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Deep Retrofits Next Market for Struggling Architects

AIA lends business advice to architects facing a down economy: start selling deep energy retrofits.

By Candace Pearson

This story originally appeared on BuildingGreen.com.

August 13, 2013
A deep retrofit of the California Department of Motor Services Building shows there are exciting opportunities in existing buildings for architects to sell their expertise. The Lionakis Group achieved $126,000 in annual energy cost savings for this building, in part by installing a dual-skin facade for passive ventilation.
Photo courtesy AIA/RMI
A deep retrofit of the California Department of Motor Services Building shows there are exciting opportunities in existing buildings for architects to sell their expertise. The Lionakis Group achieved $126,000 in annual energy cost savings for this building, in part by installing a dual-skin facade for passive ventilation.

The American Institute of Architects (AIA) and the Rocky Mountain Institute (RMI) have co-published a new guide for architects on deep energy retrofits. But this is not just a technical design guide; instead, the report explains why deep retrofits offer architects a good business opportunity and outlines the financial arguments and incentive programs needed to sell retrofit designs to clients.

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The report, Deep Energy Retrofits: An Emerging Opportunity, says that as of March 2013, employment in architectural services was 28 percent lower than the 2008 high. The downturn in new construction and design, however, revealed a market that may hold even greater potential. The 2012 AIA Firm Survey showed that architecture firms received 42 percent of their billings from renovation projects and that renovations accounted for the majority of projects for small firms.

In the U.S., where 72 percent of the building stock is more than 20 years old, architects who take up building renovations could expand their business opportunities—but the transition may require some new approaches and financial know-how.

Architects have the greatest opportunity to get involved in deep energy retrofits—where energy savings are upwards of 50 percent—because these extensive upgrades require design-centered expertise, the report says. But the authors also recognize that stepping into this role may require unfamiliar methods and new skills; they recommend architects engage all members of the team—engineers, building managers, and owners—early in the design process, instead of working independently. The report also suggests they learn how to perform at least an ASHRAE Level 1 energy audit.

In order to market this new service, architects must develop financial literacy to be able to communicate the business case for deep retrofits. A life-cycle cost analysis can be presented alongside a discussion about harder-to-measure benefits of a retrofit—such as improved employee satisfaction and retention, higher occupancy rates, and rental and sale price premiums, for example.

Knowledge about upfront utility rebates and tax rebates, including the Energy Efficient Commercial Buildings Tax Deduction, would also help to encourage clients to make more extensive changes. In some cases, the total tax benefits can reach as much as 40 percent of a project’s cost—a major selling point for many commercial ventures. The report outlines six retrofit financing tools and shows where they apply.

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