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Contract No. DE-AC36-08GO28308

Industry Research and 

Recommendations for Small

Buildings and Small Portfolios

Rois Langner, Bob Hendron, and Shanti Pless

National Renewable Energy Laboratory

Mark Huppert and Ric Cochrane

Preservation Green Lab,

National Trust for Historic Preservation

Technical Report

NREL/TP-5500-57776

December 2013
NREL is a national laboratory of the U.S. Department of Energy

Office of Energy Efficiency & Renewable Energy

Operated by the Alliance for Sustainable Energy, LLC

This report is available at no cost from the National Renewable Energy

Laboratory (NREL) at www.nrel.gov/publications.

Contract No. DE-AC36-08GO28308

National Renewable Energy Laboratory

15013 Denver West Parkway

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303-275-3000 • www.nrel.gov

Industry Research and 

Recommendations for Small 

Buildings and Small Portfolios

Rois Langner, Bob Hendron, and Shanti Pless

National Renewable Energy Laboratory

Mark Huppert and Ric Cochrane

Preservation Green Lab,

National Trust for Historic Preservation

Prepared under Task No. BEC8.1115

Technical Report

NREL/TP-5500-57776

December 2013
NOTICE

This report was prepared as an account of work sponsored by an agency of the United States government. 

Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, 

express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of 

any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately 

owned rights. Reference herein to any specific commercial product, process, or service by trade name, 

trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, 

or favoring by the United States government or any agency thereof. The views and opinions of authors 

expressed herein do not necessarily state or reflect those of the United States government or any agency thereof.

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Cover Photos: (left to right) photo by Pat Corkery, NREL 16416, photo from SunEdison, NREL 17423, photo by Pat Corkery, NREL 

16560, photo by Dennis Schroeder, NREL 17613, photo by Dean Armstrong, NREL 17436, photo by Pat Corkery, NREL 17721.

Printed on paper containing at least 50% wastepaper, including 10% post consumer waste.
iii

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Acknowledgments

The authors would like to thank Glenn Schatz, Arah Schuur, and the U.S. Department of Energy 

(DOE) Building Technologies Office (BTO) for supporting the project. This report was prepared 

by the National Renewable Energy Laboratory (NREL) under Project ID NREL-FY-13-02. 

Thank you to the many members of the Small Buildings and Small Portfolios (SBSP) community 

who contributed input and feedback on the SBSP sector and provided recommendations on 

approaches to address energy efficiency in the sector. We would also like to acknowledge 

Maureen McIntyre, Natalie Gregory, and the NREL communications team for editing and 

reviewing the document. 
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Nomenclature

AERG Advanced Energy Retrofit Guide 

ASHRAE American Society of Heating, Refrigerating and AirConditioning Engineers 

BOMA Building Owners and Managers Association 

BPD Building Performance Database

BTO Building Technologies Office 

CBECS Commercial Buildings Energy Consumption Survey 

DEEP Deep Energy Efficiency Potential

DOE U.S. Department of Energy 

EEM energy efficiency measure

EERE DOE Office of Energy Efficiency and Renewable Energy

ESCO energy service company

EUI energy use intensity

HVAC heating, ventilating, and air conditioning 

NREL National Renewable Energy Laboratory

NSBA National Small Business Association

PPA power purchase agreement 

PGL Preservation Green Lab

SBA U.S. Small Business Administration

SBSP Small Buildings and Small Portfolios
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Executive Summary

Small buildings have been left behind in the energy efficiency marketplace because financial and 

technical resources have flowed to larger commercial buildings (PGL 2013). DOE’s Building 

Technologies Office (BTO) works with the commercial building industry to accelerate the 

uptake of energy efficiency technologies and techniques in existing and new commercial 

buildings (DOE 2013). BTO recognizes the SBSP sector’s potential for significant energy 

savings and the need for investments in resources that are tailored to this sector’s unique needs. 

The industry research and recommendations described in this report identify potential 

approaches and strategic priorities that BTO could explore over the next 3–5 years that will 

support the implementation of high-potential energy efficiency opportunities for this important 

sector. 

DOE is uniquely positioned to provide national leadership, objective information, and innovative 

tools, technologies, and services to support cost-effective energy savings in the fragmented and 

complex SBSP sector. Properly deployed, the DOE effort could enhance and complement 

current energy efficiency approaches. 

For this report, small buildings are defined as buildings smaller than 50,000 ft2

; however, the 

average small building is smaller than 8,000 ft2. Small portfolios are loosely and qualitatively 

defined as portfolios of buildings that include only a small number of small buildings. This 

distinction is important because the report targets portfolio owners and managers who generally 

do not have staff and other resources to track energy use and pursue energy efficiency solutions. 

Research conducted as part of this effort identified a number of challenges to the adoption of 

energy efficiency solutions. SBSP owners and operators and the third-party service providers 

who cater to them are often hard to reach, and the sector’s fragmentation has created many 

barriers that prevent businesses from aligning their operation goals with energy conservation 

goals (PGL 2013). The largest reported barriers include: 

• Limited capital

• Higher transaction costs relative to energy cost savings 

• Lack of time to research and implement energy efficiency solutions

• Split incentive obstacles between owners and tenants 

• Lack of available sector-specific resources and technologies. 

Market barriers also exist. Service providers, utilities, and financial institutions often cater to 

larger players because energy savings in bigger buildings provide faster and more attractive 

returns on investment. In addition, energy efficiency solutions are more easily adopted and 

disseminated across sizable building portfolios because energy savings are typically larger 

relative to the transaction costs.

Further, convenience and emotional drivers typically motivate decisions in the SBSP sector 

(PGL 2013). In many ways, the SBSP sector is more similar to the residential building market 

than to the large commercial sector. This is particularly true of the relative resources small 
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building owners and homeowners have available to pursue energy efficiency, as well as their risk 

profiles and creditworthiness. 

Owners and operators are concerned about increases in energy costs, but many lack the time and 

capital to spend on anything unrelated to day-to-day operations. Even when small building 

owners want to improve energy efficiency, few reliable, accessible, affordable, and user-friendly 

tools and resources are available. They may understand the potential return on investment, but 

lack the resources to invest in detailed energy audits and comprehensive financial analyses. 

Hence, there is a gap between stakeholder interest in reducing energy costs and actions that 

improve energy efficiency. This gap strongly indicates a need for additional support to improve 

energy efficiency in this sector. 

Despite the challenges, the size of the SBSP sector makes it an attractive opportunity, for the 

following reasons: 

• More than 90% of U.S. commercial buildings—a total of 4.6 million—are smaller than 

50,000 ft2

 (CBECS 2003). 

• These buildings account for 51% of total floor space (CBECS 2003). 

• The average small commercial building is smaller than 8,000 ft2 (PGL 2013). 

• The sector consumes more than 40% of the energy used in U.S. commercial buildings, 

offering large potential energy savings (CBECS 2003). 

One study estimates that a well-designed SBSP initiative could result in 1.07 quadrillion Btu of 

site energy savings or $30 billion in energy cost savings every year (PGL 2013). 

The research also shows that many small buildings house small businesses. Nationwide, small 

businesses account for half of all private sector employees, and have generated 65% of net new 

jobs during the past 17 years (SBA 2013). Small businesses are widely acknowledged to be a 

major driver of the U.S. economy; however, they typically operate on slim profit margins 

(Forbes 2013). Dollars saved through energy efficiency improvements directly impact their 

bottom lines. 

This report presents a potential course of action that provides a path to significant energy savings 

and identifies unique roles and key opportunities for DOE. NREL researchers who developed 

the report took a strategic approach to (1) understand and characterize the current state of the 

SBSP sector; (2) identify specific sector needs, as well as opportunities to encourage widespread 

adoption of energy efficiency solutions on a national scale; and (3) narrow the approaches, 

opportunities, and priorities to those appropriate for DOE support. These potential key 

opportunities and focus areas for DOE include: 

• Provide greater confidence that energy efficiency investments will be successful for small 

building owners by proving cost effectiveness of the investments through demonstration 

projects and case studies that include detailed cost data and performance verification.

• Enable small building owners and third-party service providers to make solid investment 

decisions at the building and district levels by developing simple tools that enhance 
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energy audit and loan application processes for small buildings, overcoming high 

transaction costs and lack of owner expertise. 

• Engage and incentivize manufacturers and contractors to produce and install highefficiency equipment, controls, and other technologies that are appropriate for small 

buildings. 

• Help remove organizational and administrative barriers by identifying or developing 

SBSP-specific guidance and materials that address barriers such as cumbersome tax 

credit documentation and split incentive obstacles. 

• Encourage submission to DOE’s open, interactive energy datasets and platforms to 

address the lack of benchmarking data and enable owners, utilities, and financiers to 

identify the best energy savings opportunities for small buildings. 

• Help make the SBSP community more energy efficient by establishing sector-specific, 

long-term energy goals and research priorities.

• Characterize and support third-party service providers so they are better aligned with 

design resources and incentive programs. 

