air duct; and
central AC is prevalent for cooling. There is also a lot of variation between commercial subsectors,
which indicates a need for a marketing strategy that is both diverse and specific. Properties in the
service and lodging sectors, for example, appear to have quite different characteristics than other
commercial properties, and should therefore be approached in a different way.
TABLE 6: COMMERCIAL BUILDINGS’ ENERGY CHARACTERISTICS
FUEL SOURCE
Sector
Office
Service
Retail
Health Care
Food
Worship
Lodging
Other
HEATING-COOLING SYSTEM
AC TYPE
% using
% using
% using gas % using oil
% using
% using
electricity
forced-no
% using no % using
as primary as primary forced-duct
heat pump
as primary
duct for
AC
central AC
fuel
fuel
for heating
for heating
fuel
heating
29%
10%
19%
27%
20%
25%
68%
20%
60%
54%
79%
65%
74%
47%
28%
65%
7%
12%
2%
7%
4%
25%
3%
9%
76%
31%
90%
85%
87%
79%
45%
70%
6%
38%
3%
2%
4%
3%
37%
12%
9%
3%
7%
9%
6%
11%
5%
8%
14%
76%
2%
4%
7%
16%
6%
23%
73%
19%
65%
86%
57%
82%
68%
63%
% using
packaged Average
rooftop year built
cooling
13%
5%
32%
10%
36%
1%
2%
13%
1972
1976
1983
1981
1981
1967
1980
1964
Note:The “other” category for each charaecteristic is not shown, therefore percentage totals do not equal 100%.
Top Target Commercial Clusters within Greensboro
Office Buildings
Office space represents the largest market share within Greensboro’s commercial building stock.
Office buildings in Greensboro tend to be relatively small in size, with the typical unit being 9,598
square feet (see Table 7 below for details).
Office buildings with three floors or fewer have annual energy expenditures per unit of $22,777 and
exhibit the highest energy expenditure in aggregate terms. This is largely driven by the quantity of
these office buildings in Greensboro. Each office parcel has modest annual energy expenditures,
but when viewed as a sub-sector, the aggregate expenditures are large.
Strip Malls
Strip malls dominate Greensboro’s retail sector. The next largest sectors are food service and
health care. Strip malls have high energy costs as a whole. Strip malls, on average, tend to be large
individual units, averaging 18,268 square feet, with high ceilings and lots of open space. Thus
annual energy costs per strip mall, at $48,958, are relatively high (see Table 7 for details).
Nursing Homes
Nursing homes and convalescent hospitals have substantially higher annual energy expenditures
per unit than any other sub-sector in Greensboro. Energy costs, averaging $144,296 per year, are
driven by intensive 24-hour operation and large building size. These characteristics indicate that
nursing homes as particularly sensitive to energy cost reductions. Since commercial properties
tend to be diverse and energy costs accumulate differently between sectors and subsectors, this
19
analysis dictates a multifaceted approach when marketing loan instruments to commercial
borrowers.
TABLE 7: COMMERCIAL BUILDINGS ENERGY INTENSITY CHARACTERISTICS IN GREENSBORO, NC: TOP SUBSECTORS IN TERMS
OF ANNUAL ENERGY EXPENDITURES
Annual
Annual
energy
Number of Average unit Total Floor Energy-Dollar
Energy
expenditure
units
size
Space
Intensity
Expenditure
per subper Unit
sector
Office space (3 floors)
Strip Malls
Auto Sales/Repair
Restaurants
Nursing Homes
Churches
Medical Buildings
Supermarkets
1313
424
391
201
57
481
168
52
(sq ft / unit)
10,795
18,268
8,560
5,490
23,772
9,984
8,809
20,801
(sq ft)
14,173,835
7,745,632
3,346,960
1,103,490
1,355,004
4,802,304
1,479,912
1,081,652
( $ / sq ft)
2.11
2.68
3.57
9.87
6.07
1.60
3.28
4.29
( $)
$ 29,906,792
$ 20,758,294
$ 11,948,647
$ 10,891,446
$ 8,224,874
$ 7,683,686
$ 4,854,111
$ 4,640,287
( $ / unit )
$
22,777
$
48,958
$
30,559
$
54,186
$ 144,296
$
15,974
$
28,894
$
89,236
Sources : DOE-EIA CBECS, http://www.ei a .doe.gov/cnea f/el ectri ci ty/epm/ta bl e5_6_b.html ,
http://www.ei a .doe.gov/dna v/ng/ng_pri _s um_dcu_nus _m.htmm, http://www.ei a .doe.gov/dna v/pet/hi s t/.
Energy-efficiency Upgrade Potential
Greensboro’s commercial properties, while diverse, also share common features that the Program
should target to be most effective. According to the “Energy-efficiency Trends in Residential and
Commercial Buildings” study, published by the U.S. Department of Energy-efficiency and Renewable
Energy in October 2008, the primary energy-consumption end uses for commercial buildings are
lighting (25.5%), space heating (14.2%) and space cooling (13.1%). These end uses, totaling over
50% of total commercial energy consumption, are the focus for the following energy-efficiency
improvements.
