Green Construction and Renewable Use Are on the Rise

Report cover from McGraw-Hill Construction.

Three recent reports only confirm what many people believe: the world is experiencing a growth in green construction and renovations as well as a growth in reliance on renewable energy generation.

"World Green Building Trends" by McGraw-Hill Construction and United Technologies not only shows a growth in green construction, but it shows a dramatic shift in the reasons for its growth. Four years ago when the company did a similar report that also analyzed views on global green building trends and drivers for the green building market, the main reason given for green building was that it was the right thing to do. In fact 42% of respondents offered this as their reason in 2008. However, in the most recent 2012 report, which was based on a survey of more than 800 architects, engineers, contractors, consultants and building owners in 62 countries, that number dropped to 26%.

This group obviously now expects green construction to yield savings. Thirty percent of respondents offered lower operating costs as a reason for green build in 2012, an increase from 17% in 2008. Over five years, this group expects the median operating cost savings from green new builds to be 15% while those involved in green retrofits expect 13% savings. The businesses involved in new green buildings expect a payback on their green investment in eight years while the retrofit firms expect payback in seven years.

The other two main reasons for green construction—customer demand and market demand—varied little from 2008. In 2012, 35% of respondents said that client demand was one of the top triggers for green build (compared to 34% in 2008). Market demand was a top trigger in 2012 with 33% of respondents offering this as a reason, but that percentage was actually a slight decrease from 2008 when 35% said market demand was a top reason for green build.

Ninety-four percent of architects, engineers, contractors and owners surveyed said that they were doing some green building (construction that is certified as green by a green building rating system or will be certified as such). For 28% of these respondents, more than 60% of their work is green—double the percentage in 2009. The number of firms expecting that 60% of their work will be green by 2015 is 50%.

Breaking out the projects by commercial customers (hotels and office buildings) and institutional customers (schools and hospitals), the report found that 63% of firms have planned new green commercial projects between now and 2015 while 45% are working on new green institutional projects and half are doing green renovations.

When these firms talk about being green in their projects, what do they mean? Here is how it breaks out by types of green products and systems they are implementing: 63% use green electrical products 60% use green mechanical products 60% use thermal and moisture protection 57% use building automation systems 52% use waste management systems 50% use green finishes 50% use green flooring 34% use green furnishings

The report also delves into the use of renewable energy, stating that 67% of respondents used renewable energy in 2008 while 83% used it in 2012. Solar is used by 67% of respondents, followed by geothermal at 27% and wind at 14%. Fifteen percent of respondents use all other renewables (including hydro, biomass, tri-generation). However, use of geothermal and wind is anticipated to grow by 2017 with 44% of respondents saying they will use geothermal by then and 42% saying they will use wind.

According to the "Annual Energy Outlook 2013" report from the U.S. Energy Information Administration (EIA), renewable generation will grow from 13 percent of the generation mix in 2011 to 16 percent in 2040. Much of that growth will come from solar.

In fact, a recent report from GTM Research shows that the United States has experienced an explosion in solar power projects in the past year. Not only is the United States home to nine of the top 10 largest solar power projects being developed today, but in 2012, the country added 3.3 gigawatts of solar power capacity, which was more added capacity than in the three previous years combined. (Although to put that in perspective, the average U.S. nuclear power plant generates about 12.2 billion kilowatt-hours, according to the EIA).

Obviously, commercial, industrial and residential customers may think that all of this green growth will translate into cheaper electricity. But that may not be the case just yet. Renewable energy must still be transported from its generation locations (which are typically outside of cities) to the cities that need that power.

Are you currently seeing a decrease in your operating and/or energy costs due to green construction/renovations or the use of green energy sources? What are your expectations for future savings from these sources?