Concentrating DOE resources on these efforts could focus research, development, and 

evaluation; demonstrate scalability; guide deployment plans; and provide pathways for analysis 

and tools to apply to policy, codes, and energy efficiency incentive programs. Adapting and 

improving DOE programs and tools could help bridge the gap between stakeholder interest in 

reducing energy costs and actions to achieve significant energy savings.
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Table of Contents

Acknowledgments ..................................................................................................................................... iii

Nomenclature ............................................................................................................................................. iv

Executive Summary.................................................................................................................................... v

List of Figures ............................................................................................................................................ ix

List of Tables .............................................................................................................................................. ix

1 Introduction........................................................................................................................................... 1

2 Research Approach.............................................................................................................................. 3

3 Current State of the SBSP Sector....................................................................................................... 5

3.1 Characterization of Small Building Types ....................................................................................... 8

3.2 Key Stakeholders ........................................................................................................................... 13

3.3 Needs and Opportunities ................................................................................................................ 15

4 Small Buildings and Small Portfolios Report.................................................................................. 18

4.1 Report Development ...................................................................................................................... 18

4.2 Potential Roles for DOE and Potential Collaborators .................................................................... 19

4.3 Potential Program Improvements and New Approaches ............................................................... 21

4.4 Program Coordination and Implementation ................................................................................... 23

4.5 Communication and Outreach Approach ....................................................................................... 24

Appendix A: SBSP Sector Characterization.......................................................................................... 30

Appendix B: National Needs and Opportunities................................................................................... 37

Appendix C: Roles for Potential Collaborators..................................................................................... 41

Appendix D: Web Page and Promotional Recommendations............................................................. 43
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List of Figures

Figure 1. Schematic of the strategic approach used to develop the SBSP report.............................. 4

Figure 2. Breakdown of the small building sector by number of buildings, floor space, and energy 

use.......................................................................................................................................................... 5

Figure 3. Number of establishments by construction vintage.............................................................. 6

Figure 4. The gap between stakeholder interest in reducing energy costs and actions taken to 

improve the energy efficiency of small buildings ............................................................................. 8

Figure 5. PGL survey—small buildings ownership and management ............................................... 11

Figure 6. SBSP stage-gate process ....................................................................................................... 23

Figure 7. Levels of communication effort required for desired results ............................................. 26

Figure A–1. DEEP rating for PGL’s target building types.................................................................... 34

Figure A–2. PGL national survey cities and survey returns by U.S. climate zone............................ 35

Figure A–3. National survey results by market and type..................................................................... 36

Figure A–4. Comparison of CBECS main street buildings with PGL national survey buildings..... 36

List of Tables

Table 1. NSBA 2011 Energy Survey—Main Obstacles Preventing Small Businesses From 

Becoming More Energy Efficient ........................................................................................................ 7

Table 2. National Survey Building Types From PGL .............................................................................. 9

Table 3. Key Commercial Subsectors To Target for Energy Efficiency ............................................. 10

Table 4. Target Audience Analysis of the SBSP Sector....................................................................... 14

Table 5. Potential High-Priority Areas of Exploration for DOE and National Laboratories To Pursue 

in the SBSP Sector Over the Next 3–5 Years................................................................................... 20

Table A–1. NSBA 2011 Energy Survey—Main Obstacles Preventing Small Businesses from 

Becoming More Energy Efficient ...................................................................................................... 30

Table A–2. NSBA 2011 Energy Survey—Most Important Energy-Saving Steps Taken by Small 

Businesses.......................................................................................................................................... 31

Table A–3. NSBA 2011 Energy Survey—Reaction of Businesses to Rising Energy Costs ............. 31

Table A–4. Primary Use Types Included and Excluded in the CBECS Data Analysis by PGL ........ 33

Table B–1. Estimated Energy Savings Potential for Each Primary Building Type Identified by PGL37

Table B–2. Strategies for the SBSP Sector Identified by PGL Research ........................................... 38

Table B–3. Key Actions for Stakeholders (PGL)................................................................................... 39

Table C–1. High-Priority Areas for National Standards, Tool Developers, Government Lenders, 

and Local Jurisdictions in the SBSP Sector.................................................................................... 41

Table C–2. High-Priority Areas for Energy Regulators, Utilities, and ESCOs in the SBSP Sector.. 42
1

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1 Introduction

The U.S. Department of Energy’s (DOE) Building Technologies Office (BTO) works with the 

commercial building industry to accelerate the uptake of energy efficiency technologies and 

techniques in existing and new commercial buildings (DOE 2013). Through the goals and 

possible strategic priorities identified in this report, BTO can focus research efforts to develop 

and share vetted information that the market can use to deploy strategies and proven technologies 

that promote energy savings in small buildings and small portfolios (SBSP) over the next 3–5 

years.

These energy savings represent an enormous opportunity. According to the Commercial 

Buildings Energy Consumption Survey (CBECS), the SBSP sector comprises 4.6 million small 

buildings and consumes more than 40% of the energy used in U.S. commercial buildings 

(CBECS 2003). For this report, small buildings are defined as buildings smaller than 50,000 ft2; 

however, the average small building is smaller than 8,000 ft2. Small portfolios are loosely and 

qualitatively defined as portfolios of buildings that include only a small number of small 

buildings. This distinction is important because the report targets portfolio owners and managers 

who generally do not have staff and other resources to track energy use and pursue energy 

efficiency solutions.

Assuming a maximum potential energy savings of 45%, derived by data presented in the 

Advanced Energy Retrofit Guides (AERGs) (DOE 2012), the SBSP sector could save 1.07 

quadrillion Btu (quads) of annual site energy, which translates to $30 billion in energy cost 

savings per year (PGL 2013). Energy savings may vary from one building to the next, but the 

magnitude of the aggregate savings illustrates the potential impact of a well-designed SBSP 

initiative.

Despite the potential for extremely large energy savings, DOE programs historically have not 

targeted this audience. The sector’s fragmentation and complexity are major reasons: they 

create many barriers that inhibit the widespread adoption of energy efficiency solutions. The 

largest reported barriers that SBSP owners and operators face include: 

• Limited capital 

• Higher transaction costs relative to energy cost savings 

• Lack of time to research and implement energy efficiency solutions

• Split incentive obstacles between owners and tenants 

• A lack of available sector-specific resources and technologies.

Market barriers also exist. Service providers, utilities, and financial institutions often cater to 

larger players because the more substantial energy savings in bigger buildings provide faster and 

more attractive returns on investment. In addition, energy efficiency solutions are more easily 

adopted and disseminated across sizable building portfolios, because energy savings are typically 

larger relative to the transaction costs in bigger buildings and portfolios. These players also 

often have capital and staff time to invest in researching and implementing efficiency solutions.
2

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Despite the challenges, the potential energy savings in the SBSP sector justify research, 

development, and deployment efforts. To tackle this opportunity, National Renewable Energy 

Laboratory (NREL) researchers developed this report, which identifies potential approaches and 

strategic priorities for DOE to explore over the next 3–5 years. This potential course of action 

provides a path to significant energy savings and identifies unique roles and key opportunities for 

DOE to support and accelerate the adoption of energy efficiency solutions. It also identifies 

potential improvements to current programs as well as innovative approaches. 

This report focuses primarily on existing buildings, but NREL also developed a proposed 

framework for improving energy efficiency in new commercial buildings that includes specific 

recommendations for small commercial new construction projects (NREL 2013). Together, the 

SBSP report and current research and initiatives related to new construction identify possible 

high-priority focus areas for DOE to support energy efficiency in this sector’s new and existing 

buildings. 
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2 Research Approach

NREL researchers focused on leveraging available resources, supplementing those resources 

with additional analysis, and collecting targeted stakeholder input. The process comprised three 

major tasks: 

Task 1: Initial scoping and characterization of the SBSP sector 

Task 2: Gap analysis and stakeholder input 

Task 3: Development of the SBSP report, including key focus areas for DOE. 

To accomplish these tasks, NREL researchers: 

• Collected data from reports, journal articles, and other research.

• Engaged in telephone conversations with industry stakeholders. 

• Subcontracted with the National Trust for Historic Preservation’s Preservation Green Lab 

(PGL) to write a report on its past research about the energy efficiency potential of small 

buildings (PGL 2013). 

• Solicited comments and recommendations from key stakeholders through a peer review 

of the first draft.

The peer reviews served as a way to vet the information in the report. NREL researchers used 

the feedback from peer reviewers to develop the second and final drafts. They also used data 

from Tasks 1 and 2 to answer the following questions: 

• Is the energy savings potential for the SBSP sector significant?

• Does the SBSP sector need additional support for energy efficiency solutions? 

• Is DOE’s unique role required and—if it is—how can DOE be most effective?

• Who are the potential non-DOE project development and deployment partners and are 

they sufficiently committed?

