Summary of the 2004 Assessment

  • Mills, E., H. Friedman, T. Powell, N. Bourassa, D. Claridge, T. Haasl, and M.A. Piette. 2004. "The Cost-Effectiveness of Commercial Buildings Commissioning: A Meta-Analysis of Existing Buildings and New Construction in the United States." Lawrence Berkeley National Laboratory Report No. 56637
    • Full Report [PDF]

The aim of commissioning new buildings is to ensure that they deliver, if not exceed, the performance and energy savings promised by their design. When applied to existing buildings, commissioning identifies the almost inevitable “drift” from where things should be and puts the building back on course. In both contexts, commissioning is a systematic, forensic approach to quality assurance, rather than a technology per se. Although commissioning has earned increased recognition in recent years—even a toehold in Wikipedia—it remains an enigmatic practice whose visibility severely lags its potential.

Over the past decade, Lawrence Berkeley National Laboratory has built the world’s largest compilation and meta-analysis of commissioning experience in commercial buildings. Since our last report (Mills et al. 2004) the database has grown from 224 to 643 buildings (all located in the United States, and spanning 26 states), from 30 to 100 million square feet of floorspace, and from $17 million to $43 million in commissioning expenditures. The recorded cases of new-construction commissioning took place in buildings representing $2.2 billion in total construction costs (up from 1.5 billion). The work of many more commissioning providers (18 versus 37) is represented in this study, as is more evidence of energy and peak-power savings as well as cost-effectiveness. We now translate these impacts into avoided greenhouse gases and provide new indicators of cost-effectiveness. We also draw attention to the specific challenges and opportunities for high-tech facilities such as labs, cleanrooms, data centers, and healthcare facilities.

The results are compelling. We developed an array of benchmarks for characterizing project performance and cost-effectiveness. The median normalized cost to deliver commissioning was $0.30/ft2 for existing buildings and $1.16/ft2 for new construction (or 0.4% of the overall construction cost). The commissioning projects for which data are available revealed over 10,000 energy-related problems, resulting in 16% median whole-building energy savings in existing buildings and 13% in new construction, with payback time of 1.1 years and 4.2 years, respectively. In terms of other cost-benefit indicators, median benefit-cost ratios of 4.5 and 1.1, and cash-on-cash returns of 91% and 23% were attained for existing and new buildings, respectively. High-tech buildings were particularly cost-effective, and saved higher amounts of energy due to their energy-intensiveness. Projects with a comprehensive approach to commissioning attained nearly twice the overall median level of savings and five-times the savings of the least-thorough projects

It is noteworthy that virtually all existing building projects were cost-effective by each metric (0.4 years for the upper quartile and 2.4 years for the lower quartile), as were the majority of new-construction projects (1.5 years and 10.8 years, respectively). We also found high cost-effectiveness for each specific measure for which we have data. Contrary to a common perception, cost-effectiveness is often achieved even in smaller buildings.

Thanks to energy savings valued more than the cost of the commissioning process, associated reductions in greenhouse gas emissions come at “negative” cost. In fact, the median cost of conserved carbon is negative— -$110 per tonne for existing buildings and -$25/tonne for new construction—as compared with market prices for carbon trading and offsets in the +$10 to +$30/tonne range.

Further enhancing the value of commissioning, its non-energy benefits surpass those of most other energy-management practices. Significant first-cost savings (e.g., through right-sizing of heating and cooling equipment) routinely offset at least a portion of commissioning costs—fully in some cases. When accounting for these benefits, the net median commissioning project cost was reduced by 49% on average, while in many cases they exceeded the direct value of the energy savings. Commissioning also improves worker comfort, mitigates indoor air quality problems, increases the competence of in-house staff, plus a host of other non-energy benefits.

These findings demonstrate that commissioning is arguably the single-most cost-effective strategy for reducing energy, costs, and greenhouse gas emissions in buildings today. Energy savings tend to persist well over at least a 3- to 5-year timeframe, but data over longer time horizons are not available. It is thus important to “Trust but Verify,” and indeed the field is moving towards a monitoring-based paradigm in which instrumentation is used not only to confirm savings, but to identify opportunities that would otherwise go undetected. On balance, we view the findings here as conservative, in the sense that they likely underestimate the actual performance of projects when all costs and benefits are considered. They certainly underestimate the technical potential for a scenario in which best practices are applied.

Applying our median whole-building energy-savings value (i.e. not best practices) to the stock of U.S. non-residential buildings corresponds to an annual energy-savings potential of $30 billion by the year 2030, which in turn corresponds to annual greenhouse gas emissions of about 340 megatons of CO2 each year. The commissioning field is evolving rapidly. The delivery of services must be scaled up radically if the benefits are to be captured.

The fledgling existing-buildings commissioning industry has reached a size of about $200 million per year in the United States. Based on a goal of commissioning each building every five years, the potential size is about $4 billion per year, or 20-times the current number. To achieve the goal of keeping the U.S. building stock commissioned would require an increase in the workforce from about 1,500 to 25,000 full-time-equivalent workers, a realistic number when viewed in the context of the existing workforce of related trades.

Commissioning is more than “just another energy-saving measure.” It is a risk-management strategy that should be integral to any systematic approach to garnering energy savings or emissions reductions. Commissioning ensures that a building owners get what they pay for when constructing or retrofitting buildings, it provides insurance for policymakers and program managers that their initiatives actually meet targets, and it detects and corrects problems that would eventually surface as far more costly maintenance or safety issues.

Commissioning is an underutilized strategy for saving energy and money and reducing greenhouse gas emissions while managing related risks. Reasons for this underutilization include a widespread lack of awareness of need and value on the part of prospective customers, insufficient professionalism within the trades, splintered activities and competition among a growing number of trade groups and certification programs, a misperception that it is not cost-effective in smaller buildings, the absence of commissioning-like requirements in most building codes, and omission or obfuscation of the strategy in most energy-efficiency potentials studies. It is important to strike a healthy balance between standardization and recognition that each building is unique and must be approached with an open mind.

“Commissioning America” in a decade is an ambitious goal, but “do-able” and very consistent with this country’s aspirations to simultaneously address energy and environmental issues while creating jobs and stimulating economic activity.