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Retail Retrofits: The Next Frontier of Green Building

Beth Trask | Thursday 25th June 2009

By Michael Kroon

Many big (and not so big) box retailers are building new "green prototype" stores as part of the LEED (Leadership in Energy and Environmental Design) for Retail pilot program. The most cutting-edge companies have also seized the corollary opportunity: retrofitting their existing stores. Albeit a much more complicated job, retrofitting offers more massive returns simply because there are so many more old stores than new ones.

Now is the best chance to seize the opportunity. Existing buildings can now gain features that have until recently remained the domain of new construction projects. These retrofits include simple installations like solar hot water heaters, low-water plumbing fixtures, day-lighting, waste water reuse, and fixtures and building features made from post consumer/post production waste or rapidly renewable materials.

More ambitious renovators can consider advanced energy management systems, highly efficient insulation/heating-cooling systems, "cool roofs" which reflect solar heat from a building's surface and renewable power generation which can absorb that solar energy as is the case with building-integrated photovoltaics (BIPV).

All of these measures can cultivate consumer relationships, increase property value and save money on operating costs.

Recreational Equipment, Inc. (REI) is a leader in this arena. The company built two prototype stores a new one in Round Rock, Texas, that opened in 2008 and an extensive retrofit in Boulder, Colorado, that reopened in 2007. The Boulder store now consumes 25% less energy and 30% less water than the industry standard.

The company went on to allocate capital for systematic improvements to all of its more than 100 existing stores.

Wal-Mart is also experimenting with retrofits and spreading best practices throughout its stores. To take just one example, the preeminent retailer has logically installed LED lighting in all refrigeration cases because the energy savings pay back the upfront costs very rapidly.

Green is the New Black: Stylish and Smart

For a sector crowned or killed by trends, it behooves retailers to recognize that corporate sustainability is not a fad - it's just good business.

That returns us to the perennial theme of our Innovations Review: these cost savings expand profit margins while benefiting environmental protection and position retailers at the crest of a sea change in consumer conscience.

Consider the following cost savings REI earned through its retrofits:

REI Round Rock's "cool roof" reduces air conditioning usage by 10 to 15%.

Efficient water fixtures reduce stores' water usage by more than 30% at REI Boulder and 40% at REI Round Rock.

Solar hot water systems heat 70% of the water.

HVAC systems reduce energy use by 25%.

Overall, REI Round Rock consumes 48% less energy than a typical store.

At Boulder and Round Rock respectively, about 60 and 80% of construction waste was diverted from landfills

With their dual cost savings and marketing potential, why wouldn't retailers instigate these retrofits?

This is the fifth in a weekly series highlighting 15 green business innovations from Environmental Defense Fund'sInnovations Review 2009

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That's a false choice. Remodeling costs are expected debits in any budget. Intelligent investment in these efficient retrofits holds the key to profit.

For example, REI says it brought down its energy bills significantly due to the low energy demands of the buildings. It also reports higher customer and employee satisfaction and improved brand alignment. Additionally REI representatives state both stores are experiencing increased shopping frequency by REI members.

Not bad for strategic upkeep.