With these questions in mind, NREL researchers took a strategic approach to developing the 

report (see Figure 1). The intents were to (1) understand and characterize the current state of the 

SBSP sector (additional data supporting the sector characterization is found in Appendix A); (2) 

identify specific sector needs and opportunities to encourage widespread adoption of energy 

efficiency solutions on a national scale; and (3) narrow the goals and priorities to those 

appropriate for DOE support. Recommendations and feedback from stakeholders during the 

phone conversations, as well as the peer reviews of the first draft, were critical to developing and 

vetting the report recommendations. 
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Figure 1. Schematic of the strategic approach used to develop the SBSP report

The result is a report that identifies possible high-potential energy efficiency opportunities and 

strategic priorities for DOE to explore over the next 3–5 years. It also highlights key roles for 

sector stakeholders, including collaborative opportunities with DOE (Appendices B 

and C), and recommends improvements to current programs and innovative approaches to 

encourage energy efficiency across the sector (Section 4.3). 
5

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3 Current State of the SBSP Sector

The small building sector is vast and diverse, and accounts for a large fraction of the energy 

consumed by U.S. commercial buildings. More than 90% of U.S. commercial buildings are 

smaller than 50,000 ft2, accounting for 51% of total commercial building floor space (including 

malls) (CBECS 2003). These buildings consume nearly 3,000 trillion Btu, accounting for 44% 

of energy consumed by all commercial buildings (CBECS 2003). On average, small commercial 

buildings are smaller than 8,000 ft2, with an average energy use intensity (EUI) of 80 kBtu/ft2/yr 

(PGL 2013). For comparison, the average EUI for all CBECS buildings is 92 kBtu/ft2/yr, and 

buildings larger than 50,000 ft2 average 102 kBtu/ft2/yr (PGL 2013).

Figure 2. Breakdown of the small building sector by number of buildings, 

floor space, and energy use 

(CBECS 2003)

For this report, small portfolios are loosely and qualitatively defined as portfolios of buildings 

that include only a small number of buildings smaller than 50,000 ft2

—many are smaller than 

8,000 ft2. The portfolio owners and managers generally do not have staff and other resources to 

track energy use and pursue energy efficiency solutions. This report describes strategies and 

processes for identifying and engaging these stakeholders. 

Small buildings often house small businesses. According to the National Small Business 

Association (NSBA), the United States has approximately 26.9 million small businesses (NSBA 

2011). A small business, as defined by the U.S. Small Business Administration (SBA), is 

independently owned and operated, is organized for profit, and is not dominant in its field of 

operation (SBA 2012). PGL estimates that the 4.6 million small commercial buildings are 

home to approximately 5.9 million small (fewer than 500 employees) employer businesses 

nationwide (PGL 2013). CBECS data show that the average small building houses 

approximately 1.5 businesses (see Figure 3) (PGL 2013). This indicates that of the 6.9 million 

businesses (4.6 million × 1.5) that occupy small buildings, 5.9 million are small. Thus, it is 
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important to consider small businesses when developing energy efficiency solutions for the 

SBSP sector.

Figure 3. Number of establishments by construction vintage 

(PGL 2013)

In addition, small businesses account for half of all private sector employees nationwide, and 

have generated 65% of net new jobs during the past 17 years (SBA 2013). The SBSP sector is 

widely acknowledged to be a major driver of the U.S. economy; however, small businesses 

typically operate on slim profit margins (Forbes 2013), and dollars saved through energy 

efficiency improvements directly impact their bottom lines.

The NSBA (2011) conducted a survey to understand the concerns of small businesses about 

energy efficiency and the approaches they are using to save energy. The NSBA gathered 

information from more than 200 members, and found that: 

• Forty percent cited limited capital as the primary obstacle to making their businesses 

more energy efficient.

• Twenty percent did not have the time to research and implement energy efficiency 

strategies.

• Nine percent mentioned a lack of resources. 

• Eight percent mentioned that sector-specific technologies are not available. 
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Of the businesses that chose “other” in this survey, the most common reasons they gave for not 

improving the energy efficiency of their buildings included the poor economy, the fact that they 

lease their facilities, and a lack of time (see Table 1). 

Table 1. NSBA 2011 Energy Survey—Main Obstacles Preventing Small Businesses From 

Becoming More Energy Efficient

Although the small business owners and operators surveyed acknowledged obstacles to making 

their businesses more energy efficient, they did worry about energy expenses. Fifty-two percent 

of respondents said they were very concerned (40% were moderately concerned) about future 

energy costs, and 82% had taken one or more steps to reduce energy consumption. Of those 

businesses, 88% reported that the primary reason was to save money. For 6%, the primary 

reason was to reduce their company’s impact on the environment, and 2% saved energy to 

enhance their businesses’ brands or reputations. 

The NSBA (2011) further stated that: 

• Awareness of government- and utility-backed energy efficiency programs has increased 

over the past several years.

• Awareness of the ENERGY STAR® product label and technical support program 

increased 5% between 2009 and 2011. 

• Fifty-four percent of surveyed NSBA members were aware of local utility-sponsored 

programs, although only 27% have actually used them. 

• Thirty-seven percent did not know about utility-sponsored programs. 

• Only 5% of surveyed businesses had participated in utility-sponsored on-bill financing 

programs, which allow customers to repay energy efficiency loans to upgrade or retrofit 

their businesses through extra charges on their utility bills. However, on-bill financing 

programs are relatively new and have been adopted by only a fraction of utility providers 

across the nation. 

Understanding the SBSP sector’s behaviors, barriers, and challenges helps stakeholders 

overcome the obstacles that inhibit broad adoption of efficiency solutions. This research 
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identified a gap between stakeholders’ expressed interest in reducing energy costs and actions 

that improve energy efficiency. The SBSP report used this information to identify high-priority 

focus areas for DOE that help bridge this gap (see Figure 4).

Figure 4. The gap between stakeholder interest in reducing energy costs and actions taken to 

improve the energy efficiency of small buildings

3.1 Characterization of Small Building Types

Characterization studies of the SBSP sector helped NREL researchers identify the most 

appropriate strategies to support broad adoption of energy efficiency solutions. One study 

identified and established core characteristics of small buildings across the United States 

(PGL 2013). This research included a study of nearly 800 small buildings in 10 U.S. markets. 

PGL paired that work with a market prioritization study and an analysis of CBECS microdata. 

The result is a comprehensive small building typology that identified seven primary building 

types (and 26 building subtypes) with a high potential for energy savings. PGL researchers 

analyzed each building type based on the number of buildings, square footage, and aggregate 

energy consumption. The target building types and subtypes are shown in Table 2; data on 

average energy consumption for each target building type are shown in Table 3. Additional data 

from the PGL study can be found in Appendix A. 
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Table 2. National Survey Building Types From PGL
10

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Table 3. Key Commercial Subsectors To Target for Energy Efficiency

PGL’s detailed sector analysis describes distinctive characteristics of the seven targeted building 

types, owners’ motivations for adopting energy efficiency solutions, and the barriers that inhibit 

their adoption. A summary of these findings follows (PGL 2013): 

Most U.S. commercial buildings are small, diverse in physical characteristics and use patterns, 

and offer substantial energy efficiency opportunities. 

• The sector represents 4.6 million small buildings and 5.9 million small businesses. 

• The average building is smaller than 8,000 ft2

. 

• There is a potential 1.07 quads of annual site energy savings, which equates to $30 billion 

in energy cost savings annually. 

A high proportion of energy use is concentrated in a few primary building types. 

• Seven major building types were studied: food service, main street, strip mall, lodging, 

retail, office, and schools. (As delineated by PGL, main street buildings are smaller, 

older buildings that are predominantly mixed use.) They represent more than 2 million 

buildings, 19 billion ft2

, and 3.6 million businesses. In aggregate, they consume about 2 

quads of energy annually. 

There are more similarities between the residential building market and the small commercial 

sector than between the large and small commercial sectors. 

• Owners are involved with operational decision making in more than 60% of small 

commercial buildings (see Figure 5).

• Decisions are largely motivated by convenience and emotional drivers such as business 

identity and relationships with peers in the direct vicinity.
11

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Figure 5. PGL survey—small buildings ownership and management 

(PGL 2013)

Small commercial buildings are often aggregated in business districts of similar building types 

with high potential for energy savings. 

• District- or neighborhood-level aggregation is a clear way to address the diverse, 

fragmented SBSP market and enable economically scalable applications of retrofit 

strategies.

• Buildings and communities in most need of retrofits are often Class B and Class C 

properties—second- and third-tier buildings in terms of quality—as described by the 

Building Owners and Managers Association (BOMA 2013). 

Buildings typical of main street consume more energy than buildings of similar use types 

nationally and offer significant potential for energy savings because of physical features and 

close relationships between owners and occupants. 

• Most main street buildings were constructed before 1960 (see Figure A–4 in 

Appendix A). 

• Primary uses of main street buildings are retail, food service, office space, warehouse/

automotive, education, and multifamily living space. 

Freestanding food service and sales establishments have the highest EUIs of any type of small 

building. 

• Almost 400,000 U.S. food service and food sales establishments are smaller than 

50,000 ft2

. 

• The opportunity to directly increase business profitability through energy savings is 

greatest in freestanding food service and sales buildings because of their low profit 

margins and high energy costs.
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Retail establishments and strip malls are vastly different subsectors.

• Retail businesses that occupy small buildings are typically clustered in business districts, 

often in neighborhoods of older buildings. 

• Strip malls are more energy intensive. They are also predominantly owned by one entity 

and professionally managed. 

