[vc_section el_id=”greenintro”][vc_row][vc_column][vc_column_text css_animation=”fadeIn” css=”.vc_custom_1524150133508{background-position: center !important;background-repeat: no-repeat !important;background-size: cover !important;}”]
SOLAR(EFFICIENT)CITY
EXPANDING THE SOLARCITY MODEL
[/vc_column_text][vc_empty_space][vc_column_text css_animation=”fadeInUp”]SYNOPSIS /// The SolarCity business model provides solar panels to homeowners at a flat monthly rate with no upfront costs, saves money for homeowners, and makes a profit for SolarCity from the very first month of each install.
But what if this model were expanded to reduce resource demand through resource-efficient upgrades? Through such a model, the savings could be even more significant, and by reducing the barrier to entry, could rapidly help improve the sustainability of our built world.
To test this proposal, Class B Office has been selected as a real estate class that is sorely in need of upgrades and so can benefit greatly from this model. Class B office is a loosely-defined class of office buildings, which has not been upgraded recently, does not have all the bells and whistles, is often slightly outside of city centers, and occupies the middle ground between high-end Class A and low-quality Class C. Additionally, the Washington DC area has been selected as a market with abundant Class B offices, growing demand, and sufficient transit access to make much of the available Class B offices comprehensively sustainable with the right upgrades.
Examples of Class B office that meet these criteria are:
8233 Old Courthouse Rd, Vienna VA
7610 Carroll Ave, Takoma Park MD
1701 Clarendon Blvd, Arlington VA
7115 Leesburg Pike, Falls Church VA[/vc_column_text][vc_empty_space height=”50px”][vc_tta_accordion style=”flat” shape=”square” c_align=”center” active_section=”100″ css_animation=”fadeIn” no_fill=”true” collapsible_all=”true”][vc_tta_section title=”CONTENTS” tab_id=”1523502553942-16efcd83-38c8″][vc_column_text css_animation=”fadeInUp”]
CASE STUDY / NORTHERN VIRGINIA
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WHY CLASS B OFFICE?
[/vc_column_text][vc_empty_space][vc_column_text]Due to misaligned incentives, Class B office in the United States has not been renovated to modern resource efficiency benchmarks. In contrast, Class A office has been almost entirely upgraded to stay competitive. Class B office could benefit equally from reduced expenditure on energy and water, but with tenants paying these utility costs, owners have had little incentive to bear the upfront costs of renovations. Additionally, owners of Class B office tend to be smaller companies, making the necessary expenditure difficult, despite the offsetting rewards and short payback periods.
Two methods to capitalize on this discrepancy will be compared and evaluated:
GREEN LEASE // Operate a SolarCity-like renovation company to secure financing, fund the improvements, absorb the risk, and split the utility savings with the tenants. Tenants will pay an additional bill each month to the renovation company. This bill + the tenants’ reduced utility bills will be less than before renovating, providing tenant driven incentive at no cost to the owner.
or
GREEN FUND // Create a fund to buy Class B offices, renovate, and capture the utility savings through increased rent. Reinvest and grow.[/vc_column_text][fullwidth_row][/vc_column][/vc_row][vc_row el_id=”solarcity”][vc_column][vc_empty_space height=”50px”][vc_column_text]
THE SOLARCITY MODEL
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1 // SolarCity secures financing and installs solar panels at no cost to the owner
2 // SolarCity recoups their investment by charging a small amount each month (PPA)
3 // Even with this expense, the homeowner still saves money, and SolarCity makes money each month.
