By: Matthew K. Norris, Contributing Writer to MyEnergySolution.com
Back in October of 2009, President Obama signed an executive order that called for a 30% cut in vehicle fuel use by 2020, a 50% increase in recycling by 2015, and to establish 2020 greenhouse gas reduction targets within 90 days. Under this executive order, all federal agencies will be required to meet a series of environmental targets over the next ten years. These targets include 50% recycling and waste diversion by 2015, a 30% reduction in vehicle-fleet petroleum use by 2020, and a 26 percent improvement in water efficiency by 2020. In addition, the executive order requires that federal procurement offices promote environmentally responsible products and encourage sustainable business practices among federal vendors and contractors by requiring 95 percent of applicable contracts to meet sustainability requirements.
The potential impact of this executive order on the U.S. solar power market could potentially be enormous but to understand why it is necessary to understand the growing usage of LEED certification within real estate development planning. LEED (Leadership in Energy and Environmental Design) is an internationally recognized green building certification system developed by the U.S. Green Building Council (USGBC) to provide building owners and managers a structure for identifying and implementing practical and quantifiable design, construction, operations and maintenance solutions for green buildings. A key component of the LEED certification includes designs and strategies aimed at improving energy saving which focuses heavily on the usage of renewable or green energy sources, most notably solar power.
The government at every level in the U.S. has been involved in various LEED initiatives over the past ten years. According to the USGBC, LEED legislation, executive orders, resolutions, ordinances, policies, and incentives are found in 45 states, including 442 localities (384 cities/towns and 58 counties), 35 state governments (including the Commonwealth of Puerto Rico), 14 federal agencies or departments, and numerous public school jurisdictions and institutions of higher education across the United States. These initiatives and laws require that all new buildings meet certain LEED certification thresholds. In 2003, for example, the U.S. General Services Administration began requiring all new building projects to strive for the LEED Silver standard and, at a minimum, to meet the LEED standard for basic certification. In many of these initiatives solar power usage is an important component in achieving LEED certification.
The U.S. Green Building Council estimates that government owned or occupied LEED buildings make up 29% of all LEED projects in the U.S. Currently, the federal government has 310 certified projects and another 3,535 pursuing certification. State governments have 487 certified projects and 2,006 pursuing certification. Local governments have 732 certified projects and 3,208 pursuing certification. Again, many of these projects will contain a solar power generation component in order to increase energy savings as dictated by the various levels of LEED certification. The trend within government real estate development and management is to increase the usage of green technologies to reduce environmental and operating costs. Utilization of solar power can only benefit from this trend.
Ultimately, commercial solar power providers will benefit from the new government initiatives as one of the most common (and most utilized) methods to satisfy the power generation requirements of the LEED certification is through solar power. Solar power remains the primary renewable power generation model due to the incredible financing incentives provided by federal and state governments as well as its ability to be easily integrated (structurally as well as aesthetically) into a building design. And as stated above, the number of projects being considered for LEED certification is growing and most likely will continue to grow as the federal government continues to mandate energy efficiency. So as private developers of government buildings are required to obtain LEED certification, the demand for solar power as a component of these development projects can only continue to increase.
Matthew Knox Norris is currently a Finance and Project Manager with Spindrift Partners, Inc., focusing on the bidding, development and management of U.S. government-leased properties. Prior to this, he was a member of the Executive Finance Development Program at Thermo Fisher Scientific where he was responsible for developing strategies to improve customer profitability and operational performance for the Fisher Healthcare business unit. Mr. Norris has an MBA from The University of Texas at Austin and a B.A. in Economics from Claremont McKenna College.