Green Building Technologies
- Lead Faculty: Michael Gevelber, Robert Kaufmann, Nalin Kulatilaka
Our research team of faculty and students at Boston University, along with industry partners seek to find business mechanisms that can accelerate investments in green technologies in the built environment. With over 40% of total U.S. energy consumption being related the to construction or operation of building, this sector offers tremendous opportunities for efficiency improvements and on-site renewable energy generation. Consequently, our effort can have a far-reaching impact on the quest for energy independence while addressing environmental concerns and fostering economic growth.
There is a wide array of old and new technologies available for use in buildings. Yet, their adoption has been slow due to the high transactions costs of transitioning from our legacy building systems, construction methods, and habits. A number of market failures (missing markets for green house gases, inadequate reflection of green building attributes in housing prices, and information gaps that lead to inefficient operation of buildings) prevent investors from realizing the full value of investments. Uncertainty surrounding future energy prices, technology innovations, and policy regimes further stifle investment incentives.
We believe recent innovations in markets and technologies and climate change mitigation policies present a unique opportunity for businesses to act to overcome these obstacles. Although solutions must be tailored to local conditions, our research looks for general principles that can be used to mitigate the agency problems and link new markets to opportunities. Through the design of new contracts and business models we seek to identify new ways to finance green investments.
Research Project Components:
• A baseline analysis modeling the current building environment, forming metrics that remove effects due to weather and energy prices, and isolating the effects of the building characteristics and user behavior. We will establish mechanisms to measure and monitor the post-investment performance improvements.
• A product, technology, and design analysis to match solutions that deliver the greatest benefit to each building environment and context. This allows us to understand the cost implications and build budgets that meet the objectives of specific real estate environments.
• An analysis of financial structures that can monetize improvements in building efficiency. Elements of this include future energy savings and tax credits, and credits from carbon reduction, contributions to renewable portfolio standards, and peak shifting capabilities. By trading these credits on the emerging climate markets the revenue stream can be used as collateral when sourcing capital.
Much of the value generated by this working group is derived from close working relationships with our team of industry partners. Our current partners include Cambridge Housing Authority, Boston University, Facilities Management, Ryan Solutions LLC, and EnerNoc.
Industry Partners and Research Opportunities
We are actively seeking additional partners with expertise in architecture, construction, green building materials, smart metering and building controls, HVAC systems, building operations, and financing.
