50 Ways to Kick the Energy Efficiency Habit

Energy Efficiency sounds good, but it makes lousy policy, because of the simple financial fact that as a strategy it produces diminishing returns. So, with the thought of Paul Simon's 50 Ways to Leave your Lover in mind, here are some thoughts on how to free ourselves from this collective insanity which is holding up the transition to increasing deployment of renewable energy and progress towards energy independence, not to mention building property values.

The motto for this list is the famous statement:

Premature optimization is the root of all evil. (Donald Knuth)

This comment from one of the world's most famous computer scientists is exactly to the point, for unless you do the capital budget and a long-term plan first, and you can see a clear timeline on what energy future you want for your property, you are operating without a plan, and capital destruction is sure to follow, as night follows day. All the "energy efficiency retrofits" suck asset values out of properties and transfer them to the financiers, instead of improving property values.

50 WAYS TO KICK THE ENERGY EFFICIENCY HABIT

1. Hop on the bus, Gus, but by all means do proper financial planning, and see for yourself. Failing to plan is planning to fail and you'll fall prey to incentives and be stripped of your asset appreciation.
2. Be honest about how much you've spent on energy efficiency. Shouldn't

   

   To the tune of: 50 ways to leave your lover

   your bills be negative already? If in doubt go back to point #1
3. You can't save yourself rich, not with money, not with energy.
4. Successive Energy Efficiency investments exhibit diminishing returns,
5. Therefore Energy Efficiency literally does not add up - it is NOT additive.
6. The reason you can't save yourself rich is diminishing returns.
7. Not only does Energy Efficiency not add up, it is not additive towards sustainability, instead it is a sure prevention of sustainability - again because of diminishing returns.
8. Energy Efficiency is not interchangeable with renewable energy in achieving sustainability, it is of value only if it is complementary to site-derived renewable energy (SDRE).
9. Energy Efficiency in a fossil fuel system, is like lipstick on a pig and it is mutually exclusive with renewable energy.
10. Premature Energy Efficiency is the best prophylactic the carbon economy has to offer against renewable energy.
11. In a proper capital budget for energy, it will be seen that 30 years of no (or very small) energy bills versus 20-30% energy savings with various energy efficiency programs often easily justifies the far larger CapEx for SDRE, but intelligent use of passive measures and efficiency will reduce the ICap (Installed capacity) for SDRE.
12. The corollary to this is that any would-be analytical models which emphasize energy efficiency and utilize payback analysis automatically move renewables out of range.
13. Every step into renewable energy increases building resilience, yet we offer subsidized programs to quickly convert buildings to natural gas, before anybody gets the idea of going renewable (NYC Clean Heat). OTG Conversions are public enemy number one from the point of resilience and sustainability.
14. If you count in the cost of the consultants on NYC Clean Heat, and various building resiliency studies, we could have converted half those 10,000 buildings to renewables already.
15. Energy Efficiency makes the problem bigger not smaller, and makes it dollar for dollar less likely we'll ever switch to renewables.
16. With gratitude to Steve Hallett & The Efficiency Trap - energy efficiency is much ado about nothing. This book is the behavioral corollary to the financial problem of diminishing returns, providing yet another reason energy efficiency does not add up.
17. Kudos to Steve Hallett & The Efficiency Trap again, energy efficiency expands demand. The mission is to build the alternative.
18. With every dime you spend prematurely on increasing efficiency of your fossil fuel system, you are postponing the transition to a renewable system. This is capital destruction.
19. Successive steps of a well engineered renewable energy transition in a property will show interdependencies, which demonstrate an engineering reason why energy efficiency and renewable energy are mutually exclusive, on top of the financial reasons, unless they are properly planned and leverage each other so as to produce profound synergies.
20. Many if not most NYSERDA programs are for the benefit of your favorite utility company, and/or manufacturers of equipment, at the expense of optimal asset value for property owners. You want to do your own financial model first before you use their programs to see what subsidies you could qualify for. The old adage applies: great financing can make a good project better, but it can never make a bad project good. Happy shiny sales people of energy solutions violate this rule all the time, such as when they ask you if you would like to see if you qualify for "free solar panels." Hold on to your wallet.
21. Most NYSERDA programs as well as direct utility incentives bribe property owners to do what's good for the shareholders of the utility, and necessarily not what's in the best interest of the owners of the property.
22. Most NYSERDA programs, ConEdison's Greenteam, and other similar programs with other utilities, are customer retention programs for the utility and have little or nothing to contribute to property values, nor are they green if they only target energy efficiency.
23. Tax incentives, and financing requirements based on Energy Star ratings of equipment, tempt property owners to specify the wrong equipment for the sake of short term gain, and they make good design harder, not easier. These incentives need to be restated on the basis of GHG emissions, and/or water use reductions.
