HOW TO CALCULATE AND PRESENT DEEP RETROFIT VALUE

The document argues that deep energy retrofits—those reducing energy consumption by 50% or more—generate significant, often overlooked business value. It introduces the RMI Retrofit Value Model, which categorizes this value into nine elements: retrofit development costs, non-energy property operating costs, retrofit risk mitigation, health costs, employee costs, promotions and marketing costs, customer access and sales, property-derived revenues, and enterprise risk management. The guide provides methodologies for quantifying these benefits, such as calculating reduced absenteeism and improved worker productivity, and offers a sample report to demonstrate how to synthesize these findings for capital requests. It concludes with best practices for risk mitigation and principles for presenting value to decision-makers.

• Deep energy retrofits are defined as projects that achieve superior energy savings over conventional retrofits, often reducing a building’s energy consumption by "50 percent or more".
• The RMI Retrofit Value Model identifies nine discrete value elements beyond energy savings: Retrofit Development Costs, Non-Energy Property Operating Costs, Retrofit Risk Mitigation, Health Costs, Employee Costs, Promotions and Marketing Costs, Customer Access and Sales, Property-Derived Revenues, and Enterprise Risk Management/Mitigation.
• Deep retrofits can lower non-energy operating costs through reduced maintenance, water use, and insurance premiums. For example, LEED for Existing Buildings (LEED-EB) properties showed a median maintenance and repair cost of "$1.17 per square foot" compared to a regional average of "$1.52 per square foot".
• Improved indoor environmental quality from retrofits can significantly reduce employee absenteeism. Evidence cited includes a study of 31 green buildings in Seattle where absenteeism was "reduced by 40 percent".
• Deep retrofits can reduce employee costs by improving recruiting and retention. The guide notes that the full cost of replacing an employee is often estimated at "one and a half times their annual salary".
• Sustainable buildings can command premiums in rent, occupancy, and sale price. The guide cites various studies showing rental premiums for LEED buildings ranging from "3%" to "17%" and sale price premiums from "10%" to "26%".
• Retrofit risk can be mitigated through traditional insurance, specialized green building due diligence, and the execution of RMI's 27 life-cycle retrofit best practices.
• Deep retrofits can offset initial capital costs through government and utility subsidies, including tax credits, grants, and subsidized lending such as Property Assessed Clean Energy (PACE) loans.
• The guide emphasizes that presenting value as a supplement to traditional energy-cost analysis can shift the financial viability of a project; in its sample report, a project with a negative NPV based on energy alone became highly profitable when non-energy values were included.

APA

Bendewald, M., Hutchinson, R. “., Muldavin, S., & Torbert, R. (2014). HOW TO CALCULATE AND PRESENT DEEP RETROFIT VALUE. RMI. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_RMIDeepRetrofitValue_January2014_2014-01.pdf

Chicago

Bendewald, Michael, Robert “Hutch” Hutchinson, Scott Muldavin, and Roy Torbert. HOW TO CALCULATE AND PRESENT DEEP RETROFIT VALUE. RMI, 2014. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_RMIDeepRetrofitValue_January2014_2014-01.pdf.

Wikipedia

{{cite report |last1=Bendewald |first1=Michael |last2=Hutchinson |first2=Robert “Hutch” |last3=Muldavin |first3=Scott |last4=Torbert |first4=Roy |title=HOW TO CALCULATE AND PRESENT DEEP RETROFIT VALUE |publisher=RMI |date=January 2014 |url=https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_RMIDeepRetrofitValue_January2014_2014-01.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bendewald2014how, author = {Bendewald, Michael and Hutchinson, Robert “Hutch” and Muldavin, Scott and Torbert, Roy}, title = {{HOW TO CALCULATE AND PRESENT DEEP RETROFIT VALUE}}, institution = {RMI}, year = {2014}, month = jan, url = {https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_RMIDeepRetrofitValue_January2014_2014-01.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }