HOW TO CALCULATE AND PRESENT DEEP RETROFIT VALUE

The document argues that deep energy retrofits—defined as integrated measures reducing energy consumption by 30 percent or more—are often undervalued because investors focus solely on energy cost savings. It proposes a 'deep retrofit value' (DRV) approach that incorporates five key value elements: initial development costs, non-energy operating cost reductions (such as maintenance and insurance), risk analysis, tenant-based revenues (via higher rents and occupancy), and increased sales revenues driven by higher net operating income and lower cap rates.

• Deep energy retrofits are defined as an integrated set of energy efficiency measures, often implemented via portfolio-level or multi-year plans, that reduce energy consumption by at least 30 percent relative to pre-retrofit levels while improving sustainability performance.
• Conventional evaluations of retrofits often fail because they focus narrowly on energy cost savings; however, a project with a negative net present value based only on energy savings can be lucrative when other value drivers are included.
• The total value of a deep retrofit is composed of five elements: retrofit development costs, non-energy operating costs (including maintenance, insurance, and occupant churn), retrofit risk analysis, tenant-based revenues (monetized through rents, occupancy, absorption, and retention), and sales revenues (driven by higher net operating income and reduced cap and discount rates).

APA

RMI (2015). HOW TO CALCULATE AND PRESENT DEEP RETROFIT VALUE. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2015-08_RMI-DRVReportHiRes.pdf

Chicago

RMI. HOW TO CALCULATE AND PRESENT DEEP RETROFIT VALUE. 2015. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2015-08_RMI-DRVReportHiRes.pdf.

Wikipedia

{{cite report |author=RMI |title=HOW TO CALCULATE AND PRESENT DEEP RETROFIT VALUE |date=April 2015 |url=https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2015-08_RMI-DRVReportHiRes.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2015how, author = {{RMI}}, title = {{HOW TO CALCULATE AND PRESENT DEEP RETROFIT VALUE}}, institution = {RMI}, year = {2015}, month = apr, url = {https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2015-08_RMI-DRVReportHiRes.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }