Life Cycle Analysis

LEED 2012 Review Period

Michael recently drew your attention to the LEED Pilot Credit Library. It is full of interesting new credits to which your product may contribute. Now that the comment period for LEED 2012 is nearly over, it is time to see which of these creative new credits will be elbowing out your old favorites. You may be pleasantly - or unpleasantly - surprised.

The conversion that shocked me most was the transformation of several Materials and Resources credits into a new "Material Life Cycle Disclosure and Assessment" credit. If you're accustomed to declaring your product's recycled content, you may need to make some changes to how you source that content. Recycled content will be required to come from manufacturers with closed-loop systems. That is, you, the manufacturer, need to accept your own products or similar products back into the manufacturing stream for recycling. Some carpet manufacturers have reclamation programs in place, but it may be a challenge for other manufacturers to contribute to this credit.

The good news is that all kinds of disclosure and life cycle assessment (LCA) credit opportunities are part of the"Material Life Cycle Disclosure and Assessment" credit. If you know where your materials originate and what they contain, and you are willing to disclose that information, you may be able to open this credit back up for your company.

Some credits substantially change: two are the "Rapidly Renewable Materials" and "Certified Wood" credits. Both are now part of "Responsible Extraction of Raw Materials." See BuildingGreen's analysis of how FSC certified wood is rewarded in LEED 2012. "Regional Materials" is replaced by "Support Local Economy".

I urge you to see for yourself what advantages and disadvantages the new LEED rating systems hold for your company. By all means, comment on the changes, as they are not yet set in stone. Contact us for help with your sourcing, production and marketing strategies for LEED 2012.

Computer-Based Systems Integration

This is an encore of an article Michael Chusid wrote twenty years ago. Looking back, it is encouraging to see that many of the advances predicted then have now become part of every day design and construction practice. Yet fundamental challenges about improving communication and project quality still remain.

For many architects, integration of computer-based systems still means figuring out which end of the cable plugs into their personal computer. But the topic was given much greater meaning at the First International Symposium on Building Systems Automation-Integration held in June at the University of Wisconsin-Madison. This week-long conference, initiated by Varkie Thomas of the Chicago office of Skidmore Owings B Merrill, was devoted to "the integration of computer-based systems for planning, design, construction, and operation of buildings." The conference offered bold predictions for computer technology and its effect on architecture.

While an increasing number of architectural and construction tasks employ computers, the Symposium identified two major barriers preventing computer-aided design from achieving even greater productivity. First, computers have been applied essentially as "electronic pencils," speeding up manual processes but not changing the nature of the tasks. For example, specification are written as though word processors are just fancy typewriters and CAD drawings replicate the types of lines and abstractions used in traditional drafting. Second, computerized information is still transferred from one application to another by manual methods, leading to increased costs  and errors in data processing. For example, it is rare for an architect's CAD file to be passed along for a contractor to use in construction engineering, and electronic product data are not passed along to owners for use in automated facility management. To overcome these barriers, conference participants presented an amazing variety of new computer-based systems and concepts that are already available or under development in laboratories around the world. They also called for new paradigms, based on integration of information and the building team, for the organizational structure of the building industries.

Computers and Practice
Many designers still practice what Tor Syzertsen from the Norwegian Institute of Technology called "Pencil and Paper-Aided Design (PPAD)." But he predicted that computers will soon be such an intrinsic part of architecture that we will drop the phrase "Computer-Aided" from our description of design. He called for the creation of "knowbots" to automate routine architectural tasks, many examples of which were presented during the week-long conference.

The Intelligent Design Checker, for example, can review a set of drawings for compliance with bullding codes and other standards. Nayel Shafei from Prime Computers, Inc., described how the New York State Facilities Development Corporation uses the program to check compliance of hospital designs with National Fire Protection Association standards and the New York State Life Safety Code. The Checker flagged so many violations in drawings submitted for final approval that the Facilities Development Corporation now requires architects to run the program during the design phase of projects, when corrections can be more easily made.