24. Energy efficiency and Energy Star requirements for buildings are counter productive, GHG reductions should be used instead for law makers, and regulators, while property owners should maximize NPV based on a 30 year energy plan.
25. Green financing is falling into the efficiency trap and makes the capital blunder of financing short term measures with long term money. It will lead to instability, and it is another underwriting crisis in the making.
26. PACE bonds have become nearly irrelevant by embracing energy efficiency instead of renewable energy.
27. Green Finance including PACE bonds could ensure above market rate appreciation of the underlying assets ONLY by mandating renewable infrastructure, never by energy efficiency requirements.
28. All energy efficiency programs are a greenwash, because they achieve the opposite of what they set out to do, both environmentally, as well as financially.
29. Energy efficiency programs are a rationalization for the good feeling of sacrificing something for the common good.
30. Energy efficiency programs are another demonstration that logic and reason are the horse the emotions ride in on. The only satisfaction is emotional, nothing is being accomplished.
31. The use of marginal analysis in the form of payback on equipment justified by energy savings is irrelevant to property owners, and only of interest to the sellers of that equipment. Caveat emptor applies here, for most retrofits have engineering interdependencies that may lock you out of other options, and you need to understand the holistic view of a long-term plan for your property first.
32. Net zero is not necessarily the sole objective, but a direction. Again: energy independence of your property and even partial independence from the grid, ensures you won't be left stranded.
33. Selling back to the grid can be avoided by implementing heat pumps, particularly high efficiency GSHP (ground source heat pumps - 500% efficient!), but also ASHP (air source heat pumps - 250% efficient).
34. In renewable energy design, energy efficiency comes back in play and should be used to optimize installed capacity (ICap) requirements. Notice that if your energy is free, you can pick your capital tradeoff, if it is cheaper to install more capacity or insulate more. The bottom line is that in deep retrofits there is no payback period for efficiency alone, but the right use of passive measures and efficiency will reduce the overall payback of a project and make it easier to finance.
35. Implementing renewables (SDRE), means shifting energy from liability to asset.
36. Implementing renewables also means focusing on production, not reducing consumption as the predominant strategy.
37. The renewable strategy means playing offense, not defense with energy.
38. Net-zero and green construction is growing like mad in new project development, so existing homes are eventually headed for demolition and abandonment if they cannot come up with a renewable strategy. Search for net-zero and energy efficient homes, and you'll see what I mean.
39. Energy efficiency is a bottomless pit that will keep you in the poor house if you fall into it. Stop now, and make a financial plan to switch to renewables wherever possible.
40. Energy Efficiency is the addiction that covers up our energy addiction, so again it makes the problem bigger, not smaller. Energy is like methadone for heroin addicts: it makes the addiction manageable, but it is harder to kick.
41. If you are a renter, Energy Star appliances and other Energy Efficient Products are your best friend. For renters marginal payback of the equipment from energy savings is appropriate.
42. Whenever renewable energy is treated as a building block in energy efficiency, it will be undervalued and implemented incorrectly.
43. Avoid net metering whenever you can, except in emergencies. Plan your design to capture and use as much energy as possible in your property.
44. The 90by50 report from the Green building council is full of good ideas, but once again gets lost in the weeds of energy efficiency.
45. Manhattan is a heat sink, but renewables will mean the outer boroughs can become far more attractive places to live, while Manhattan will become the energy slum, with a small number of exceptions to prove the rule.
46. When buying a coop or a condo find out the energy plans, it will make at least a 10-20% difference in building values within 10 years.
47. It is time for tenants associations to work with landlords, even to the point of mixed ownership of energy plant if nothing else will work. Community solar is such an idea. It is high time to get rid of the split incentive. There is room for innovation here.
48. Write to your politicians to support the principles of the DaBx Renewable Energy Retrofit Portfolio Standard, and focus on subsidies for achieving reductions in GHG emissions, and try to get exemptions from all rules that stand in your way. Many well intended rules hold up the show because they are counter productive on a building level.
49. Evaluate all technology options that are suitable for your property, not just one. Solar thermal DHW and/or HVAC as well as heat pumps should top your list.  They are mature technologies, wind energy is often superior if you have the right location. Solar PV comes last unless you have space to waste. Don't forget green roofs, and other passive energy strategies either.
50. The reason they are giving away solar PV, is because it is your worst option, unless it fits your overall design and you have the space for it - which most residential owners don't. Solar PPAs are usually a really bad deal for almost all consumers. They are only better than doing nothing. Solar thermal yields up to 7 times the amount of energy per square foot.

