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Green Retrofits More Than Pay for Themselves

Retrofitting your company's building to meet LEED standards is an investment that pays dividends.

Times are tough. Perhaps your company can't afford to build or relocate to a new LEED-certified building. But that doesn't mean you have to skip the green upgrade: Even retrofitting your workspace to meet LEED standards can lead to significant improvements in your company's image and bottom line, according to a recent survey by green real estate consultant Charles Lockwood and Deloitte.

In describing one company's motives for a green retrofit, a survey respondent said, "We wanted to make a statement, not only to the people who work for us, but also to the business community and the community in general: 'Hey look, there is a way to be economically responsible to your business and environmentally responsible to your community.' "

Indeed, all of the survey's 16 respondents reported an increase in goodwill and brand equity after implementing a green retrofit, which, as it happens, also results in annual utility cost savings of 10%.

But lower utility bills aren't the only way a green retrofit pays for itself: The healthier environment of a green building reduces employee absenteeism and illness, and increases worker retention. According to Lockwood, when Toyota (TM) - Get Free Report moved into a LEED gold building, absenteeism dropped 14%. At PNC (PNC) - Get Free Report , staff turnover dropped by half compared with standard PNC buildings.

Green buildings also increase employee productivity. For every 1% increase in productivity, employers save $600 to $700 per worker per year, according to Lockwood. On average, he says, employers find that productivity increases by 15% annually after a green retrofit.

Real-life examples

In Denver, Alliance for Sustainable Colorado exchanged the building's T-12 fluorescent lights for more energy-efficient T-8 fluorescent lamps and installed daylight sensors to regulate the amount of electricity used for lighting based on the amount of sunlight coming through the windows. To make the building's HVAC system more efficient, they digitized the controls and made them remotely accessible through the Internet. To cut water use, they replaced toilets and water fixtures with low-flow fixtures.

The results? The energy retrofit (including HVAC and controls) is cutting Alliance for Sustainable Colorado's power bill 8% annually. At a cost of $30,000, the project will pay itself back in five and a half years. The organization's $20,000 water retrofit has reduced water use by 90% a year and will pay itself back in four years. Finally, the $17,000 lighting retrofit is expected to break even in just 2 1/2 years.

Adobe Systems (ADBE) - Get Free Report , on the other hand, shelled out $1.4 million for a green retrofit of its San Jose, California, headquarters, according to Lockwood. Despite a 35% increase in staff, Adobe saw a 35% drop in electricity use, a 41% decline in natural gas use, a 22% reduction in domestic potable water consumption and a 76% reduction in landscape irrigation water use.

So far, the retrofit has generated a 121% return on investment, and the average payback time for each project is just 9 ½ months. The company also received $389,000 in grants and equipment purchase rebates for installing energy-efficient technologies. Plus, the revamped building saves the company $1.2 million in utility costs per year.

Do it yourself

If these projects sound daunting, remember that the beauty of a green retrofit is that it can occur in stages. In fact, your company can use money that's already been budgeted for building maintenance and improvement to start going green.

For instance, "If you need a new roof, install a cool roof rather than a heat-absorbing black one," says Lockwood. "And if you need to re-pave your parking lot, make it cooler by planting trees and using reflective gray-colored asphalt instead of black."

Even better? These choices won't cost any more than standard building materials.

To pursue a green retrofit, first consult an energy auditor, who can analyze your building's energy use and identify opportunities for energy conservation. A LEED-accredited professional can help you retrofit your building to meet LEED standards. And a green building consultant -- such as Phoenix-based Green Ideas or San Francisco-based Simon and Associates Inc. can advise you on all aspects of your green retrofit.