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Financial and Systemic Barriers and Solutions to Scaling Energy Retrofits in Commercial Buildings

Retrofitting commercial buildings lags far behind what is needed to reach climate targets, despite the demonstrated high paybacks and the plethora of financing solutions. A structural analysis of t…

exterior shot of an office building windows lit up at night, with workers silhouetted inside

Retrofitting commercial buildings lags far behind what is needed to reach climate targets, despite the demonstrated high paybacks and the plethora of financing solutions. A structural analysis of the commercial real estate industry reveals that the barriers to efficiency are not simply costs but also the divided interests of the many companies involved in the industry, the internal politics of these companies, and the short-term profit-seeking nature of the many investors involved in a single building over time. We detail the financial mechanisms that have been developed thus far to enable the scaling of retrofits, and how these solutions have fallen short of accomplishing market transformation. We then prescribe methods to encourage the adoption of retrofits in commercial buildings. These consist of strategic partnerships, methods of information sharing, and policies aimed at uniting the disparate incentives of market actors.

 

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