Conclusion: renewable energy adds value

50 ways to leave energy efficiency behind, because it is a financial dead-end, the corollary to which is the phenomenon of The Efficiency Trap. Only renewable energy will offer rising property values, as well as dampen any loss of value in downturns, as was widely acknowledged by institutional investors during the downturn of 2008. Net-zero or near-zero properties are one of the best asset classes ever to own.

Property Values in the Age of Renewable Energy

Once the market begins to grasp that renewable energy, any form of clean energy, means free energy and therefore no energy bills, and therefore permanently lower O&M (Operating & Maintenance) costs compared to a fossil fuel infrastructure, property values will forever be affected by that information. Property values will become directly related to energy prices for the one and only reason that now there is an alternative--there is a benchmark. It is only a matter of time until net-zero is that benchmark, because it is so simple and easy.

As economists would tell you, the action always happens on the margins, and in this case what's happening on the margin is that net-zero construction flourished all through the recent real-estate downturn. That is important information for property valuation. Currently, we are at the dawn of a more public awareness of that net-zero homes and buildings, as the financial industry is grappling with the related underwriting issues, and beginning to formulate green financing methods for renewable energy retrofits, which they somehow stubbornly continue to misunderstand as energy efficiency retrofits.

The sceptics will argue that the incremental cost of renewable energy is sometimes greater than the incremental value added, but that is a short-sighted argument. This may have seemed true at times during the recent low energy prices... Just wait until energy prices start rising again! the point being that whoever was able to find renewable solutions will see the value of their property go up in tandem with the energy prices. The mission is simple: find such renewable energy solutions as make sense today, and be prepared to add-on in the future. For existing buildings, net-zero is a direction, and what matters is getting closer to it.

The secondary issue affecting property values will become resiliency: to what extent is your property able to continue functioning if the grid comes down. This implies that net-zero is not the be all and end all, must have objective, after all net-zero is easier to do in new construction than in old construction. Even approximating net-zero can only be achieved with renewable energy options, however - no amount of 'energy efficiency' will get you there. Independence from the grid is more important than achieving net-zero status, even if it is only partial. Just ask the people who were without utility service for weeks and months after hurricane Sandy. They would have given their hen's teeth for hot water, if nothing else. Valuing resiliency is trickier, and will depend in part on how many power outages we had in the last year.

Case one: property values for Net-zero or not-zero (but close)

Green Looks are not enough

If you can start from scratch, with new construction, net-zero is now a broadly feasible thing, and it is in high demand. Given that this was the only area where construction flourished during the downturn, it is clear that the market values the notion of net-zero, and developers would not be building it if it wasn't financially worthwhile. So all the theoretical arguments that the costs exceed the benefits are out the window. Like with everything else, some designs will be better than others, and no doubt there are solutions that are uneconomical in the short-term. Thus it is up to property owners to figure out the winning formula for their properties that will get them partial independence from the grid. The central strategy is renewable energy in whatever form.

We might notice that in the data center industry it has been the rule for a long time now that the most reliable designs are to use the grid only for a backup, not as a primary source of power. This is another fringe phenomenon that holds a lot of information value. With respect to property values, any property that is practically independent from subscription energy sources and therefore the grid, will go up in value with every energy price hike and with every major power outage - all else being equal. These will be the premium properties. The benchmark will be the energy usage for comparable homes. And remember again, you can only get there with forms of renewable energy--energy production, not energy savings (although they help).

CASE TWO: ENERGY EFFICIENCY WAS ALL WE COULD DO

There is almost no case where you can't do at least some renewable energy, and but in the worst case you make your home as efficient as possible, and provide a generator to get you through the storms. Broadly speaking, these will be the mediocre homes, and for a long time they will be the majority, in part because people invested foolishly in energy efficiency even if they could have done renewable energy. Energy efficiency alone is a lousy strategy because of diminishing returns. Usually, 30% "energy savings" is very good from an energy efficiency standpoint, but with renewable energy 70-90% reductions in energy are usually within reach.

The underwriting industry for the most part is focused on energy efficiency as a priority and a requirement for certain financing, mostly referred to as green mortgages, etc. This is a trap for the financial industry as a whole and for building owners as well. There seems to be a general energy efficiency mania going on, which will have us miss the boat in terms of what could be done with renewable energy. Pity the poor property owners who get trapped in all these misguided incentives. Investments in energy efficiency will be wiped out if same/similar buildings implement successful renewable energy strategies.

Financially, the funniest part of the market will be those buildings that went along with the energy efficiency mania, but will come to trade at a discount, because investment-wise the efficiency strategy is a dead-end, and the resale value of these buildings will suffer as a result, if they had evident potential for renewable energy infrastructure, but followed the pied piper of energy efficiency.

case three: property values without potential - scrap it or fix it up?

The next class down is the lowest, and here increasingly tradeoffs between energy retrofits and demolition will take place. If the building is in bad shape, and doesn't have the potential for a serious renewable energy overhaul, the value will come under increasing pressure, again, simply because net-zero will emerge from the fringe and become increasingly main-stream. Entire classes of buildings will see property values decline because of it. Sometimes whole streets.

Location, location, location, and four more times

Assessment of property values will never be the same again, and NYC will never be the same when these lessons sink in. Manhattan will tend to be a permanent energy sink, and a future energy slum, although there are interesting options such as triple glazing with capabilities for shedding and harvesting heat as needed, which are a renewable energy option. The recent 90by50 report from the Urban Green Council put a lot of emphasis on this option, but for Manhattan, this is just about the only viable renewable energy option. All other options are overwhelmed by the scale of buildings. Most will never even get close to net-zero.

The outer boroughs by and large are in far superior position to exploit renewable energy quickly. Of course, the opportunity is rapidly being squandered with the current gas conversion tsunami, with the NYC Clean Heat program as cheerleader for the lemmings going off the cliff. Be that as it may, eventually property owners will get it, and there will be a tremendous shift in the NYC real estate landscape as a result. Besides the insights offered above, about the three broad classifications of buildings along the lines of their energy independence, any property must be evaluated on the basis of its suitability for all types of renewable energy: geothermal, wind, and solar, and in some cases hydro-electric power. Along with it the options for passive solar etc. need to be considered. And how close a property gets to net-zero status will become the benchmark for success.

