Sustainable Industries Digest teased a story today in its regular e-newsletter as such: “The green building industry has a dirty little secret: Until recently, few people really kept track of how so-called ‘high-performance buildings’ were actually performing.”

The story, entitled “The missing link” references an older study that calls into question performance modeling and the LEED label. With pending federal legislation that may require commercial property owners to measure energy performance, operating LEED buildings with intention should gain traction.

A study released in March 2008 by New Buildings Institute (NBI) looked at 121 of U.S. buildings that were certified by the LEED for New Construction (LEED-NC) rating system through 2006. Of those, only 25 percent are performing better than their counterparts that were built to code.

The study, titled “Energy Performance of LEED for New Construction Buildings,” showed a great deal of inconsistency in terms of many of the buildings’ actual-versus-expected performance. Because performance data is being collected and analyzed for very few buildings, not many designers, building owners or operators even know if their buildings are performing as advertised. It’s an issue of increasing concern, especially among insurance companies and law firms.

NBI’s study included data on just 22 percent of all LEED-NC buildings certified in the United States in 2006. Getting the data for the worst-performing buildings in the study was very difficult because they were being operated “with no intention,” says Mark Frankel, NBI’s technical director. “We couldn’t find anyone involved in the [maintenance and operations of the] building.”

You may have heard about LED lighting in the news recently. There are several cities around the country converting their street lights to be LED street lights. No more metal halide or high pressure sodium bulbs. As you would imagine these types of streetlights need to be quite powerful to light up the blacktop 25 feet below the pole. Sure enough they are bright!

So what about LED lights on your property in the common areas that you are paying the electricity on? Well such replacement bulbs exist and they make CFLs look bad.

There are two types of LED bulbs; high power and low power. You have most likely only seen low powered bulbs which hardware stores and Costco try and sell. The problem with low power bulbs is that they do not give off enough lumens, light. High powered bulbs do exist and are fantastic.

LED bulbs cost $40 to $60 each. When you factor in the length of time your lights are on, the replacement cost of incandescent and CFLs, the cost of electricity, and the low wattage LEDs consume you will appreciate the power of LEDs. Look at this real example.

Dave F. of Los Angeles, CA, purchased 177 LED bulbs for the common area of this 125 unit complex, Sussex Manor, in Orange, TX.

He replaced 65 watt incandescent bulbs with 6 watt LED bulbs. This measured a savings of over 90% on his utility bill for the portion dedicated to lighting. This positive changed saved Dave F. $37.18 PER BULB per year starting in year 1. At an 8% CAP rate Dave F. raised the value of his property by $82,261! ($37.18 X 177 =6,580.86 ÷ .08 = $82,261)

How much did it cost Dave F. to replace the bulbs? Answer: $9,549. With the energy savings that the 6 watt bulbs save, Dave F. will experience an ROI of the LED bulbs in 1 year 3 months and 25 days. This assumes that the common area lights are on for 11 hours a day. As the cost of electricity rises he will find his investment to have an even higher rate of return.

As an added benefit, high power LED lights last for 50,000 hours, so Dave’s maintenance staff does not have to purchase and replace bulbs for the next 12 years 5 months and 13 days.

Spending $9,549 to save $6,580 annually for the next 12+ years and raise the value of his property at an 8% cap rate to $82,261 is not just a good financial decision it is environmentally smart too!

In the Aug. 3, 2009 issue of Time Magazine (This week’s issue; Bush & Cheney on the cover) page 54 gives LED lighting a big thumbs up. It references that Google recently purchased 25,000 LED bulbs.

About the author: Scott Yahraus is the president of Apartment Energy Consultants and Standard LED Lighitng. Visit www.GreenRetrofitter.com and/or www.standard-led.com to learn more. Email Scott directly at Scott@GreenRetrofitter.com

Given that financing is about as scarce in the marketplace today as leg room on a domestic flight, the Small Business Administration’s recent revision to its 504 Fixed Asset Financing Loan Program is a welcome bit of news. Through the revised program, borrowers can secure up to $4 million in financing for projects that reduce energy consumption by at least 10%.

New construction or renovations can qualify for up to $2 million in financing if they meet sustainable design or “green building” principles, many of which can be found in the U.S. Green Building Council’s LEED program.

Here’s a general outline of the energy saving changes from the SBA:

The Public Policy Goals for Energy Efficiency are described in the Small Business Investment Act, Section 501(d)(3) as (I), (J), and (K) below

E1 - (I) reduction of energy consumption by at least 10 percent

E2 - (J) increased use of sustainable design, including designs that reduce the use of greenhouse gas emitting fossil fuels, or low-impact design to produce buildings that reduce the use of non-renewable resources and minimize environmental impact, or

E3 - (K) plant, equipment and process upgrades of renewable energy sources such as the small-scale production of energy for individual buildings or communities consumption, commonly known as micropower, or renewable fuels producers including biodiesel and ethanol producers.

Projects meeting ANY of these can go to $2 Million without creating or retaining jobs, as with other Public Policy Goals, so long as the CDC portfolio average is $50,000 as required.

SBA also has two new categories of loans permitted by the Act, Section 502(2) A (iv) and (v) to reach $4 Million in 504 financing, titled by the Act as “Energy Efficiency Projects.” The Act allows 504 Loans up to:

E1 - (iv) $4 Million for each project that reduces the borrower’s energy consumption by at least 10 percent; and

E3 - (v) $4 Million for each project that generates renewable energy or renewable fuels, such as biodiesel or ethanol production.

Projects eligible for up to $4 Million under one of the above do not have to meet the job creation or retention requirement, so long as the CDC portfolio average is at least $50,000.

For questions about the new energy goals, contact Richard Jones at SBA at (916) 735-1782 or by e-mail at richard.jones@sba.gov.