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Commercial buildings could save as much as $60 billion if energy efficiency investments were increased by just 1-4%, according to a study by the American Council for an Energy Efficient Economy (ACEEE).

However, the average cost of using a Building Management System (BMS) to smart retrofit a building is around $2.30 per square foot, or $250,000 for 100,000 square feet, according to Buildings. Meaning return on investment (ROI) is not so straightforward.

On the other hand, the internet of things (IoT) with its low-powered networks and increasingly cheap sensors, is helping reduce the cost of smart buildings. Buildings suggests that by implementing IoT-based controls and monitoring to a building can cost from just $5,000 to $50,000, a small figure compared to the traditional cost of BMS. So is it worth waking up your old dumb building with smart retrofitting strategies?

“For a quarter of a century the building automation industry has been working hard at delivering full connectivity across all the different building services. They have been successful in achieving this goal but the solutions have been expensive, lacked flexibility and robustness and whilst they improved the optimization of the buildings performance they could not be fully automated,” explains our report on The Transformation of BAS into the Building Internet of Things.

The BIoT is not only adding flexibility and new applications to our buildings but also creating avenues for cost saving. When retrofitting BIoT can even reduce installation costs with less need for complex cabling. “With smart building concepts, you can reduce the cable and pathways by coordinating infrastructure,” Jim Sinopoli, managing principal of Smart Buildings told Siemens.

The key element of operational cost saving in a smartly retrofitted building is energy saving. The automated fault detection and diagnostics of modern building energy management systems (BEMS) assist in reducing maintenance downtime and other operational costs. This adds to simple energy saving methods such as equipment set points and timers.

“The energy savings due to intelligent efficiency is the difference between a system that is occasionally optimized and one that is always optimized and continuously improving,” according the ACEEE study. In fact it is widely accepted that advanced BEMS system alone can up to 66% on energy consumption, depending on whether the packages have detection and diagnostics, historical analysis and predictive capabilities.

Another of the key recommendations of that ACEEE report, New Horizons for Energy Efficiency, is tying HVAC into the building energy management system in order to minimize consumption and maximize savings. “Advanced control strategies for packaged HVAC systems that customize air conditioning to the needs of the occupants using technologies such as multi-speed fans and demand control ventilation result in cost savings of 24-32% depending on the building type,” the study suggests.

Smart lighting also took prominence in the report, which advised pairing networked lighting with a building energy management system. True cost saving come from smart lighting that can “not only switch lights on and off at optimal times and vary light levels, but also do a comparative analysis of whether the impact on HVAC energy use that results from adjusting smart windows to let in sunlight will be smaller or greater than darkening the windows and turning the lights up,” according to the report.

The study also promoted the installation of smart windows that lighten or darken depending on sunlight intensity, as they can help reduce the HVAC and lighting loads as well as reduce glare. A separate study by the Lawrence Berkeley National Laboratory illustrated savings of 19-26% on cooling and 48-67% on lighting if smart windows are implemented.

The report focused primarily on the energy saving benefits for the US power sector, suggesting that it could save upwards of 50 TWh by 2030 – if intelligent efficiency measures are applied to just 35% of eligible commercial floor area in buildings with 50,000 or more square feet.

Another report by the ACEEE ‘Overcoming Market Barriers and Using Market Forces to Advance Energy Efficiency’ discusses several targeted policies that leverage market mechanisms and address specific market failures to energy efficiency, without requiring substantial spending or government mandates.

It promotes the development of a comprehensive building labeling and benchmarking program and an even more impressive corporate tax legislation adjustment to encourage the replacement of inefficient equipment and from removing regulatory barriers to combined heat and power projects. These two policies alone could reduce national energy consumption by 7 quads and save the economy close to $300 billion.

Building owners and managers will hope that these programs can pass in Congress and bring about greater ROI for efficiency measures. “Green” legislation has not always had the best of luck in Congress but “eliminating barriers that keep us from reducing waste is an approach both sides of the aisle can support,” says Steven Nadel, ACEEE executive director. “By removing these barriers, Congress and state policymakers have an opportunity to let smart investments help strengthen the economy while saving the nation billions.”

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