4 // WIN (Owner) WIN (SolarCity) WIN (The Environment)
This is the inspiration for the Green Lease model, which will use the same strategy, and expand it to include a broader array of building improvements.[/vc_column_text][parallax_row opacity=”15″ image=”8882″][fullwidth_row][vc_empty_space height=”50px”][/vc_column][/vc_row][vc_row el_id=”greenhistory”][vc_column][vc_column_text css_animation=”fadeIn”]
HISTORICAL DISRUPTIONS
[/vc_column_text][vc_empty_space][vc_column_text css_animation=”fadeInUp”]CHEAP ENERGY // Preceding the 1970s energy crisis, energy demand and production increased rapidly in the U.S. Following the crisis, the process of energy efficiency reform began, but its impacts failed to reach the building industry until the ’90s, after which time buildings have grown increasingly efficient. This means that some of the least efficient buildings in the U.S. were built in the 70s and 80s, and for office buildings in particular, these buildings have now depreciated into Class B & Class C buildings. Many are still in need of energy efficiency improvements.
BUILDING CODES // As part of the reform following the energy crisis, building codes introduced increasingly strict energy efficiency requirements. These code changes have played a major role in producing increasingly efficient buildings.
CLIMATE CHANGE // Growing awareness and urgency surrounding climate change has provided additional motivation to improve our built environment. A fairly direct register of the growing desire to publicly support sustainability is the rapid growth of LEED certifications, regardless of the program’s dubious effectiveness. Given need and demand, sustainable architecture will become increasingly prioritized.
VIABILITY OF SOLAR // Due to government investment and steady technological advancement, the price of solar has dropped drastically over the past three decades, and is predicted to get even cheaper. As a result, installations have increased equally rapidly, at a current growth rate of 59%. Although policy has regressed somewhat over the last year in many parts of the US, the average payback period is still 12.8 years, making solar a sound investment, especially given the additional economies of scale that office buildings can achieve.[/vc_column_text][fullwidth_row][/vc_column][/vc_row][vc_row el_id=”greenimprovements”][vc_column][vc_column_text css_animation=”fadeIn”]
PROPOSED IMPROVEMENTS
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Improvements / Average Payback Term[/vc_column_text][vc_progress_bar values=”%5B%7B%22label%22%3A%22LED%20LIGHTS%20%2F%206%20MONTHS%22%2C%22value%22%3A%222%22%2C%22color%22%3A%22custom%22%2C%22customcolor%22%3A%22%235ff94a%22%7D%2C%7B%22label%22%3A%22SMART%20THERMOSTATS%20%2F%202%20YEARS%22%2C%22value%22%3A%227%22%2C%22color%22%3A%22custom%22%2C%22customcolor%22%3A%22%238ff981%22%7D%2C%7B%22label%22%3A%22ADDITIONAL%20INSULATION%20%2F%202%20YEARS%22%2C%22value%22%3A%227%22%2C%22color%22%3A%22custom%22%2C%22customcolor%22%3A%22%23a3f998%22%7D%2C%7B%22label%22%3A%22OCCUPANCY%20SENSORS%20%2F%203%20YEARS%22%2C%22value%22%3A%2210%22%2C%22color%22%3A%22custom%22%2C%22customcolor%22%3A%22%23beffaa%22%7D%2C%7B%22label%22%3A%22HVAC%20UPGRADE%20%2F%205%20YEARS%22%2C%22value%22%3A%2217%22%2C%22color%22%3A%22custom%22%2C%22customcolor%22%3A%22%23d4ffaa%22%7D%2C%7B%22label%22%3A%22SOLAR%20PANELS%20%2F%208%20YEARS%22%2C%22value%22%3A%2227%22%2C%22color%22%3A%22custom%22%2C%22customcolor%22%3A%22%23eeffaa%22%7D%2C%7B%22label%22%3A%22LOW%20FLOW%20WATER%20FIXTURES%20%2F%2010%20YEARS%22%2C%22value%22%3A%2233%22%2C%22color%22%3A%22custom%22%2C%22customcolor%22%3A%22%23ffffaa%22%7D%2C%7B%22label%22%3A%22DOUBLE-GLAZED%20WINDOWS%20%2F%2030%20YEARS%22%2C%22value%22%3A%22100%22%2C%22color%22%3A%22custom%22%2C%22customcolor%22%3A%22%23ffde9e%22%7D%5D” bgcolor=”custom” css_animation=”fadeInUp” customtxtcolor=”#000000″][fullwidth_row][/vc_column][/vc_row][vc_row el_id=”casestudynova”][vc_column][vc_column_text]
