Issue link: https://resources.tangoanalytics.com/i/1508313
Fuel switching or electrification is the main driver of decarbonization in buildings. This largely refers to switching space and water heating from gas or propane-powered appliances to electric alternatives, such as heat pumps. This electricity, however, must come from low-carbon sources, and property owners should commit to purchasing an increasing share of their electricity from renewable power for their portfolio. The options for diversifying portfolios with renewable assets is growing, despite the limitations of firm leaders having little to no direct control over decarbonizing their local electric grid. On-site renewable generation: Off-site renewables: 02 — Decarbonization Reducing the carbon intensity of operations Many commercial buildings are suitable for the installation of rooftop solar panels (and even wind turbines), which can provide enormous cost savings in the long run, reduced emissions, and security of price and supply from a local, decentralized energy source. Savvy commercial real estate firms may also consider the potential to sell excess energy back to the grid. 'Positive energy buildings' produce more energy from onsite renewable sources than they consume. Keep in mind that a number of cities are introducing building- specific requirements for renewable energy to be applied to new buildings. In New York, for example, all new buildings and buildings undergoing major roof renovations are required to be covered with solar panels, green roofs, or some combination of the two. In Miami, from 2022, all new buildings (and existing buildings undergoing a major retrofit) are required to be "solar-ready" and " (battery) storage-ready". Power Purchase Agreements (PPAs): Commercial real estate firms can enter into power purchase agreements (PPAs) with renewable energy developers to purchase renewable power for their buildings. Under a PPA, the renewable energy developer builds, owns, and operates the renewable energy project, and sells the power generated by the project to the firm at a fixed price. This option allows commercial real estate firms to access renewable power without the need to invest in on-site renewable energy generation, and it can provide stable and predictable energy costs. Green power purchasing: Commercial real estate firms can purchase green power from their electricity provider to offset the carbon emissions associated with their energy use. Green power is renewable energy that has been certified as being generated from renewable sources, such as wind or solar, and purchasing green power can help firms reduce their carbon footprint and support the development of renewable energy.