Conclusion

Valuation of properties will never be the same as the impact of renewable energy is being felt. Besides the old location, location, and location, there will be 3 or 4 more: suitability for solar-, geothermal-, wind- and hydro-power. Net-zero buildings are becoming the gold standard in renewable energy implementation, and property values will reflect how close a building comes.

NYC Clean Heat is regressive with respect to Clean Air Compliance

The NYC Clean Heat program is in effect strongly regressive, for at a time when it is completely viable for multifamily buildings to switch to green energy, the net effect of the way the present NYC Clean Heat program works is with NYC boiler conversions, and shifting buildings from oil to natural gas en mass. Evidently, natural gas burns cleaner than #6 or #4 oil, but nonetheless a more substantive shift to renewable energy is long since feasible, and moreover is economically more attractive for building owners, tenants and the city. NYC Clean Heat should put more emphasis on the shift to renewables. Most importantly, the shift to renewable energy would have far greater impact on the city's Clean Air profile, than practically forcing these buildings to commit to another 30 years of fossil fuel burning, even if the emissions per se are lower. In short, the net result is that this program in the way it is being practiced is strongly regressive from the point of view of achieving the vaunted improvements in Clean Air Act compliance.

The NYC Clean Heat Cookie Cutter Approach

By and large the program now is focused on prolonging the fossil fuel era as long as possible, because it focuses entirely on the adoption of clean fuels, and happily continuing to burn things, which will be for the most part natural gas and in a few cases either #2 oil or even biodiesel. In short, its impact on actually meeting Clean Air Act standards, will be absolutely minimal, and when one considers that it is possible to switch to far more renewable energy today, it is in effect strongly regressive. To be specific, we assume the reference building has an old-fashioned steam boiler, with hot water from a coil in the boiler. Further, natural gas does not have any particulate emissions, and between greater efficiency of a modern boiler and cleaner burning gas, we can expect perhaps a 50% reduction in CO2 emissions:

1. Building burns #6 oil and the base line CO2 emissions are 100, and particulates 100.
2. Building switches to Natural gas, CO2 goes to 50 and particulates to 0.
3. Over thirty years that means cumulative CO2 emissions of 30x50= 1500.

This path adds up to passing off the difference between the Titanic sinking in 10 minutes instead of 5 as an "investment" opportunity. If this option is anything, it is not an investment, but an operational expenditure. The problem gets compounded even further if businesses take on long-term debt for a short-term fix of this sort.

Clean Air and sustainability from renewables

Now the alternative, as proposed in DaBx PlaNYC2020:

1. Replace Domestic Hot Water (DHW) with a renewable solution, which eliminates 30-50% of fuel consumption (these are proven stats, DHW is year-round, heat only half the year) this reduces emissions by 30-50%, so both CO2 and particulates go to 50-70% of former number, I will use 50% for the example here. The choices are geothermal or solar thermal.
2. The economic life of the boiler is now extended, since the boiler gets a summer vacation from now on.
3. When boiler replacement becomes economically necessary, which we'll estimate is in 10 years, replace with either a solar thermal HVAC solution or individual heat pumps, (driven by solar PV or wind energy) or in the worst case a new natural gas boiler. Combine with better insulation, new windows as needed.
4. Results over 30 years now are: years 1-10: CO2 50, particulates 50, and years 10-30 CO2 0, particulates 0. Total CO2 10x50+20x0= 500, particulates 500, and particulate emissions would be limited to the winters, when smog is less of a problem.

Note: These numbers are obviously only schematic, and there are a lot of nuances there which we ignore for the sake of this example, such as the fact that gas may be cleaner burning, but the transportation losses also figure into the emissions, to say nothing of the fracking debate.

Sustainability is the only way to clean air

Sustainability is not just an idle thought, it is also economically very powerful. Properly analyzed, business sustainability follows directly from making the right decisions in this transition. Building preservation is enhanced by switching to renewables. Most importantly, since the sustainable technologies of sun, wind, water, geothermal all eliminate the need of burning things, except in some very limited backup functions, such installations are all enhancements to the asset value of the building.

Energy efficiency is of fossil fuel is mere life extension

Evidently, if no economical entry point can be found for a building to convert to renewable energy, and achieve sustainability, and a measure of independence from the grid, then efficiency measures for the existing plant are the only option. In the vast majority of buildings there are serious steps that can be taken towards sustainability. Whenever a building has any renewable option--free energy, after all--it should take it.

Nowhere on this site do we argue against energy efficiency, we merely point out it should never be the first objective. The first objective should be do we make or buy our energy, and if instead of energy efficiency, we take reducing emissions and achieving Clean Air standards as an objective, the building is then free to pursue that objective with whatever means is the most economically attractive, and that is how it should be. The 90by50 report from the Urban Green Council pointed out the top line feasibility of massive change, but meanwhile we are missing a huge opportunity for shifting to sustainability, and make significant progress towards Clean Air in 2013, 14, 15.

Conclusion

NYC Clean Heat is shifting buildings from #6 and #4 oil towards Natural Gas at the expense of Clean Air, and long-term sustainability of buildings, which goes against an interest in building preservation.

Report 90by50 from the Urban Green Council

The recent 90by50 report from the Urban Green Council was an exceptionally well targeted feasibility study of the potential for drastic energy infrastructure change in New York City building stock. I already wrote about it on my green energy promotion blog. There is a lot to like about it, but it will also most likely be abused and bastardized in the process and the potential never realized. We seem to be a long way away from the kind of concerted action that is really needed, although the feasibility can no longer be in doubt.

While the report identifies clearly that things like New York's PlaNYC2030 were too conservative, and doomed to produce failure because it merely tinkers at the margins, this plan is too high level to be actionable as such, and therefore it may end up being its own worst enemy if we're not careful. Such a high level view has merits, but becomes tricky when it is combined with other high level views such as macro-economists are wont to produce and administrative institutions are wont to consume, so together they can make the high level nonsense that goes for energy policy, and worse, incentives.

However, the helpful implications are the fact that since reducing carbon emissions is definitely of primary importance, the sorts of marginal improvements that PlaNYC2030 envisaged were insignificant, if not counter-productive. There is great need to be more drastic than that. This was one of the reasons why, with my consulting company DaBx Demand Side Solutions, we issued a report 2 years ago, DaBx PlaNYC2020, to make the point that there was at least one class of buildings in New York that was capable of much faster and more drastic change in energy infrastructure, and achieve an 80-90% reduction in CO2 emissions in short order, with today's technology.

PlaNYC2020 alternatives, in relation to 90by50

In one way, I would consider our DaBx PlaNYC2020, of which Mayor Bloomberg was given a complimentary copy on July 4th, 2011 (which we dubbed 'energy independence day' for the occasion) to be a special case under the 90by50 approach, and in a way perhaps the low hanging fruit, although the technology path implied there is quite a bit different from the 90by50 model.

What the 90by50 report identified correctly, and one of the reasons why it chose a 37 year implementation period, is that the economically optimal way of achieving this transition would be to tie in as much as possible with the normal infrastructural overhauls that buildings need periodically. In our report we had argued that same point. For example, the program to phase out #6 oil and use natural gas or either #2 or #4 oil instead forces the issue and even provides subsidies to encourage such conversions, and thereby it preserves the carbon economy without any attempt to asses if renewable energy alternatives might be within reach. Clearly, if we could achieve substantial reductions in CO2 emissions, and at the same time improve long term building values by decoupling buildings from energy price hikes, not to mention any potential future CO2 assessments that would be desirable.

