Retro-Commissioning Revenue Could Skyrocket Beyond $1.8B by 2014

The market for retro-commissioning projects in commercial buildings could exceed $1.8 billion by 2014, according to a new study from Pike Research.

The report, "Energy Efficiency Retrofits for Commercial and Public Buildings," offers conservative and aggressive forecasts of revenue growth in the market that stood at roughly $160 million in 2010.

The conservative figure projects almost fivefold growth to $759 million in revenue by 2014. The aggressive forecast pegs growth at more than 11 times the size of the 2010 market, which would catapult retro-commissioning revenue beyond $1.8 billion by 2014. Either way, the market could soar, according to the study. 

As GreenerBuildings.com Executive Editor Rob Watson has often noted, retro-commissioning is one of the most effective measures to increase energy and cost efficiency in an existing building. And in recent Smarter Buildings talks at the 2011 State of Green Business Forum, experts detailed the value and savings that can be gained from comprehensive auditing, benchmarking and fine-tuning of building systems and their performance.

Retro-commissioning generally results in savings of 10 or 20 to percent and average payback periods of less than a year, according to Pike Research.

"Retro-commissioning projects are low-risk investment opportunities with average cash-on-cash return on investment of over 90 percent," industry analyst Levin Nock said in a Pike Research statement on the study. "As the commissioning industry matures from fewer than 2,000 commissioners at present to more than 20,000, it will probably consolidate around successful marketing and sales strategies. When mature, we believe that the annual revenue opportunity for retro-commissioning will be approximately $4 billion."

An increase in energy and building performance regulations at state and local levels is expected to contribute to that growth. For example, a New York City law, which was adopted in 2009 and takes effect in 2013, mandates energy audits and retro-commissioning every 10 years for privately owned buildings that are larger than 50,000 square feet. The building owners also are required to annually benchmark energy and water use starting this year.

In February, San Francisco Mayor Edwin Lee signed a measure into law requiring owners of commercial buildings in the city that are over 10,000 square feet to audit, benchmark and report performance of the structures -- in addition to disclosing retro-commissioning and retrofit measures taken at the properties. The requirements are being phased in over a three-year period that runs until spring 2014.

In a further signal of anticipated growth in the market, earlier this month the Institute for Market Transformation and the Natural Resources Defense Council launched BuildingRating.org, an online repository for information about building energy performance regulations and disclosure programs around the world.

Information on how to download a free copy of the Pike Research executive summary, or purchase the full-length version, of the " Energy Efficiency Retrofits for Commercial and Public Buildings" report is available at www.pikeresearch.com.