Architects typically design a building envelope and then pass it to mechanical engineers for an energy-use evaluation. This results in slow and costly iteration of design between architects and engineers. To improve this situation, both Larry Degelman of Texas A&M University and Edna Shaviv of the Israel Institute of Technology presented expert systems that integrate energy analysis and architectural design. Their systems allow architects to visualize buildings in 3D and simultaneously receive feedback on the energy consequences of design decisions. Both are using knowledge-based programs to suggest U-values, window placement, and design strategies to satisfy energy-code constraints.

Mehdi Khalvati from ASG explained that CAD programs could become "integrated architectural systems." ASG software, which runs with AutoCAD, links graphic information to specification writing, cost estimating, and product information. In a software package that ASG distributes for Boise Cascade, wood beams are treated as objects that contain information about their performance characteristics and limitations rather than just as lines; the program can automatically size and arrange wood floor framing members.

Expanding upon this theme, a team from Carnegie Mellon University demonstrated ARMILLA, which incorporates expert systems with a CAD drawing tool to aid the design of a building's structural, HVAC, plumbing, and other systems. A knowledge-base of engineering rules automatically makes trade-offs to coordinate the placement of beams, ducts, and risers.

New Models for Architects
Traditional architectural drawings, even those produced with the latest 3D CAD programs, are abstract geometrical representations of building components; the meaning of the lines is determined by the architect.

Computerized models, on the other hand, are constructed of "object-oriented" representations of each building space and component. "Object-oriented" is the computer equivalent of the architectural concern for the nature of materials; it is Louis Kahn's asking a material what it "wants to be." Object-oriented databases key building elements to information about what they are, their performance, and their relationships with other objects. Objects interact with each other according to knowledge-based rules and constraints. "Self-knowledge" enables objects to assert themselves to automatically generate designs or construction and facility management reports. Instead of the static abstraction of traditional drawings, this kind of computer model portrays a virtual reality that responds to changes in materials and conditions as would real buildings.

Visualization Software that creates photographic-quality 3D pictures of buildings will be valuable for both client presentations and as construction planning tools. Simulations will enable designers and owners to predict operating loads more accurately and to optimize the structure's performance by adjusting for varying conditions, thus reducing the need to over compensate for safety factors. And as new user interfaces are refined, architects may find themselves working in cyberspace environments that convey the illusion of being able to manipulate computer-generated items in the actual space.

Other developments in computer science presented at the Symposium that may affect architectural practice include neural nets, hypertext, artificial intelligence, and multimedia. Anticipation of these tools led to heated discussion about where the ultimate boundaries between human and machine capabilities might be. Some argued that creativity and aesthetics were not feasible or appropriate uses of computers. Shaviv countered with the example of a student with no architectural training who developed a program to draw housing plans based on code restrictions and a set of rules defining spatial relationships. "Some of the schemes the computer made were of great originality and beauty, designs a trained architect would never have dreamed of." Others argued that computers could stimulate human creativity by freeing designers from routine chores and presenting a greater range of options for them to consider. One software developer believed human intuition will remain an essential part of architecture; his program includes a "help key" that provides information unrelated to the task at hand to stimulate the user to make problem-solving breakthroughs.

The Need for a Standard
Developing the standard code necessary for object-oriented models will be an enormous undertaking and may not be practical in a fragmented industry that supports a multitude of incompatible computer and software systems. To overcome this, the Symposium struggled with standards and technical guidelines for exchanging computer generated information directly between systems and across the building industry. Current exchange protocols like the Initial Graphics Exchange Specification (IGES) and AutoDesk's DXF format primarily exchange geometrical drawing data. New standards are required to accommodate the richer information environment of object-oriented models.

The leading proposed standard is the Standard for The Exchange of Product Model Data (STEP). STEP is being coordinated by the International Organization for Standardization (ISO) and by the Product Data Exchange (PDES) in the United States. A PDES  brochure explains that STEP "will provide a complete, unambiguous, computer interpretable definition of the physical and functional characteristics of each unit of a product throughout its life cycle. (It) will enable communications among heterogeneous computer environments; integration of systems that support design, manufacturing and logistic function/processes; and support automatic, paperless updates of system documentation."