In short, there are certain building types that could make the transition to a low carbon lifestyle quicker than others, but that's being stopped by Soviet-style top-down twenty year plans and incentives to switch to Natural Gas. What we really need is grandfather provisions for buildings that commit to a renewable energy transition, but would be forced not to do so by the present deadlines for the conversion. Here is yet another example of how 'one size fits all' does not work for this problem, since there is such a wide range of structural potential and problems in different groups of buildings.

Methodology for Achieving the Green Energy future sooner

Bottom-up, not top-down

The risk of both the City's PlaNYC2030 and the 90by50 report is that they tend to steer towards a top-down approach. Much of this is predicated on how planners get their data. Planners are fed macro-economic pablum, which in the area of energy typically means an argument that by far energy efficiency gives us the best bang for the buck, and renewable energy is still mostly uncompetitive on the margin. And based on all that wonderful stuff, the administration then establishes policies accordingly.

Nobody seems to notice that in the process, the existing energy infrastructure is being taken for granted and treated as an unstated assumption, for the existing programs are typically geared towards energy efficiency, with the occasional cameo role for renewable technology. In other words, we start right away by optimizing for a secondary objective, efficiency, while skipping the initial make/or buy decision which should come first. It tends to be done correctly for new developments, but for existing buildings, this step is being overlooked. The further mistake that is implicitly made, is that renewables are evaluated in roles that are traditionally defined by the carbon energy model, and rarely do we see a systematic attempt to figure out what you can do differently with renewable technology, because of its unique properties, so that possibly you can pick up design advantages as compared to plugging renewable technology into a carbon based energy distribution model.

The first part of the insight into the potential of renewable technology is the extent to which it can be installed locally, so that a building in whole or in part supplies its own energy. A good example is sometimes provided by solar thermal. It is an often overlooked technology, yet it is 95-98% efficient compared to Solar PV at 15-20% efficiency. The question is, is there a practical way to integrate it into an existing building infrastructure. The cost of integration may kill the idea. However, it should evidently be tried, and be part of an evaluation.

CAPM, CAPM and more CAPM - the Capital Asset Pricing Model

In short, buildings should really begin to be looked at as potential energy producers, that can become partially independent from the grid. Net-zero is not a feasible objective in most cases for an existing structure, but enormous advances are feasible with today's technology. And such transitions can be incorporated in long term capital plans that take into account a 20-30 year equipment life cycle. Besides good engineering, the most critical piece is really  financial: a rigorous application of the Capital Asset Pricing Model should be the standard. If this is done, a far greater use of renewable energy technology is possible compared to what is being done today, and many existing incentives are counter productive at least some of the time, because the favor vendors of equipment and or the energy companies themselves, at the expense of the long term economic interests of the building owners.

There are also some regulatory hurdles that will need to be addressed. The famous split-incentive problem between landlords and tenants will have to be addressed. In low income housing there are rules that are promulgated by HPD and CPC, which prevent the highly necessary redesigning of energy infrastructure in building rehabilitations. And again, many incentive programs and tax abatements tend to steer property owners in the wrong direction. All of this is misguided policy, driven by the same macro-economic assessment that is erroneously applied to micro-economic planning at the building level, and it produces government sponsored capital destruction.

So again, we need to start working as if we were a capitalist society, from the viewpoint of the buildings as an asset, not with top-down soviet-style 20 year plans, that shove the macro-economic square peg, in the micro-economic round hole. Too many decisions are made driven by the latest incentive, instead of on a sound long-term economic basis, which would accrue to improved building values. An accelerated conversion to renewable energy would be more constructive to building preservation than the current regime of moving the deckchairs on the Titanic, and switching to natural gas as the "less dirty" carbon fuel. The vaunted role of natural gas as a "bridge fuel" is really a very destructive postponement, if it forestalls renewable energy in applications where it is economical today. Present HPD/CPC policies are merely creating the slums of the future, with real estate values held for ransom by energy prices, and landlords that are beholden to these rules are like lemmings waiting for the next energy crisis.