Office Space and Strip Malls: Upgrade Recommendations
More than 80% of office buildings and more than 65% of strip malls in Greensboro were built more
than 20 years ago. Thus, these buildings are likely to have outdated technology and could see vast
energy-cost reductions via improvements in lighting technologies, thermal building envelope
upgrades, and new climate-control equipment.
Electronic ballasts, as opposed to traditional magnetic ballasts found in fluorescent lights, can
produce a 30% increase in energy-efficiency in office buildings and strip malls.20 Currently,
electronic ballasts saturate the lighting market, but older buildings that have yet implemented them
could see drastic energy cost savings.
A building’s thermal envelope makes up the barrier between its internal and external space – its
composition directly affects the efficiency of a building’s heating and cooling system. In
Greensboro’s office buildings and strip malls, upgrading building insulation to DOE’s recommended
levels could produce up to a 30% reduction in energy costs.
20
20
Ibid.
Lastly, changing the way energy is used in commercial buildings can lead to significant reductions
in energy costs. Improving climate-control equipment and ensuring that systems are installed
properly can improve the use of energy for office buildings and strip malls. For example, the use of
occupancy-sensor lighting systems can reduce lighting costs in office buildings by up to 45%.21
Nursing Homes and Convalescent Hospitals: Upgrade Recommendations
Nursing homes, which provide 24-hour care to elderly and disabled patients, have high energy bills
when compared to other building uses in Greensboro. These buildings could see energy cost
reductions by making improvements to lighting, building envelopes, and climate-control equipment
(similar to office space and strip malls).
An improvement unique to nursing homes would be to replace motors that power HVAC systems,
refrigeration, and vertical transportation. In a case study performed by the Consortium for Energyefficiency’s “Motor Decisions Matter” campaign, retrofitting complete HVAC systems with energy efficient motors, at an average cost of $29,452, could recoup annual savings of over $11,000 per
year; as a result, payback on investment would take less than three years22. Thus buildings that
have the highest energy bills have the most to gain from energy-efficiency upgrades.
21
22
21
Collaborative Economics for Next 10. “Untapped Potential of Commercial Buildings, Energy Use and Emissions. 2010
XENERGY Inc. “Small Skilled Nursing Care Facilities: A Profile of Motor Energy-efficiency Opportunities.” April 2001.
KEY FINDINGS
This analysis generated several findings to inform the Greensboro Better Buildings Program rollout,
including:
Residents’ ability to afford the full cost of energy upgrades will be a challenge in East
Greensboro, but increasing weatherization and energy-efficiency grant programs can bring
down household energy bills and should be supported.
Small grants and weatherization assistance programs in middle- and lower-income neighborhoods
are a viable option for decreasing the energy bill burden for these households. Median incomes in
several zip codes (27214, 27401, 27403, 27405, 27406, 27407, 27409) fall below North Carolina’s
Weatherization Assistance Program threshold (equal to or below 200% of the poverty line ), but
more programs are needed to provide viable financing options to medium income homeowners
whose homes could be made more energy-efficient with Basic Efficiency Packages.
Focus industrial loan program on the printing and publishing cluster.
More than 170 establishments in Greensboro operate within the printing and publishing sector,
including dozens with high energy intensity and high average annual energy costs. Serving this key
sector through the Better Buildings Program could increase program participation and also assist
the printing industry that helps drive Greensboro’s economy.
Marketing efforts directed towards commercial businesses need to make the business case
for investments in energy-efficiency.
Sell energy-efficiency improvements by showing property owners the reduced energy costs that
results from efficient buildings and processes. Selling points for efficiency upgrades include:
reputational advantage in the “green” market, higher tenant retention, and improved productivity.
Office space, strip malls and nursing homes have high potential for cost savings through
energy-efficiency upgrades
These three sectors have been identified as prime targets for energy-efficiency upgrades based on
the large share of building stock these sectors occupy as well as their high annual energy
expenditures. Low-cost efficiency upgrades that are specific to office space, strip malls, and nursing
homes include new lighting technologies, thermal envelope upgrades, and updated heating-cooling
systems.
Four Greensboro zip code areas provide opportunities for substantial energy savings that
can be supported through loans rather than direct grants; they will be candidates for
neighborhood-based residential loan program rollout.
The zip codes 27410, 27408, 27407 and 27406 each have over 2,000 high-demand residential units,
and taken together, total nearly 15,000 units with high demand for Medium and Deep Upgrade
packages. Accordingly, the Better Buildings Program could focus its marketing and program rollout
in these adjoining areas of the city; this could increase positive spillover of program aims to gain
homeowner participation.
22