CASE STUDY / NORTHERN VIRGINIA
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KEY FIGURES
[/vc_hoverbox][vc_empty_space height=”50px”][vc_tta_accordion style=”flat” color=”white” c_align=”center” active_section=”1″ css_animation=”fadeInUp” collapsible_all=”true” el_id=”greenfinance”][vc_tta_section title=”FINANCE OVERVIEW” tab_id=”1523500717034-ded89d36-08bd”][vc_single_image image=”8905″ img_size=”full” alignment=”center” css_animation=”fadeIn”][/vc_tta_section][vc_tta_section title=”PURCHASE / NO RENOVATIONS” tab_id=”1523473727240-74120e69-5d4e”][vc_single_image image=”8908″ img_size=”large” alignment=”center” css_animation=”fadeIn”][/vc_tta_section][vc_tta_section title=”PURCHASE / EFFICIENCY RENOVATIONS” tab_id=”1523473996696-8300224c-d2ee”][vc_single_image image=”8909″ img_size=”large” alignment=”center” css_animation=”fadeIn”][/vc_tta_section][vc_tta_section title=”PURCHASE / EFFICIENCY RENOVATIONS + SOLAR” tab_id=”1523474009242-8878ea0d-f8ca”][vc_single_image image=”8910″ img_size=”large” alignment=”center” css_animation=”fadeIn”][/vc_tta_section][vc_tta_section title=”RENOVATIONS ONLY / NO PURCHASE” tab_id=”1523474010324-83ccc1ee-2930″][vc_single_image image=”8911″ img_size=”large” alignment=”center” css_animation=”fadeIn”][/vc_tta_section][vc_tta_section title=”RENOVATIONS + SOLAR / NO PURCHASE” tab_id=”1523474011908-24cf5e58-bffd”][vc_single_image image=”8912″ img_size=”large” alignment=”center” css_animation=”fadeIn”][/vc_tta_section][/vc_tta_accordion][/vc_column][/vc_row][vc_section el_id=”maxdisruption”][vc_row][vc_column][vc_empty_space][vc_column_text css_animation=”fadeIn”]
SCALE / MAXIMIZING DISRUPTION
[/vc_column_text][vc_empty_space height=”50px”][vc_column_text css_animation=”fadeInUp”]INCENTIVES // It is important for the financial model to work without incentives, but additional incentives like preferential financing and reduced property taxes offered in Virginia (and elsewhere) bolster the upside.
CROWDFUNDING: COMMUNITY MEMBERS + USERS // As an alternate or supplemental financing source, community members and building users can help effect change as well as share the rewards. The marketing associated with this will also increase public awareness, helping to bring in additional projects.[/vc_column_text][vc_empty_space height=”50px”][video_row video=”https://www.youtube.com/watch?v=5qNU2eqmJEo” mute=”mute” opacity=”20″][fullwidth_row][/vc_column][/vc_row][/vc_section][vc_row css_animation=”fadeInUp”][vc_column][vc_btn title=”BACK TO TOP” align=”center” link=”url:%23greenintro|||”][vc_tta_accordion c_align=”center” active_section=”1″ collapsible_all=”true”][vc_tta_section title=”CONTENTS” tab_id=”1524151808904-fe525a96-3153″][vc_column_text]
CASE STUDY / NORTHERN VIRGINIA
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by drew kaczmarek
Image Credits
Peter Zumthor’s Serpentine Gallery Pavilion http://sharedesign.com/other/serpentine-gallery-pavillion-2011-by-peter-zumthor/
Solar Panel Installers http://fortune.com/2016/05/31/solar-panel-sales/
8233 Old Courthouse Road http://www.loopnet.com/Listing/8233-Old-Courthouse-Rd-Vienna-VA/11464200/
Dubai Time-Lapse Video https://www.youtube.com/watch?v=5qNU2eqmJEo
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