In addition to these findings, PGL’s research also identified four main elements that define the 

SBSP sector (PGL 2013): 

• Smaller buildings, in particular main street buildings, and portfolios have inherent 

strengths. 

• Decision makers lack information, knowledge, and time. 

• Energy codes are poorly aligned to the opportunities in existing buildings. 

• The SBSP sector is large and fragmented and is not aligned around the goal of saving 

energy.

Smaller buildings, in particular main street buildings, and portfolios have inherent strengths. 

Old buildings, in particular, often have features that were designed to satisfy the comfort and 

performance needs of occupants in an era of energy and fuel scarcity. Energy savings can be 

leveraged from inherent features of these building such as high mass, daylight, natural 

ventilation, and proximity to other buildings. Most retrofit programs and incentives, however, 

do not consider these features as part of the energy savings potential. 

Decision makers lack information, knowledge, and time. 

A survey conducted by the Institute for Building Efficiency (2011) identified three significant 

barriers to energy efficiency in the U.S. commercial building marketplace: 

• Capital and information about financial incentives for efficiency projects are not 

available.

• Projects cannot meet the organization’s financial payback criteria.

• Decision makers do not trust that promised savings will be achieved. 

Lack of time and technical knowledge to implement efficiency solutions are issues for building 

owners and tenants; however, they also apply to the small contractors that serve these businesses. 

Third-party service providers often lack the training or experience to apply advanced technical 

strategies to small buildings, so they need small building-specific energy efficiency educational 

materials and guidance. Easy-to-access information is also needed that provides instruction and 

promotes awareness of energy savings opportunities. 
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Energy codes are poorly aligned to the opportunity in existing buildings. 

Energy efficiency tools and energy codes are typically tailored to new and larger buildings. The 

time necessary to enter information into energy efficiency tools can overwhelm the available 

resources of small businesses. Building codes also provide minimum standards and often ignore 

actual energy use, provide no incentive to encourage energy-saving behaviors, neglect 

interactions among building elements that can affect energy use, and have no positive feedback 

loop to determine effectiveness (PGL 2013). 

The SBSP sector is large, fragmented, and misaligned. 

Small buildings are often clustered in business districts or held in portfolios. The business 

districts or portfolios often have staffs that are paid to align the interests of diverse businesses or 

divisions around multiple shared goals. Successful business district associations drive economic 

development, customer outreach, and community improvement, and can be leveraged to align 

small businesses and building owners around the goal of improving energy efficiency. 

Approximately 5,400 business district organizations with professional staff, including national 

small business and community outreach organizations, business improvement districts, local 

service areas, downtown associations, and some historic districts, are available nationwide (PGL 

2013). 

These research findings provide key insights on the characteristics of buildings in the SBSP 

sector. NREL researchers used this information to prioritize possible key focus areas for DOE 

that could have a great impact on energy efficiency in this sector. 

3.2 Key Stakeholders

Stakeholders integrate best practices in the marketplace, so they are critical to improving energy 

efficiency in commercial buildings. NREL researchers conducted a high-level stakeholder 

analysis to understand key players and their roles, levels of knowledge, and perceptions of 

benefits and barriers. 

The study focused on a subset of the SBSP community for which data were readily available and 

accessible. Audience groups included small business owners, small building owners, building 

managers, utility companies and financial institutions, and third-party service providers. Table 4

summarizes an evaluation of this subset of stakeholders. 
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Table 4. Target Audience Analysis of the SBSP Sector
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Other possible stakeholders include building supply and equipment manufacturers; architectural 

and engineering design firms; state, local, and federal policy makers; building codes and 

standards developers; researchers; and consumers of small business goods and services. This 

report does not focus on these audiences.

PGL also identified key stakeholders that include organized business districts with professional 

staff, such as business improvement districts, local service areas, downtown associations, and 

historic districts. These stakeholders are important in the effort to develop energy efficiency 

solutions, because district- or neighborhood-level aggregation is an effective way to enable 

economically scalable energy efficiency strategies (PGL 2013). 

For example, some organized business districts provide resources and technical assistance to 

help revitalize downtown and business districts and advance economic development (PGL 2013). 

Improving energy efficiency can be an effective economic development strategy.

3.3 Needs and Opportunities

The SBSP sector has great potential for energy cost savings and job creation, and small building 

and business owners frequently express interest in energy efficiency; however, saving energy 

presents many challenges.

To better understand these challenges, NREL researchers reviewed reports and engaged in 

telephone conversations with key players. During the interviews, researchers recorded opinions 

about sector needs as well as the interviewees’ recommended approaches for increasing energy 

savings, as summarized here.

1. Policy and programs:

a. Establish federal, state, and local long-term energy plans (Higgins 2012).

b. Streamline access for owners and third-party service providers to participate in 

energy efficiency programs (Higgins 2012).

c. Simplify regulatory requirements and accelerate the regulatory process to reduce 

costs and increase certainty that energy projects will be approved (NSBA 2012).

d. Work with building energy management programs to develop criteria for small 

buildings (Malin 2012).

e. Work with professional appraisal groups to develop recommendations and 

guidelines to help appraisers identify and value high-performance building 

features (Finlay 2013).

f. Partner with trusted organizations or local entities to increase participation and 

reduce costs (Higgins 2012).

2. Financial incentives and enhancements:

a. Provide a clear pathway for tax credit documentation. Tax credits can be difficult 

for small businesses to document (Malin 2012).

b. Provide financing at attractive rates.
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c. Encourage credit enhancements such as SBA loan guarantees and other 

mechanisms (Finlay 2013).

d. Quantify the value of energy efficiency improvements beyond cost savings 

(increased property value, appeal to prospective tenants, etc.) (Finlay 2013).

e. Clearly define risks of investing in energy efficiency solutions (Finlay 2013).

f. Establish utility energy efficiency power purchase agreements (PPAs) at rates on 

par with generation to encourage new delivery models from suppliers that would 

reduce the process costs to building owners (Higgins 2012).

g. Encourage utilities to invest on the customer’s side of the meter to save 

measurable energy and to achieve a regulated rate of return (PGL 2013).

h. Develop affordable small building audits and determine ways to increase 

participation rates (Parker 2012).

3. Data analysis, tools, and delivery of energy efficiency solutions:

a. Aggregate or bundle sets of buildings to create energy savings and economic 

momentum to develop a stronger business model for whole-building retrofits 

through reduced transaction costs and the ability to leverage services and 

solutions (Higgins 2012).

b. Establish coordinated programs that implement large-scale aggregated 

information to capitalize on the long-term, stable rates of return from energy 

conservation investments on the customer’s side of the meter (PGL 2012). 

c. Simplify the delivery of energy services by enhancing and expanding third-party 

service provider models—contractors, energy service companies (ESCOs), and 

owner consortiums (Higgins 2012).

d. Support incremental improvements that can be made in conjunction with major 

renovations and equipment upgrades or replacements. This will produce 

cumulatively greater energy and dollar savings than waiting to undertake the 

whole job until much later (Cassidy 2012a).

e. Develop tools for better control of buildings, including plug load management 

based on behavioral science, heating and cooling requirements, and lighting 

(Cassidy 2012b).

f. Support metering and submetering projects during renovations of small buildings 

(Cassidy 2012b).

g. Encourage further development of a national data standard for exchanging meterlevel data for multiple fuels (PGL 2012).

h. Develop building analysis tools or software applications for utilities to analyze 

individual and aggregate utility bills (Malin 2012).

4. Energy efficiency technologies:

a. Support research and development on building equipment (Malin 2012), 

especially energy-efficient equipment sized for small buildings and businesses.
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b. Work with ASHRAE to approve smaller equipment for commercial applications 

(Malin 2012).

NREL researchers used this stakeholder feedback to identify and inform DOE’s unique role in 

this effort, to develop a list of potential DOE focus areas (see Section 4.2), to support widespread 

adoption of energy efficiency across the SBSP sector, and overcome barriers.
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4 Small Buildings and Small Portfolios Report

The goal of this report is to identify approaches and strategic priorities for DOE to pursue in the 

SBSP sector for the next 3–5 years. Based on the detailed analyses summarized in this report, 

NREL researchers assembled data, research, and opinions from key stakeholders and identified 

high-priority areas (see Section 4.2) for DOE to focus its efforts. These potential focus areas 

address research, development, and evaluation; demonstrate scalability; include a deployment 

plan; and provide pathways for analysis and tools to apply to policy, codes, and energy 

efficiency incentive programs.

NREL researchers evaluated and sorted the data compiled in Section 3 into potential research 

areas, and coupled these research areas with example projects. Then, they reviewed and 

evaluated current DOE and national laboratory projects for potential inclusion in the SBSP 

report. Section 4.3 lists current projects that NREL researchers determined should be expanded, 

along with new research areas to pursue over the next 3–5 years.

4.1 Report Development

NREL researchers analyzed the SBSP sector to answer the following key questions based on the 

research conducted for the development of this report.

• Does the SBSP sector need additional support for energy efficiency solutions?

• Is the energy savings potential significant?

• Is DOE’s unique role required?

• Is the cost of conserved energy competitive with that offered through competing projects?

• Are non-DOE project development and deployment partners sufficiently committed?

Does the SBSP sector need additional support for energy efficiency solutions?

Section 3 provides an evaluation of the SBSP sector that identifies overall needs and 

opportunities for encouraging significant energy savings. Given the current status of the sector, 

the need for market intervention is clear and DOE roles are well defined. 

The fragmentation and complexity of the SBSP sector have historically created many barriers. 

Of these, limited capital, lack of time to research and implement, and lack of available sectorspecific resources and technologies are particularly significant (NSBA 2011). Despite these 

barriers, small building and business owners are becoming increasingly interested in energy 

efficiency. As noted in Section 3, 52% of surveyed NSBA members said they were very 

concerned (40% were moderately concerned) about future energy costs. However, although 

awareness of government- and utility-backed energy efficiency programs has increased over the 

past couple of years, only 27% of surveyed businesses have actually used them and 37% did not 

know about them (NSBA 2011). Only 5% of surveyed businesses have participated in utilitysponsored on-bill financing programs to upgrade or retrofit their businesses (NSBA 2011). This 

gap between interest and action is a strong indicator of a market failure and of a need for 

additional support for energy efficiency.
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Is the energy savings potential significant?

The opportunity for energy savings in the SBSP sector is great. Assuming a maximum potential 

energy savings of 45%, derived by data presented in the AERGs (DOE 2012), the small 

buildings sector could save 1.07 quads of site energy, or $30 billion, annually (PGL 2013). In 

2011, this represented 6.6% of energy consumed by all U.S. residential and commercial 

buildings 

(PGL 2013).

Is DOE’s unique role required?

DOE has the ability to encourage a vast increase in energy savings across the SBSP sector over 

the next 3–5 years. DOE could help remove barriers by providing national leadership, objective 

information, and innovative tools, technologies, and services that encourage the SBSP 

community to take action in areas where current solutions do not meet the needs. (Section 4.2 

lists potential DOE activities.) These activities could promote analysis of energy use and 

development of energy efficiency measure (EEM) packages for specific small businesses, small 

building types, and climate zones.

Is the cost of conserved energy competitive with that offered through competing projects?

At present, the cost of conserved energy for small building owners is likely to be significantly 

higher than that of other market sectors, because they often lack the purchasing power to obtain 

volume cost discounts, and the ratio of transaction costs to energy cost savings tends to be 

significantly larger for small retrofit projects. However, investment in resources tailored to the 

unique needs of the SBSP sector can reduce transaction costs, minimize risk, and increase 

confidence in the success of energy efficiency projects. This can have a dramatic impact on the 

cost effectiveness of building retrofits. Investment in resources and tools for the SBSP market 

can have a very low cost of conserved energy because huge energy savings can be achieved

through targeted research and deployment efforts.

Are non-DOE project development and deployment partners sufficiently committed?

Traditionally, the most experienced and qualified ESCOs have avoided the SBSP market because 

of the high transaction costs and limited energy cost savings. However, many utilities have 

launched initiatives that are designed to break through the barriers and stimulate greater 

movement toward energy efficiency in this market. Organizations such as the National Trust for 

Historic Preservation and the NSBA have also stepped up their efforts to catalyze increased 

activity among small building owners. In contrast to the “large account” approach used in recent 

years to transform the commercial building market, DOE will need to collaborate with smaller 

and less traditional (but no less committed) SBSP partners.

4.2 Potential Roles for DOE and Potential Collaborators

NREL researchers aggregated and evaluated the data presented in this report to identify sectorspecific needs and qualitatively determine potential high-priority areas for DOE (see Table 5). 

These areas were highlighted during the peer review process, and feedback on their importance 

and priority was incorporated into the final recommendations. 
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Table 5. Potential High-Priority Areas of Exploration for DOE and National Laboratories To Pursue 

in the SBSP Sector Over the Next 3–5 Years

Table 5 excludes many needs in the SBSP community, because they are broader issues that affect 

large and small buildings. However, many are addressed by the focus areas derived from current 

research and the proposed framework for new construction (NREL 2013). The new construction 

high-priority focus areas include: 

1. Benchmark data: System- and whole building-level benchmark data, organized by 

building type and climate, that can be used to set performance targets for new buildings

2. Better modeling tools: New and enhanced modeling tools to support integrated design, 

analysis of new technologies, and identification of operational and behavioral influences 

on energy use
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3. Model code language: Model code and stretch code language that can be adopted by 

states and localities seeking more aggressive energy performance and data disclosure 

requirements

4. Better cost data: Objective, vetted average component- and system-level cost data for 

analysis of return on investment

5. Commissioning and operational strategies: Effective commissioning and operational 

strategies following hand-off, demonstrated through case studies

6. Integrated resources: Integrated resources that present new construction case studies, 

best practice guides, datasets, and tools in a more accessible, adaptable, and user-friendly 

format.

4.3 Potential Program Improvements and New Approaches

The following program areas are either an expansion of existing programs, or new approaches 

that specifically address the unique challenges of the SBSP sector. The key focus areas, as 

defined in Table 5, are indicated in parentheses. 

• Standard low-risk retrofit packages for small buildings (1,2): DOE could partner 

with utilities and financial institutions to gather and provide more transparent 

performance data for EEMs. These data would also be used to develop standard 

packages of retrofits adapted to small buildings with limited ability to perform detailed 

audits. These packages would be supported by simple decision trees that can be 

navigated without detailed information about the performance of existing building 

systems. The packages would be designed to help evaluate economic and risk criteria 

defined by the financing partners, including average energy cost savings, percent of 

buildings that would achieve positive cash flow from the investment, projected life cycle 

of energy savings, and net present value. 

• SBSP Retrofit Database (1,2,5): DOE could encourage the collection of data for the 

Building Performance Database (BPD) with information about retrofit measures 

completed in small buildings. The BPD would help motivate other building owners to 

initiate their own retrofit projects by allowing them to see the successful actions others 

have taken in similar situations. 

• Better Buildings Main Street Program (1,2,5): DOE could form a new partnership 

with a diverse group of SBSP stakeholders that would help to plan, design, and

demonstrate research, tools, and resources that are targeted to local business 

communities. In addition to several energy champions representing small building 

owners and occupants, the program would include organized business districts with 

professional staff such as business improvement districts, local service areas, downtown 

associations, and historic districts. Local business communities offer a unique 

opportunity because the buildings tend to be older and the building owners and tenants 

are often interested in working cooperatively toward a common goal. 

• AERGs for small buildings (1,2,3,6): DOE could develop short AERGs tailored to the 

SBSP market, with simplified step-by-step guidance, low-risk standard packages, and 

helpful case studies to stimulate ideas. (The published AERGs are more appropriate for 
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energy managers of larger buildings, who have a base level of expertise in energy 

systems and efficiency improvements.) This activity would address the need for better 

retrofit guidance adapted to the needs of the SBSP market.

• SBSP fact sheets (2,3,6): In conjunction with the AERGs, DOE could develop a series 

of two-page fact sheets with simple guidance for specific small building types, including 

no-cost operational improvements, retrofit measures to consider, links to additional 

resources, and short case studies. These fact sheets would not be supported by detailed 

analysis, but would instead draw on the experience of industry practitioners to identify 

the most common techniques for reducing energy use in small buildings. The building 

types could range from the most common (small offices, corner stores, mom and pop 

restaurants) to those that are less common but have high energy intensity (machine shops, 

laboratories, dentists’ offices). 

• Training curriculum for energy service providers (2,3): DOE could leverage past and 

current work developing audit tools, educational materials, and best practice guides to 

create a special training curriculum for energy service providers that support small 

businesses. The training would focus on balancing affordability with accuracy, resulting 

in audit recommendations that are simple, safe, and cost effective. DOE could enlist 

organizations to pilot the training curriculum with its smaller members. 

• Advanced equipment challenges (4): Expanding on the successful RTU Challenge, 

DOE could sponsor additional contests to encourage thinking outside the box and reward 

innovation by manufacturers of smaller capacity heating, ventilation, and air-conditioning 

(HVAC) equipment and inexpensive building controls. This effort would address the 

need for greater collaboration with manufacturers, and the market need for higher 

performance HVAC systems sized for smaller building loads.

• Advanced controls in the small building sector (4): Most small buildings do not have 

central building automation systems, so the advanced efficiency control options—to 

which larger buildings have access—are limited. As a result, novel, inexpensive control 

concepts that can be implemented without a central building automation system must be 

developed, integrated, and demonstrated. Control concepts that could be addressed 

include dimming of electric lighting, occupancy control, smart thermostats, daylight 

harvesting control capabilities, and variable frequency drives for pumps and fans. 

• Simple online analysis tool (4): DOE could adapt existing tools, such as the Home 

Energy Saver, Asset Score, and other similar tools, to include small commercial 

buildings. For example, the Home Energy Saver helps homeowners perform 

prescreening to determine whether their homes are good candidates for energy retrofits. 

It also provides preliminary estimates of savings potential, and suggests priority measures 

for consideration based on a few simple inputs about the features of the house, climate, 

and utility bills. Adapting this and other similar DOE tools could be beneficial to the 

SBSP sector. The sophistication level of most small commercial building owners about 

energy savings opportunities in their buildings is similar to that of homeowners, so they 

would value simple screening tools such as these before investing in an energy audit.