Development of a comprehensive data exchange standard will be extremely costly but is of paramount importance to automation and integration; but funding for the construction industry's effort is problematic. Participants in the Symposium, however, felt that development of STEP is of such importance to United States competitiveness in global construction that they called for a government effort comparable to the building of the Interstate Highway system. "Who will be the President Eisenhower to make it happen?" one participant asked.

Life-Cycle Models
The ability to share a common building model will change the organization of building projects. Duvvuru Sriram from MIT called current design methods over-the-wall engineering. "The architect works on a design and then throws it over the wall to an engineer. The project is thrown over the wall to a contractor who uses the drawings as a sketchpad to figure out how the building will really be built, and it is eventually thrown to the building owner who has to figure out how to operate the facility." He proposed a knowledge-based management system and distributed databases that would facilitate collaborative design among all building team members.

Information must also be managed so that it has value throughout the life-cycle of a building. As information is gathered, from the earliest planning stages through demolition, it should be sorted for value and stored in an accessible electronic form. Instead of merely automating current procedures, every part of architectural practice must be reassessed While putting product catalogs on to computer diskettes is a necessary first step, we should not lose sight of the need for an Electronic Data Interchange (EDI) system so that product data can flow directly from a manufacturer's catalog into a project database and then back into a manufacturer's production scheduling program without the time and expense of shop drawings. Owners will start demanding computer models for use in space planning, energy management, preventive maintenance, and operating systems; the quality of a building's database will be an asset they can carry to their bottom line.

The complexities of modern construction have created building teams with experts in many fields. Future architects may be able to work with fewer consultants as expert systems become more powerful and electric databases provide easier access to specialized information. This should lead to leaner and more productive building teams, but will require new approaches to architectural education and Practice. Ron Wooldridge of The Locke Group warned that "the good news is that 45 architects with computers will be able to do the work 50 people working manually. The bad news is that the 45 may not be a subset of the current 50." He urged architects to use integration and automation to add value to their work and to develop the knowledge-based systems and databases that would enable their firms to regain competitiveness.

The final advice from the Symposium is to not become too married to the current generation of AEC computers and applications. Rapid changes are coming that may make your personal computer as obsolete as a slide rule. Firms that accept the challenge of automation and integration will have to weather a turbulent period of industry and professional realignment, but are likely to emerge more competitive then before.

Have a question you'd like us to answer?
Send an email to michaelchusid@chusid.com 

By Michael Chusid, originally published in Progressive Architecture, ©1991

Life-cycle assessments of products

This is an encore of an article Michael Chusid wrote 20 years ago. To a limited extent, increased attention to environmental sustainability have increased focus on life cycle performance of buildings. LEED, for example, requires buildings to be commissioned to ascertain that mechanical systems perform as required. Also, the "cradle-to-cradle" concept encourages examination of the flow of materials from extraction to re-purposing.


Operational costs typically, 
exceed construction costs.

Tools that can help architects make life-cycle assessments of products

The architectural community too often disregards the life-cycle costs and operation of buildings. This attitude is not expressed overtly but nonetheless permeates architectural practice:
  • We grovel before a project's bid price and all but disregard a building's cash flow, the streams of operational and maintenance expenses, financing, revenue and tax consequences, which spell economic success or failure to a building owner. 
  • When designing an addition or renovation, we too often fail to involve the building's maintenance staff in a serious discussion about their resources, schedules, and experience with the building's existing materials and systems.
  • We rarely retain qualified building maintenance consultants on our design teams.
  • And frequently, we pass along a hodgepodge of submittals and call it an Operation and Maintenance Manual without considering whether the accumulation really communicates.
Over the economic life of a building, operation and maintenance costs will typically equal or exceed first costs. And when we consider how a maintenance program can affect a building's resale or salvage value, the importance of building maintainability becomes even more apparent.

Building Economics
Building design and product selection decisions should be made with benefit of life-cycle cost analysis. Recently issued ASTM standards provide the building industry with clear guidelines for performing an economic analysis of building designs and components. In a life-cycle cost study, each future cash flow must be adjusted for anticipated inflation and escalation and then discounted to a present value. When performed manually, these time-consuming calculations limit the use of life-cycle cost analysis. New computer-based programs, however, make it much easier to conduct life-cycle installations.

