Green 2.0 – Green Building in the Alley
Notes on the May 10, 2011 Einstein Alley Entrepreneurs Collaborative Gathering
by Marion Reinson with Steven Georges
The Einstein Alley Entrepreneurs Collaborative is a community of Central Jersey entrepreneurs established by Steven Georges and John Romanovich in 2003 as a grass roots effort to bring “entrepreneurial-minded” people together. The goal is to provide a fertile ecosystem for the germination of ventures in Central Jersey (similar to Silicon Valley and Rt. 128) as well as a venue for those interested in helping entrepreneurs to grow successful businesses. Meetings are informal and provide a safe haven for entrepreneurs to share their ideas.
Over the seven-year history of the Einstein Alley Entrepreneurs Collaborative, we’ve hosted about 37 gatherings. At times we’ve measured the success of an event by the number of members in attendance. By that measure, our last event “Green 2.0 – Green Building in the Alley,” which attracted 16 human (and one canine) participants to the Green Living and Building Center (GLBC) in Lambertville, NJ, was not one of our greatest successes.
However, the powerful and thought-provoking presentation those attending witnessed and the feedback that we’ve received since tells a very different story. One member of the EA leadership commented that the gathering might have been the best ever. An attendee from the financial sector, who had been skeptical about the economics of Green, said this event was eye opening. A third, who came thinking that the Green economy might be dead, now believes that we are only in the early pioneer stages of the game. Given this feedback, I thought you might enjoy learning about what was discussed and my own takeaways from the meeting. Why take the time to read on? Because, I have seen the future and it is green.
The evening’s three presenters co-founded the GLBC with the shared belief that cost effective green living, building and commerce is achievable today given the right leadership team working with an integrated approach. Their focus is primarily upon green buildings because, 1) People spend 90% of their time in buildings, 2) buildings use 65% of all electricity, and 3) buildings are responsible for 39% of all green house gas emissions. Collectively, they presented a compelling argument that the transition to a green economy has already begun, and it has a positive ROI.
To get a real sense of these optimistic business sentiments I strongly recommend that you view this short film “High Performance Building – Performance and Practice” prepared in a partnership between the Rocky Mountain Institute and the U.S. Green Building Council. The GLBC partners gave a copy to the EAC attendees at the gathering. I watched the DVD and was blown away to see senior executives of Goldman Sachs, Adobe, Toyota, Cushman and Wakefield and many other corporate giants powerfully promoting the business case for their companies’ investments in new and retrofitted-LEED-certified facilities. The 18 minute film , which can be viewed on YouTube, (http:// www.youtube.com/watch?v=EYeoDHE38eg) ends with the following powerful statement by the late Ray Anderson, founder and chairman of Interface Inc:
“I believe businesses will be left in the competitive dust if they don’t respond as the public, as the market demands. The power is with the people and there is not a CEO worth her or his salt who will ignore the voice of the marketplace.”
The evening’s first presenter, Lia Nielsen is the day-to-day manager of GLBC and runs Gaia’s Way Inc, a consulting firm providing Product/LEED (Leadership in Energy and Environmental Design) expertise. Her presentation, “What Makes A Business Green,” provided a case study of Method, a privately-held home cleaning products company started in 2001. Method is one of now 416 certified “B Corporations” that use the power of business to solve social and environmental problems.
Jason Kliwinski, a LEED-certified architect and co-founder of the NJ Chapter of the US Green Building Council, is Director of Sustainable Design at the Spiezle Corporation and founder and president of Designs for Life. Citing specific case studies from a number of recent LEED-certified buildings that he has helped to design, Kliwinski stated that construction does not have to cost any more to be Green and, in fact, such buildings can provide an annuity of ongoing operating cost savings to the building owners and net energy to the grid.
To achieve a positive financial return several pre-conditions must be met: 1) green elements must be integrated in the design and not added as an after-thought, 2) available incentives and financing must be fully-taken advantage of, and 3) the architect must collaborate with the builder and subcontractors throughout the project. Jason said that many contractors would like to build green, but don’t, only because they have
never done it before. Consequently, he spends much of his time both on the job, and as a frequent speaker at industry conferences educating contractors as well as the public about cost-effective environmentally-responsible design. Jason strongly believes that green building is the future and not just a fad and provides the numbers to back it up. Between 2005 and 2010, a period when many architectural and construction companies went out of business, he showed that expenditures on Green building increased from
$10 to $60 billion.
The GBLC presentation continued with Robert Politzner, president of Greenstreet Building and early pioneer in the field of green building, speaking from the point of view of the general contractor. Robert is a passionate believer that the cost of a unit of carbon-based energy sources has been kept artificially low when compared to renewable energy sources. This is a result of continuing government subsidies to fossil fuel energy sources along with powerful industry opposition to a carbon tax that would seek to include the cost of externalities, such as pollution, in the price of a unit of gas. Politzner agreed completely with Kliwinski’s assertion that the most critical requirement for successfully building green on a budget is integration.
Politzner also mentioned several additional reasons for the generally accepted, but no longer accurate, notion that green building is expensive and a luxury that only the affluent can afford. These reasons included, until recently, a shortage of building trade workers with experience using green materials; combined with the fact that a general contractor typically has a three-week period in which to bid on a construction job. As a
result of this lack of experience and compressed time frame for bidding, the contractors are tend to be conservative about making what could be a costly error, especially if they are not well versed in green construction.
Politzner believes that over the past several years a critical economic tipping point has occurred. The recession and the resulting surplus of unemployed trade workers has increased the supply of skilled providers of solar panels and other green products. This has increased the willingness of contractors to take a risk and build green. Combined with improvements in solar panels and efficiencies that have lowered the cost of their manufacture, the cost of solar energy production has decreased from $8k-10k to $4k-5k per Kw over the past five years. As a result, in the past two years Politzner and Kliwinski reported seeing a market shift where the cost of solar in the northeast is now cheaper than traditional sources. Kliwinski said there are regional cost differences, but in the northeast, integration of geothermal, solar, green roofs and rain water catchment can and do make strong financial sense.
Jason and Robert concluded the team’s presentation saying that that the cost of building new green buildings will continue to fall, but ultimately, if climate change is to be reversed the existing building stock must also be made more energy efficient. Jason said that we know how to do this cost-effectively today with a short payback period. However one big problem is financial because the “cap-ex and op-ex people do not
speak to each other.” He said investors who understand this are making returns of 5-6% per year.
In addition to designing and building high performance buildings, the three partners kept stating that the primary purpose of the GLBC is education and collaboration. I believe that there are a number of opportunities for EAC members to collaborate with the GLBC leaders, and the resulting entrepreneurial opportunities may be among the most financially rewarding available today, So If you are an EAC member who is working to develop businesses offering CHP or other alternative energy cost savings to building owners, I strongly recommend that you explore collaborating with the founders of GLBC. I also believe there is a big financial reward awaiting the financial/banking entrepreneur who develops and successfully markets the investment mechanism to finance the green retrofitting of the existing commercial building stock.
Acknowledging the left-leaning political connotation that the word “green” has acquired, Politzner suggested that the word, “smart,” should be substituted for “green,” because the emerging business case for building green is “as American as apple pie.”