• Better Buildings Challenge (5): DOE could initiate direct partnerships with several 

small building owners, or organized consortia to better understand the practical 
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challenges facing the SBSP market and develop case studies that would stimulate action 

by increasing confidence in the opportunities. Partners would be encouraged to provide 

detailed cost data for all aspects of the projects, allow access to all phases of the decisionmaking process, and help DOE measure and verify actual energy savings. This activity 

would lead to better cost data, improve the guidance documents, and support the 

definition of standard, low-risk EEM packages.

4.4 Program Coordination and Implementation

This report emphasizes key focus areas that could accelerate the adoption of energy efficiency 

solutions across the SBSP sector. It recommends a broad-based approach that balances 

innovation, technology, policy, market, strategic deployment, and economic considerations. 

Highly motivated and knowledgeable stakeholders would likely be the early adopters, 

influencing the pace of awareness and acceptance; others will require additional information or 

incentives before acting. Lessons learned from the successes and failures of early adopters from 

start to finish must be communicated to reach hesitant or risk-averse audiences. 

The strategy for achieving SBSP goals should focus on three phases of the program management 

process: (1) development, (2) demonstration, and (3) deployment. A logical progression 

through each phase should steadily increase the scale of energy efficiency solutions across the 

SBSP sector, broadening market penetration. Completion of each SBSP program phase should 

be validated using a stage-gate process with specific go/no go criteria (see Figure 6).

Figure 6. SBSP stage-gate process

The stage-gate process will be conducted independently for each SBSP project, and schedules 

and milestones will be project specific.

Development Stage Gate

•Solutions proven analytically

•New technology performance 

proven in laboratory setting

•Energy goals established

Demonstration Stage Gate

•Energy savings and cost 

effectiveness proven in small 

buildings

•Accuracy of new tools validated

•Energy goals validated

Deployment Stage Gate

•Efficiency resources available

•Utility, financier, municipal, or 

service provider infrastructure 

developed

•Energy goals accepted by SBSP 

sector
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4.5 Communication and Outreach Approach

A communication and outreach approach has been developed to engage organizations and expert 

stakeholders in relevant aspects of the report. Its goals are to increase the impact of the 

recommended key focus areas (see Table 5) and broadly disseminate the results. 

This approach includes a framework to support effective and coordinated communication that 

supports the key focus areas for the next 3–5 years. It also provides guidance for all 

communication activities that are necessary to build capacity and engage interagency and 

nongovernmental expert stakeholders.

4.5.1 Goals and Objectives

To successfully reach target audiences in the SBSP sector, the communication approach should: 

1. Increase awareness of the key focus areas by maximizing interagency and 

nongovernmental stakeholder relationships and developing new stakeholder partnerships.

2. Ensure that interagency and nongovernmental expert stakeholders understand the focus 

areas outlined in the report.

3. Mobilize key stakeholders to enhance current efforts that promote energy efficiency 

solutions.

The communication approach should also implement creative, cost-effective, and impactful 

communication and outreach strategies and techniques that engage stakeholders. It should: 

1. Leverage communication tools and networks to engage priority stakeholders. 

2. Achieve coordinated communications, both internally and externally, by developing key 

messages and talking points to establish “one clear voice” in all communication channels 

and all stakeholder audiences. 

3. Enable key stakeholders to communicate information to the SBSP sector.

4. Engage representatives from national, state, and local organizations in implementing 

communication and outreach strategies.

5. Establish strong, positive connections between DOE, stakeholders, and their 

communities.

This approach will lead to measurable outcomes that are expected to include: 

1. Increased number of new partnerships with key stakeholders

2. Increased capacity and influence of key stakeholders

3. Increased awareness and knowledge of opportunities for implementing EEMs. 

4.5.2 Framework

The communication and outreach approach focuses on interagency and nongovernmental expert 

stakeholders, including building owners, tenants, third-party service providers, utilities, 

financiers, municipalities, and small business associations. These stakeholders recognize that 
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DOE is well positioned to develop an infrastructure that promotes technical innovation and 

economic change to meet sector-specific energy efficiency needs. Successfully reaching these 

stakeholders will require the following key activities for efforts related to the key focus areas: 

1. Identify and prioritize interagency and nongovernmental expert stakeholders.

2. Identify key actions for stakeholders to take.

3. Develop key unified, consistent, and actionable messages related to DOE focus areas and 

establish a plan to keep the messages fresh.

4. Identify and use the best communication channels to maximize awareness and support 

among primary stakeholders.

4.5.2.1 Identify Target Audiences

The communication approach has two main audiences: (1) interagency and nongovernmental 

expert stakeholders; and (2) building owners, tenants, third-party service providers, utilities, 

financiers, municipalities, and small business associations.

4.5.2.2 Develop Key Messages

Success in any communication initiative requires well-defined and effectively communicated key 

messages. These messages should be consistent with the desired outcome of each initiative 

under the key focus areas proposed in this report. 

The Communications team will work with key stakeholders to develop simple, direct messages 

that address their issues and concerns (see Appendix A). Example messages might include: 

• Small buildings offer big opportunities for energy savings.

• Saving energy is good for business.

• DOE helps small building owners and businesses thrive through energy efficiency 

solutions that reduce operating costs.

• Aggregating small buildings in neighborhood districts or by other means can increase 

impact and provide opportunities for scalable energy savings (across a neighborhood 

district, for example).

4.5.2.3 Select Communication Channels 

Communication channels carry the messages to the target audiences. Creative, low-cost, and 

impactful communication and outreach approaches and strategies reach and engage stakeholders 

in a way that encourages them to take action. These may include:

• Events: Attend targeted industry events and promote and encourage stakeholder 

participation. 

• Web page: Develop a central online location for information, tools, and resources on the 

DOE Energy Efficiency and Renewable Energy (EERE) website. 

• Fact sheet: Create a quick overview of the SBSP report and DOE efforts, located on the 

EERE website.
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• Webinar series: Provide live online webinars to engage target audiences and share 

information that is replicable, useful, and actionable. Webinars will be archived.

• Web postings: Keep Web content fresh and encourage target audiences to use it by 

driving traffic to the website. 

• eBlasts: Deliver fresh content and messaging that can also drive traffic to the website. 

• Prezi: A cobranded, integrated, automated presentation that stakeholders can use to 

support their energy efficiency efforts.

• Newsletter placement: Drive traffic to the website and other Web tools and increase 

target audience awareness.

• Article placement: Drive traffic to the website and other Web tools and increase target 

audience awareness. 

• Community toolkit: Develop an integrated package of essential communications tools 

to enable stakeholders to easily share and spread key messages throughout their 

communities.

• Case studies: Tell real-world stories that provide insights and inspiration to help 

stakeholders successfully implement energy-saving technologies and demonstrate their 

results.

• Partnerships: Develop national, state, and local partnerships to share information, 

resources, and support.

• Level of effort: Develop a system for determining the level of communication efforts 

(see Figure 7).

Figure 7. Levels of communication effort required for desired results

• Web page

• Fact sheet

• Social media

• Webinar

• Web cross-postings

• e-Blasts

• Newsletter placement

• SBSP collection in reference database

• Web analytics

• Integrated messaging--commercial 

buildings

• Success story

• Article placement

• Newsletter placement

• National events

• Prezi presentations

• Media release

• Video

• Case studies

• National partnerships

•Integrated messaging--BTO 

•Community toolkit

•Earned media

•State and local partnerships

• State and local events

• Integrated messaging--DOE 

BROAD 

AUDIENCE

TARGETED 

AUDIENCE
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4.5.3 Progress Evaluation

A communications plan is a living document and should be reviewed and amended regularly. 

Metrics help managers determine whether the communications plan is meeting its stated 

objectives and should identify opportunities, successes, and needed improvements.

Measurement techniques might include:

• Analytics and Tracking

o eBlasts: Number of times the email is opened and the number of times it is 

forwarded or shared.

o Usability studies: Page views, lengths of visits to page, shares, new visitors, etc., 

tracked and assessed using Web analytics for all related Web resources.

o Webinars: Total number of registrants and participants. If the webinar is 

archived, track the number of times the webinar has been accessed.

o Web page: Website page views, time spent on page, downloads, and shares.

o Fact sheet: Number of downloads and shares.

o Events: Number of participants.

• Increased Stakeholder Awareness

o Number of engaged and active stakeholders. 

o Increase in number of stakeholders and reach of new partnerships.
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References

BOMA. (2013). Building Class Definitions. Accessed January 23, 2013 from 

www.boma.org/resources/classifications/Pages/default.aspx. 

Cassidy, R. (2012a). High-Performance Reconstructed Buildings: The 99% Solution. Building 

Design + Construction. Accessed September 26, 2012, from www.bdcnetwork.com/2012-whitepaper-high-performance-reconstructed-buildings-99-solution.

Cassidy, R. (2012b). Building Design + Construction. Telephone conversation.