Even though calculations have been simplified, a building life-cycle cost investigation still remains difficult because reliable data on product longevity, maintenance schedules, and operation and maintenance expenses are difficult to obtain. How soon will a roof really be repaired or replaced? How frequently will various types of door operators require servicing? How will the selection of a sealant or weatherstripping affect energy use? Such information is not contained in the typical references found in an architectural office, but a new family of facility management publications and references is beginning to fill this gap. For example, Means Facilities Maintenance Standards [now out of date] discusses the mechanisms that contribute to building deterioration, and building maintenance scheduling and management.

Architects must also take more initiative to discuss maintenance issues with their clients and consultants and to collect and analyze the maintenance history of their buildings. This information must then be transmitted to the drafters and specifiers who actually make product decisions.

Product Data
Although building product manufacturers and trade associations are a primary source of product information, few offer well documented data on their product's life-cycle performance, offering only inconclusive laboratory testing or anecdotal case studies to document their claims. They claim they are unable to predict a product's life-cycle because of conditions beyond a manufacturer's control, such as environmental conditions or maintenance procedures. Yet these variables can be quantified and applied to a sampling of historic product performance data. The resulting analysis could be used as a valid basis for predicting product performance and comparing product alternatives.

Some manufacturers have responded to the need for better information about product life-cycle costs. USG Interiors, Inc., for example, offers a computerized comparison of relocatable partitions and drywall partitions. called DesignAid for Walls, the program enables a designer to consider the economic impact of partition relocation, financing alternatives, tax benefits and accelerated depreciation, and the escalation of waste disposal costs associated with drywall partition remodeling. A similar USG DesignAid program compares several floor construction and wire distribution systems to determine life-cycle costs vis-a-vis workstation relocation. [Chusid Associates wrote both DesignAid programs.]

Building productivity is
also a life cycle factor.

Operational Assurance
Since many architects assume "building maintenance" means "janitorial services" or occasional redecorating, it would be useful to introduce a new term into our professional patois. "Operational assurance" is a concept more familiar to industrial engineers who must assure that manufacturing equipment is kept at optimum operating capacity. An operational assurance approach to buildings must consider the building operational goals and specify systems and products in view of their longevity and the ease and cost of their maintenance, repair, and replacement. Operational assurance can be applied not just to mechanical and electrical systems, but to the building envelope, finishes, and other architectural components as well.

Capability in operational assurance planning would enable an architectural or engineering firm to differentiate itself from its competitors and position itself for growth in industrial, commercial, or institutional markets. Maintenance programming, value engineering, training of the building staff, and post-occupancy evaluation also could be lucrative extended services and could lead to a continuing relationship with a client.

Have a question you'd like us to answer?
Send an email to michaelchusid@chusid.com 

By Michael Chusid, Originally published in Progressive Architecture, ©1991.

Use long-term cost benefits to your advantage

This is an encore presentation of an article Michael Chusid wrote about 20 years ago. It's message is still current.
 
I often encounter price resistance when selling my company’s top-of-the-line building products. Even though I explain that the product lasts longer and has lower operating costs, many customers can’t see past the initial costs. How can I overcome this sticker shock?—D. N. S. , sales manager

Developers and building owners think of their projects as an investment. In addition to construction costs, they analyze operating costs, potential income, and resale value. To overcome price resistance, present your product as an investment instead of an expense.

In some cases, this can be done by focusing on how your product adds value to a building. Developers recognize this principle when they spend extra on building finishes or fashionable interiors. Their investment is repaid by making it easier to sell the property or attract higher rental income.

Other products can be positioned as expenses necessary to protect a property’s income potential. A major hotel chain, for example, invests in backup air-conditioning equipment because they realize their inventory of rooms is worthless if they can’t guarantee comfort.

Tout up-front savings
Another approach is to emphasize the “first cost” of your product. In addition to purchase price, this includes the design, construction, and financing costs necessary to put your product into service. You can sell the first-cost benefits of your product if, for example, it costs less to install or enables faster completion of a project.

