The market for green buildings is exploding and the lion’s share of the opportunity exists in retrofits, not new buildings. McGraw-Hill Construction’s latest SmartMarket Report, Green Building Retrofit & Renovation: Rapidly Expanding Market Opportunities Through Existing Buildings, was released at the Green Retrofit Conference in New York earlier this week. The report finds that new buildings represent only 2.5% of the US building market, while retrofitting provides an enormous market opportunity for green builders, owners and building product manufacturers. Currently, green building comprises 5-9% of the retrofit and renovation market activity by value. This equates to a $2-4 billion marketplace for major projects. By 2014, that share is projected to increase by 20-30%, creating a $10-15 billion market for major retrofit projects in only five years.
“It is critically important that 20-30% of all retrofit and renovation activity will be green in five years because 98% of our buildings already exist, and they represent some of our most inefficient buildings,” said Harvey Bernstein, Vice President of Global Thought Leadership and Business Development at the McGraw-Hill Construction. “This is a $10-15 billion market opportunity in major projects alone, and it will significantly contribute to the expansion of green products and services, which will have a long-term impact on our future economy and ability to build green.”
The Green Building Retrofit & Renovation SmartMarket Report, profiles more than 20 projects to provide qualitative insights and offers cutting-edge research data to the growing green building industry. Market opinion and indicators suggest much higher levels of activity long-term for retrofits and renovations overall as well as for the green share, which is expected to reach a tipping point in 10 to 15 years. At this time, half of all retrofits and renovations will be green.
The report finds that owners and tenants with green retrofit experience are likely to do more green retrofit projects. In fact, 70% of owners who have engaged in green retrofit or renovation activities are planning to continue to do so for over 15% of future projects. Tenants fall into two extremes: one-third are committed to green retrofits for over 60% of projects, while 17% are not yet committed.
The economic downturn is encouraging the adoption of energy and water efficient practices in renovation projects. A majority of owners (62%) expect the savings achieved from energy efficiency improvements to recoup their investments within 10 years. The most frequently applied features include energy-efficient lighting or natural lighting. Nearly all (92%) also report installing more energy-efficient mechanical and electrical systems.
The Green Building Retrofit & Renovation SmartMarket Report was produced with support from Autodesk, CB Richard Ellis, Siemens, UL Environment, Inc., and the U.S. Green Building Council.
