I'll start with just one point, which is that when you are presenting an energy-saving project to an owner for approval, oftentimes you'll use a very simple payback analogy. If you say it's going to cost $1 million for this retrofit, rightly or wrongly, a lot of owners will say,“Okay, what's my payback?”
Usually the benchmark is less than three years, and if they're going to get that money back within three years, then it's usually an easy approval. If you think longer-term than that... A three-year payback is a pretty incredible ROI. You could ask why a four- or five-year payback isn't okay. Many will do that if it's the right thing, if they're going to be doing a renovation anyway, but for a million dollars to be paid back in less than three years, you'll have instant approval.
With respect to longer-term operating costs, the number 15% to 20% has come out before. For a lot of the operating costs that I referred to earlier, energy can be a third of that, easily, depending on the type of building. Again, tenants don't want to pay higher operating costs, and if you can start to erode those costs down, then that's a win-win for everybody. As well, a lot of those retrofit costs are called recoverable expenses in buildings too, so owners are incented, because not only are they going to reduce energy consumption but they can also recover the cost of their retrofit. They can still recover that three-year payback from the tenants themselves within their rents.
You couldn't ask for more things to be in place to make it worthwhile to take advantage of doing it. Again, it comes down to tenant satisfaction. If tenants, when they go home at night or they drive by at night, see that the lights are off, they get a good feeling. They feel as though they're not paying for those lights, or they know that the temperature is being turned down.
What tends to happen is that overall comfort in the building improves when people are running the buildings better. When they're starting to think about things like that, during the middle of the day the building is that much better as well.