CBECS. (2003). Commercial Buildings Energy Consumption Survey. Accessed September 21, 

2012, from 

www.eia.gov/emeu/cbecs/cbecs2003/detailed_tables_2003/detailed_tables_2003.html.

DOE. (2012). Advanced Energy Retrofit Guides. Accessed November 29, 2012 from 

www1.eere.energy.gov/buildings/commercial/aerg.html.

DOE. (2013). Improving the Energy Efficiency of Commercial Buildings, Building 

Technologies Program. Accessed January 7, 2013 from 

www1.eere.energy.gov/buildings/commercial/index.html. 

Finlay, J. (2013). Wells Fargo Bank. Telephone conversation. 

Forbes. (2013). Technology and the Power of Small Business to Drive Innovation and Jobs. 

Accessed March 3, 2013 from www.forbes.com/sites/sap/2012/04/10/technology-and-the-powerof-small-business-to-drive-innovation-and-jobs/.

Higgins, C. (2012). Deep Energy Savings in Existing Buildings: Summit Summary. New 

Buildings Institute.

Institute for Building Efficiency. (2011). 2011 Energy Efficiency Indicator. Accessed January 

11, 2013, from http: //www.institutebe.com/Energy-Efficiency-Indicator/north-america-energyefficiency-indicator.aspx.

Malin, N. (2012). Building Green. Telephone conversation.

NREL. (2013). Proposed Strategic Framework for New Commercial Buildings Research and 

Deployment. National Renewable Energy Laboratory. Draft document, accessed March 26, 

2013.

NSBA. (2011). 2011 Energy Survey. Accessed September 21, 2012, from 

www.nsba.biz/?p=1103.

NSBA. (2012). New NSBA Energy and Environmental Policy. Accessed September 20, 2012, 

from www.nsba.biz/?p=142.

Parker, A. (2012). Audit Tools for Worship Centers. National Renewable Energy Laboratory. 

Personal interview with Andrew Parker.
29

This report is available at no cost from the 

National Renewable Energy Laboratory (NREL) 

at www.nrel.gov/publications.

PGL. (2012). Online Retrofit Tool. Preservation Green Lab. Research data provided by Ric 

Cochrane, September 2012 (unpublished). 

PGL. (2013). Realizing the Energy Efficiency Potential of Small Buildings. Preservation Green 

Lab. To be published in June 2013.

SBA. (2012). What is a Small Business? Accessed September 24, 2012, from 

www.sba.gov/category/navigation-structure/contracting/contracting-officials/what-smallbusiness.

SBA. (2013). FAQ. Accessed March 3, 2013, from 

web.sba.gov/faqs/faqIndexAll.cfm?areaid=24. 
30

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National Renewable Energy Laboratory (NREL) 

at www.nrel.gov/publications.

Appendix A: SBSP Sector Characterization

Information in Appendix A is provided as additional data supporting Section 3 through 

Section 3.2.

NSBA (2011) conducted an energy survey to understand energy efficiency concerns of small 

business owners and operators and learn about the approaches small businesses took to save 

energy. NSBA gathered information from more than 200 members. Of those, 40% cited limited 

cash flow as the primary obstacle to making their businesses more energy efficient; 20% 

identified lack of time to research and implement energy efficiency solutions; and 9% and 8% 

mentioned a lack of resources and available technologies, respectively. Of the businesses that 

chose “other” in this survey, the most common responses were the poor economy, the fact that 

they lease their facilities, and a lack of time. The findings are summarized in Table A–1. 

Table A–1. NSBA 2011 Energy Survey—Main Obstacles Preventing Small Businesses from 

Becoming More Energy Efficient

The NSBA also collected data from all members surveyed on the most common steps they took 

to reduce energy consumption. Table A–2 lists a few of the most important. 
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Table A–2. NSBA 2011 Energy Survey—Most Important Energy-Saving Steps 

Taken by Small Businesses

Primary energy costs were also recorded. From the survey, 31% cited heating and cooling as 

primary energy costs for their businesses (NSBA 2011). Nineteen percent reported that 

operating equipment was a primary energy cost, 6% were unsure or did not know, and 5% 

reported lighting as a primary energy cost (NSBA 2011). Energy cost increases have had mostly 

negative effects on the surveyed members’ businesses. Businesses have responded to these 

increases as outlined in Table A–3. 

Table A–3. NSBA 2011 Energy Survey—Reaction of Businesses to Rising Energy Costs
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PGL (2013) conducted a study of nearly 800 small buildings in 10 U.S. markets and paired it 

with a market prioritization study and analysis of CBECS microdata. This study established a 

comprehensive building typology that identified seven primary building types to target as small 

buildings with a high potential for energy savings. PGL’s research objectives were to identify 

specific types of small commercial buildings that offer opportunities for significant energy 

savings. The research also quantifies the relative magnitude of market influences that affect the 

adoption of energy-saving strategies and determines common characteristics and regional 

variations for the target building types that inform strategies to enhance the energy performance 

of small commercial buildings. Results from the research provide a characterization of the small 

buildings sector with descriptions of regional variations. The research also provides 

recommendations for strategies and approaches to maximize energy savings for the SBSP sector. 

PGL (2013) collected and analyzed data to characterize the sector in three major steps:

1. Conducted an in-depth analysis of CBECS microdata to identify primary building types 

in the sector.

2. Worked with a third-party consultant to conduct a market prioritization analysis that 

identified ownership patterns, operation and maintenance practices, and available 

resources for market subsectors.

3. Conducted a national building survey that examined actual buildings and targeted each 

primary building type identified through the CBECS analysis. The surveyed data 

included physical characteristics, ownership information, and permit data. 

PGL’s analysis of CBECS microdata was used to estimate three main components of the small 

buildings sector: 

• The total size of the small buildings sector

• The relative size of each building type in the entire commercial sector and in the small 

buildings sector

• The energy consumption of the entire commercial sector, the small commercial 

buildings sector, and each building type.

This study excluded some building use types because either: (1) their physical characteristics 

were deemed too diverse in to allow building-type definition; or (2) their market share was too 

small. These building types should, however, be considered in future DOE projects. Included 

and excluded use types are listed in Table A–4.
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Table A–4. Primary Use Types Included and Excluded in the CBECS Data Analysis by PGL

PGL conducted a market prioritization analysis with a third-party consultant to identify 

ownership patterns, operations and maintenance practices, and available resources for market 

subsectors (PGL 2013). This analysis used CoStar and McGraw-Hill/Dodge databases, relevant 

industry reports, and direct project experiences to study how owners, operators, occupants, 

energy management practices, maintenance practices, real estate market fundamentals, and 

energy costs influence the market.

To quantify the energy efficiency potential of these buildings, PGL developed a market 

assessment index called the DEEP (Deep Energy Efficiency Potential) Score. This index 

measures four principal indicators: 

• Energy density: Annual energy use per building of the market segment

• EUI ratio: Ratio of average market segment EUI to national average EUI

• Scale factor: Ratio of the annual energy use of the market segment to the total national 

energy use for the commercial building segment

• Market factor: Rating of the potential for customer adoption of energy efficiency 

strategies for the market segment.

The DEEP Score is calculated by weighting each factor described above and adding all four

together. The factors are weighted by 22% for energy density, 27% for EUI ratio, 25% for the 

scale factor, and 26% for the market factor (PGL 2013). PGL’s DEEP assessment of the small 

commercial buildings market indicates that the subset of seven main small building types makes 

up 49% of all nonmall commercial buildings by number and consumes approximately one third 

of all energy use by nonmall commercial buildings. Table 3 provides the breakdown of energy 

use and share for each building type and Figure A–1 illustrates where each building type falls 

along the DEEP Score index. The DEEP Score index assembles the four components mentioned 

above onto a scale of 0 to 100, and ranks building types by their potential for achieving broad 

market acceptance for deep energy efficiency retrofits.
34

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Figure A–1. DEEP rating for PGL’s target building types 

(PGL 2013)

PGL used results from the CBECS and market prioritization analyses to conduct a national 

survey of nearly 800 buildings that targeted main street buildings (however, valuable information 

about all seven primary building types was obtained) in 10 cities across the United States. The 

cities and climate zones involved in this study are illustrated in Figure A–2. 
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Figure A–2. PGL national survey cities and survey returns by U.S. climate zone 

(PGL 2013)

In each submarket, a team of university graduate students, student coordinators, and faculty was 

organized to survey the buildings and answer several questions: 

• What characteristics are common to each building type nationally?

• What characteristics can be determined that are not captured in CBECS data?

• What characteristics of buildings have the most regional variations?

• How do climate zones influence these regional characteristics?

• Which characteristics are most likely to influence energy consumption?

• What are the physical and legal characteristics of business districts?

The number of buildings and building types surveyed by PGL are summarized in Figure A–3. 

The surveys conducted by PGL’s team consisted of approximately 100 questions that resulted 

in 73 discrete variables that were collected by accessing online building information (municipal 

data and Google Earth), a site visit, and permit history derived from municipal records 

(PGL 2013). 
36

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Figure A–3. National survey results by market and type

Results from the detailed sector analyses conducted by PGL presented seven major research 

findings that characterize the SBSP sector as noted in Section 3.1. Figure A–4 supports the 

research findings statement that most main street buildings were constructed before 1960.

