SPEER has published our report “Cracking the Golden Egg: Capitalizing on Energy Efficiency Investments in Texas and Oklahoma’s Leased Commercial Buildings” aimed at addressing energy efficiency challenges in leased commercial buildings. Building owners and business owners (their tenants) are in a constant struggle to conserve capital and increase their respective bottom lines. These efforts intersect when it comes to reducing utility costs in leased commercial spaces. Despite this, energy efficiency investments in leased commercial buildings have lagged behind similar investments in owner-occupied facilities because of lease provisions that divide the project’s savings between the building owner and tenant, known as “split-benefits” or “split-incentives”. This means that there are leased commercial buildings with high value projects that have the potential to reduce operational costs, fund building upgrades with utility savings, and improve tenant spaces.
A number of initiatives and programs would allow owners and tenants to modify or bypass spit-incentive lease provisions so that they can tap into the energy savings available in their buildings. Solutions range from tenant sub metering, energy aligned lease provisions, energy efficiency financing mechanisms such as Property Assessed Clean Energy (PACE), and new lease models that allow for shared savings. These investments have the potential to transfer building owner and tenant revenue from operating expenses to functional budget areas, which could drive economic growth in the region. Please refer to the report for tailored strategies and insights that could increase energy efficiency investments for leased commercial buildings in the South-central region.