A still broader view of costs is a lifecycle cost analysis, which considers the cost of owning a product, not just purchasing it. This is significant because the total of a building’s maintenance, energy, insurance, tax, interest, and other ownership expenses usually exceed construction costs.

Life-cycle affordability is key
Life-cycle cost analysis has long been used by mechanical engineers; it is fairly simple to compare the cost of additional insulation or more-efficient equipment to projected energy savings. But in recent years, life-cycle affordability has become increasingly important. Environmental concerns, for example, have shifted attention from construction costs to issues such as energy consumption and building materials disposal. Institutions like the Army Corps of Engineers have begun to require life-cycle cost analyses of proposed projects. A recent publication from the American Society for Testing and Materials, ASTM Standards on Building Economics, establishes procedures for investigating the life-cycle costs of building materials. And computer programs have simplified the extensive number crunching required for life-cycle cost calculations.

Many manufacturers claim life-cycle benefits in their advertising, using bar charts to show how their products’ costs compare to competitors. Such claims have more impact if your customers can examine the supporting data. You can use computerized presentations to show them results for a specific product.

USG Interiors is one company that uses computerized life-cycle cost analyses to position its relocatable office partitions against lower priced conventional drywall partitions. The program considers such variables as the client’s tax bracket, material and labor costs, project size and complexity, mortgage terms, and the accelerated depreciation allowed to relocatable partitions. It also asks the customer how often remodeling will occur. The program then compares the life-cycle benefit of USG’s reusable partitions with the demolition costs of removing drywall partitions. This gives USG a powerful sales tool to use with financially oriented customers who may not perceive the product’s technical or aesthetic benefits. In addition, getting the customer to say yes to all the input data increases his acceptance of the program’s conclusions.
From a life-cycle cost analysis prepared by Chusid Associates.
Are your products priced right?
Conducting a life-cycle cost analysis for your product can be a fruitful marketing exercise. For example, do you know what factors most affect the affordability of your product and your competitors’ products? Can you substantiate product durability or quantify maintenance costs? Would your products be more affordable if there were more demand for salvaged or recycled components?

A life-cycle cost investigation I once conducted for a water-conserving plumbing system helped the manufacturer establish a competitive price for its product. Another time I compared the life-cycle costs of 12 roofing systems. Even though my client’s roofing system had outstanding durability, the study showed its high initial cost was not offset by low life-cycle maintenance costs. This insight helped clarify the manufacturer’s marketing alternatives.

While life-cycle costs can be an important sales tool, you must still tailor your presentation to each individual customer. Many price objections are simple requests for more information or reassurances. Other objections may be based on unquantifiable concerns about performance, appearance, or reliability. Bringing out a technical looking spreadsheet could confuse some customers or miss their main concerns.

For some customers, delivering a job for the lowest initial cost will always outweigh life-cycle considerations. But in other cases, a life-cycle cost argument may be just what is needed to close a sale. It can help customers justify to themselves or to their clients the decision to use a more expensive product. Or it can be a subtle way of pointing out a competitor’s shortcomings. Most importantly, it can change the focus of a sales presentation from the cost of your product to the value of your product.


Have a question you'd like us to answer?
Send an email to michaelchusid@chusid.com 

By Michael Chusid. Originally published in Construction Marketing Today, Copyright © 1994

Deferred Maintenance

This news reported by College Planning and Management.
Less money being allocated for maintaining facilities increases workloads, safety concerns, and liability. Colleges and universities across the country are also feeling the pinch; the University of Louisiana at Monroe eliminated 29 maintenance and repair positions at the end of their fiscal year because of continuing state budget cuts. The University System of Georgia has been asked to submit 4, 6, and 8 percent budget reduction plans for the 2011 fiscal year. According to university officials the general repair and operating status of the buildings themselves will begin to deteriorate. If the cuts happen there will be a very visible impact on the way the campus looks and operates.
If this trend continues, I foresee two opportunities for building product manufacturers:
  1. Institutions are already able to look at life cycle costing when evaluating construction materials. The decline in maintenance resources may shift the calculus in favor of even more durable products that offer further maintenance economies.
  2. Deferred maintenance invariably ends up creating bigger problems such as the need for roof or equipment replacement.
  3. As the universities reduce their staff, they will be outsourcing more of their maintenance requirements, so manufacturers will have the opportunity to get service contracts.

Make sure your marketing and sales teams are alert to opportunities.

Tax Benefits for Designers

Tax benefits can be a powerful tool for promoting certain building products. Chusid Associates, for example, has worked with producers of demountable partitions and access flooring systems to explain how the accelerated depreciation of these products can create bottom line benefits for a building owner.

The following article, reposted from the
Xella (producers of Hebel autoclaved aerated concrete) website, explains a little know tax benefit that can accrue to design professionals:

The Federal tax laws provide a significant tax benefit for designers of energy-efficient commercial buildings for public entities, such as government buildings and public schools. A designer such as an architect, engineer, contractor, environmental consultant or energy services provider who creates the technical specifications can deduct the cost to the public entity of “energy-efficient commercial building property expenditures” up to a cap of $1.80 per square foot of the energy-efficient commercial building property expenditures that are made.[1]

The deduction is allowed in the year in which the property is placed in service and is in lieu of depreciating the amounts qualifying for the deduction over 39 years.[2] .The tax laws define energy-efficient commercial building expenditures as property:

  1. Installed on or in any building located in the United States that is within the scope of Standard 90.1-2001 of the American Society of Heating, Refrigerating, and Air Conditioning Engineers and the Illuminating Engineering Society of North America,
  2. Installed as part of (i) the interior lighting systems, (ii) the heating, cooling, ventilation, and hot water systems, or (iii) the building envelope, and
  3. Certified as being installed as part of a plan designed to reduce the total annual energy and power costs with respect to the interior lighting systems, heating, cooling, ventilation, and hot water systems of the building by 50 percent or more in comparison to a reference building which meets the minimum requirements of Standard 90.1-2001 (as in effect on April 2, 2003).[1]
This deduction generally is available to owners of buildings. However, because the owners public buildings, such as schools and government offices do not generally pay taxes, the tax laws provide a special rule allowing the owners to pass the benefit through to the designer. If there is more than one designer, the governmental owner of the building can allocate the full deduction to one designer that is primarily responsible for the design or, at the owner's discretion, allocate the deduction among several designers. The governmental owner of the public building is not required to include any amount in income on account of the deduction allocated to the designer, but is required to reduce the basis of the property by the amount of the deduction allocated. Note that a person who installs, repairs, or maintains the property is not a designer.[3]

Hebel AAC’s energy-efficient properties help meet their requirement for this tax-deduction credit level. Its unique closed cellular structure and thermal mass contribute to a high R-value and air-tightness, which reduce heating and cooling costs and improve indoor air quality. Buildings using Hebel Autoclaved Aerated Concrete have seen up to a 35 percent decrease in cooling costs.

In the case of a building that does not meet the overall building requirement of a 50-percent energy saving, a partial deduction is allowed with respect to each separate building system: (1) the interior lighting system, (2) the heating, cooling, ventilation and hot water systems, and (3) the building envelope. The maximum allowable deduction is $0.60 per square foot for each separate system.

Case in Point 1: 50% Energy Savings A school spends $200,000 in qualifying costs on a new 100,000 square feet, energy-efficient building using Hebel AAC. 100,000 sq. ft. X $1.80 = $180,000 Tax Deduction to the Designer

Case in Point 2: <50%> Same school as above, yet only the Hebel AAC building envelope qualifies. 100,000 sq. ft. X $.060= $60,000 Tax Deduction to the Designer
Certain certification requirements must be met in order to qualify for the deduction. The IRS has published guidance concerning how to meet these requirements.[4] In general, these calculations must be performed using energy simulation models found in computer software approved in the guidance and not by measuring actual electricity usage. Under this guidance, calculations are made by comparison to a reference building that is based on a building that is located in the same climate zone as the taxpayer's building and is otherwise comparable to the taxpayer's building except that its interior lighting systems, heating, cooling, ventilation, and hot water systems, and building envelope meet the minimum requirements of Standard 90.1-2001. Calculations must be certified by a licensed professional engineer or contractor that is not related to the taxpayer and meets certain other tests.

In determining energy and power cost savings for purposes of partial deduction described above for an energy efficient building envelope, the proposed building is a building that contains the building envelope that has been incorporated, or that the taxpayer plans to incorporate, into the taxpayer's building but that is otherwise identical to the reference building.

The deduction is effective for property placed in service after December 31, 2005 and prior to December 31, 2013.[5]

It may be possible to meet the energy efficiency standards set forth above using Hebel AAC.

Please consult your own tax advisor to determine whether your project can qualify for this significant tax benefit. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice that may be contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding any penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction(s) or tax-related matter(s) that may be addressed herein.

Notice 2006-52 can be found: http://www.irs.gov/pub/irs-drop/n-06-52.pdf
Notice 2008-40 can be found: http://www.irs.gov/irb/2008-14_IRB/ar12.html
--------------------------
[1] Code section 179D(d)(4); Notice 2008-40, 2008-14 I.R.B. 725.
[2] Code section 179D.
[3] Notice 2008-40, section 3.
[4] Notice 2006-52, 2006-26 I.R.B. 1175, clarified and amplified, Notice 2008-40.
[5] Code section 179D(h).

COMMENT

The specification of a single building product does not, by itself, qualify a project for this tax credit. The credit requires the design of energy efficiency into an overall building project. Still, building product manufacturers can gain from understanding and explaining how their product contributes to the overall result.

Contact Chusid Associates to explore whether this law can benefit your company and to discuss the best way to incorporate it into your marketing program.

What California's Green Building Code means to building product manufacturers

This week , the California Building Standards Commission unanimously adopted mandatory Green Building Standards Code (CALGREEN) requiring all new buildings in the state to be more energy efficient and environmentally responsible. Taking effect on January 1, 2011, these comprehensive regulations will achieve major reductions in greenhouse gas emissions, energy consumption and water use. This will have a profound impact on many categories of building products. California is often a barometer for trends in other states, so this is significant regardless of where you firm does business.

Chusid Associates is offering a FREE CONSULTATION to building product manufacturers who wish to better understand the potential impact of this new code.

The State anticipates the new code will help meet its goals of curbing global warming and achieving 33 percent renewable energy by 2020 and promoteing development of more sustainable communities by reducing greenhouse gas emissions and improving energy efficiency in every new home, office building or public structure.

Among the new requirements, CALGREEN will require that every new building constructed in California:
  • Reduce water consumption by 20 percent,
  • Divert 50 percent of construction waste from landfills,
  • Install low pollutant-emitting materials.
  • Requires separate water meters for nonresidential buildings’ indoor and outdoor water use,
  • Requirement for moisture-sensing irrigation systems for larger landscape projects
  • Mandatory inspections of energy systems (e.g., heat furnace, air conditioner and mechanical equipment) for nonresidential buildings over 10,000 square feet to ensure that all are working at their maximum capacity and according to their design efficiencies.
The state anticipates raising the bar further as time passes, and includes provisions to encourage local communities to take further action to green their buildings to reduce greenhouse gas emissions, improve energy efficiency and conserve our natural resources.

CALGREEN provisions will be inspected and verified by local and state building departments. Upon passing state building inspection, California’s property owners will have the ability to label their facilities as CALGREEN compliant without using additional costly third-party certification programs.

Click here for additional information about CALGREEN. Click here to download a draft of the new code. And contact Chusid Associates for your FREE CONSULTATION.

Words That Sell

While I dare say that most architects have not actually read John Ruskin's 19th Century book of architectural criticism, The Stones of Venice, but they all know his name. This quote may have seemed quaint during recent decades of throwaway buildings, but it may be coming back into fashion in a more environmental age:

"When we build, let us think that we build forever. Let it not be for present delight nor for present use alone. Let it be such work as our descendants will thank us for; and let us think, as we lay stone on stone, that in a is to come when those stones will be held sacred because our hands have touched them, and that people will say, as they look upon the labor and wrought substance of them, 'See! This our parents did for us.'"