Figure A–4. Comparison of CBECS main street buildings with PGL national survey buildings 

(PGL 2013)
37

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Appendix B: National Needs and Opportunities

Information in Appendix B is provided as additional data supporting Section 3.3. 

The fragmentation and complexity of the SBSP sector have created many historical barriers, 

although opportunities for achieving notable energy savings are significant. As previously 

stated, the sector accounts for 95% of the buildings and 51% of the floor space, and consumes 

more than 40% of the building energy used in the U.S. commercial building industry. PGL 

(2013) estimates that the small building sector consumes 2.8 quads of energy—47% of the 

national total for all nonmall commercial buildings. Assuming a maximum potential energy 

savings of 45%, derived by data presented in the AERGs (DOE 2012), the small building sector 

can potentially achieve 1.07 quads of annual site energy savings, or $30 billion in energy cost 

savings per year. The maximum potential savings may not be realistic in all cases, but this 

analysis illustrates the magnitude of the potential impact of a well-designed SBSP initiative. 

The energy savings potential for each primary building type identified by PGL is shown in 

Table B–1.

Table B–1. Estimated Energy Savings Potential for Each Primary Building Type Identified by PGL 

(PGL 2013)
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Opinions about needs and recommendations for approaches to increase energy savings were 

collected through reports and telephone conversations with key members. PGL’s analysis 

identified three major strategies to encourage significant energy savings across the sector. Those 

strategies are summarized in Table B–2.

Table B–2. Strategies for the SBSP Sector Identified by PGL Research

Strategy Recommended Action Potential Projects

Identify waste, 

measure results

To realize the full energy-saving 

potential of small buildings, energy 

policymakers must support solutions 

that measure, motivate, and monetize 

real energy performance.

Quantify the national impacts of 

conservation investments

Create the data network necessary for 

measuring energy savings

Communicate the economic value of 

eliminating energy waste

Tie energy standards to measured 

performance

Transform the market through leadership 

and performance

Plan for 

improvement

To optimize energy efficiency in small 

buildings, investors must align the 

timing of energy-saving improvements 

with natural opportunities in the building 

life cycle, such as time of purchase, 

operational initiatives, regular 

renovations, emergency and scheduled 

maintenance, and the ultimate sale of 

the asset.

Recognize the full value of energyefficient buildings

Make energy opportunities transparent 

between owners and occupants

Create partnerships that support the 

needs of small businesses and building 

owners

Align new 

business models 

behind solutions 

that scale

To capture energy savings from the 

millions of diverse businesses in small 

buildings, new business models for 

energy efficiency must respond to 

compatible regulations, motivated and 

organized customers, and products 

whose time has come.

Support private and public sector 

research and development that 

implements information gathering at 

scale across utility jurisdictions

Create technical guidance for turnkey 

solutions for small buildings

Encourage nationally coordinated 

programs and business models

PGL’s analysis also identified potential stakeholders to engage in each recommended action. 

Identified stakeholders and details to each recommended action are noted in Table B–3 and 

Table B–4.
39

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Table B–3. Key Actions for Stakeholders (PGL)
40

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Table B–4. Key Actions for Stakeholders (Continued, PGL)
41

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Appendix C: Roles for Potential Collaborators

Roles for potential collaborators were also aggregated and evaluated. PGL lists primary and 

supporting roles of potential collaborators in Table B–3 and Table B–4 in Appendix B. NREL 

researchers also evaluated those and other roles recommended by key stakeholders through 

telephone conversations and reports on the sector. Those roles are noted in Table C–1 and 

Table C–2.

Table C–1. High-Priority Areas for National Standards, Tool Developers, Government Lenders, 

and Local Jurisdictions in the SBSP Sector

Project Type Responsibility Role Source

Standards/codes

National 

standards

Promote the ongoing development of a strong national 

standard that makes business-level energy data seamlessly 

available to utility customers, regulators, jurisdictions, 

financiers, and service providers

PGL

Standards/codes Ensure customer data privacy and security compliance with 

Fair Information Practice Principles PGL

Standards/codes

Add criteria for energy evaluation to the professional 

guidelines and standards for tax assessors, appraisers, and 

real estate brokers

PGL

Tool development Tool developers Work with energy programs such as ENERGY STAR and 

Portfolio Manager to develop criteria for small buildings Malin

Policy Government 

lenders

Implement SBA, Fannie Mae, and Federal Housing 

Administration underwriting guidelines that require energy 

use disclosure on appraisal

PGL

Efficiency 

coordination 

programs

Local 

jurisdictions

Partner with trusted organizations or local entities to 

increase participation in energy efficiency solutions and 

reduce costs for small buildings

Higgins

Efficiency 

coordination 

programs

Provide financing options at attractive rates and use offbalance-sheet options such as Property Assessed Clean 

Energy, performance contracting, utility PPAs, and on-bill 

financing 

Higgins

Efficiency 

coordination 

programs

Streamline access for owners and contractors to participate 

in energy efficiency programs Higgins

Financing programs Determine methods to reduce audit costs and increase 

participation rates Parker

Efficiency 

coordination 

programs

Urban resources can be used to aggregate building upgrade 

strategies through policy and regulatory tools, political and 

cultural interest groups, and advantages of density

Higgins
42

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Table C–2. High-Priority Areas for Energy Regulators, Utilities, and ESCOs in the SBSP Sector

Project Type Responsibility Role Source

Standards/

codes

Energy 

regulators

Support a private market for energy conservation financing that is secured 

by utility PPAs for measured energy savings PGL

Efficiency 

coordination 

programs

Utilities

Leverage business districts and associations to convene energy planning 

workshops that include building owners, businesses, contractors, 

manufacturers, and utility advisors

PGL

Guidance/

Deployment

Recommend packages of (1) low- and no-cost operating strategies for 

businesses and building owners; (2) retrofit measures that produce stable, 

long-term rates of return in small buildings that could be funded with longterm, external capital; and (3) maintenance strategies for small buildings

PGL

Training/

Deployment to 

Contractors

Tailor the content of the packages to smaller general contractors, HVAC 

contractors, and electricians PGL

Financing 

programs

Create innovative partnerships to deliver new sources of capital to energy 

conservation projects, including conventional and tax credit equity, as well 

as on- and off-balance sheet financing

PGL

Regulatory 

requirements

Simplify regulatory requirements and accelerate regulatory processes to 

reduce costs and increase certainty; energy and environmental regulations 

often place a disproportionate burden on small businesses

NSBA

Utility program

Establish utility energy efficiency PPAs at rates on par with generation to 

encourage new delivery models from suppliers that would reduce the 

process and costs to building owners

Higgins

Utility program Encourage utilities to invest on the customer's side of the meter to save 

measurable energy and to achieve a regulated rate of return PGL

Efficiency 

coordination 

programs

Coordinate programs that implement large-scale information gathering PGL

Equipment 

development

Support metering and submetering projects during renovation of small 

buildings Cassidy

Delivery

Utilities/

ESCOs

Aggregate or bundle sets of buildings to create an energy-saving and 

economic momentum to make deep energy retrofits a stronger business 

model through reduced transaction costs and the ability to leverage services 

and solutions

Higgins

Pilot program Develop pilot programs that package a range of buildings into a single 

delivery effort with low-interest capital for financing

Delivery Simplify delivery of energy services by enhancing and expanding third-party 

service provider models—contractors, ESCOs, and owner consortiums Higgins

Training/

deployment to 

contractors

Support and expand third-party delivery, direct install, aggregators and fullmarket ESCOs to deliver increased savings to a much greater range of 

existing buildings

Higgins

Delivery

Support incremental improvements over time that can be made in 

conjunction with major events. This will produce cumulatively greater 

energy and dollar savings than waiting to undertake the whole job much 

later.

Cassidy
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Appendix D: Web Page and Promotional 

Recommendations 

To support the SBSP project, the NREL Communications Office recommends building a single 

or small number of “standard” Web pages for DOE’s EERE website, which could be expanded at 

a later date

The NREL Communications Office recommends a basic approach in developing a website that 

will engage stakeholders and increase awareness of the SBSP initiative:

1. The Web page should reside on the EERE Commercial Buildings website.

2. Standard Web pages would include text and graphics (see Figure 2 and Table 5). The pages 

should include links to information about the projects, collaborators, and impacts/metrics.

The NREL Communications Office could help with activities, such as: 

• Content development: Update and augment the website as the project reaches important 

landmarks.

• Analytics: Track statistics on the page via Google Analytics, and report results to the 

NREL research project lead in monthly or quarterly reports, as requested.

• Project promotion: Promote the SBSP initiative and activities through home page 

features, BTO news stories, and EERE corporate-level work (press releases, progress 

alerts, home page news stories), and posts to the EERE Facebook page (upon approval).

• Search engine optimization: Develop well-written content and identify key phrases and 

terms to ensure that the page appears foremost in popular Web searches.

• Usability testing: Conduct analyses to determine how page(s) are working for the 

audience.

• Social media and other special features: Use EERE tools, including blogs, newsletters, 

and widgets, to promote the SBSP website and initiative.