DC’s Building Energy Performance Standard Should Drive “Coopetition”

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BEPS

James Ball headshotGuest blog written by James Ball, Vice President of Business Development at MaGrann Associates.

We, the national capital region’s building industry, need an effective strategy for how we will successfully bounce back from the COVID-19 pandemic while simultaneously meeting the energy efficiency goals set by DC’s Building Energy Performance Standards (BEPS). With the BEPS Task Force about to release the details of this innovative policy, this is a critical time for us to come together as a community of building professionals.

The Building Energy Performance Standards provide us with the opportunity to rethink and renovate our existing building stock to help our region thrive in today and tomorrow’s competitive global real estate market. Achieving this rejuvenation of our buildings will take a unified front from all disciplines and practitioners. Our success will be measured by our building performance results, their cost effectiveness, and our industry’s overall competence and capacity to serve the BEPS market. With the regulations adopted and compliance timeframe set, the question we have to answer now is not what we need to do or even when we need to do it, the only question remaining is how.

I commend the District’s Department of Energy and Environment on pioneering a policy to achieve our community’s climate mitigation goals. Now it is the local building industry’s turn to respond to this call for change. Having worked both on the policy and private sector sides of these issues, I can share from experience that it is critical that the industry focus on the big picture and not become lost in the minutia and legalese of regulation specifics.

Let’s be clear, the intent of BEPS is to ambitiously reduce carbon emissions from existing buildings—the largest source of greenhouse gas emissions in the District. If we as an industry can align our strategies on how we meet this goal, we can reduce wasted effort and unnecessary expense. So, what is our plan as an industry to take on the implementation of BEPS? More than merely making suggestions, we need an action plan. I to propose we use “coopetition.”

Coopetition is an ideal business strategy when a market has the potential to grow rather than be carved up by its existing constituents. “Coopetition is the act of cooperation between competing companies by forming a strategic alliance designed to help both companies. The aim of coopetition, and the model itself, is to move the market from a zero-sum game, where a single winner takes all, to an environment in which the end result benefits the whole and makes everyone more profitable” (Investopedia.com).

Coopetition is the premise behind many trade associations and standard-setting organizations that have created markets for energy ratings, program verification services, and more. In DC, right now, BEPS provides certainty that the market for energy efficient buildings will grow—and that the economic opportunities to participate will be aplenty. The bigger risk than scarcity, the real monster outside the door, is a failure to succeed in implementing BEPS compliance cost effectively and at scale. The risk of losing profit while complying with BEPS will not be due to the actual work needing to be done but by misapplied strategies and an unprepared labor force that will not deliver the results promised, thereby sinking money into wasted efforts.

I have seen coopetition succeed. My career in green buildings started with Habitat for Humanity in Central Arizona where we built the first LEED Platinum-certified Habitat for Humanity home in the country. The market for green building was nascent in the early 2000’s and the group of companies serving that market in Arizona was small. I went on to work for one of them, Energy Inspectors, now a large home energy rating company that spans the southwest and more. Back then, we would frequently meet with our competitors at industry events and, by the request of the local utility companies, discuss how we could best grow the market for energy-efficient homes. I give the utility companies a lot of credit for convening competitors in a safe space where we didn’t need to give away any competitive edge and yet could work through the challenges we faced and shared in order to remove market barriers and increase adoption of programs such as ENERGY STAR and LEED. We had over 80% market penetration of ENERGY STAR in the single-family home market when I left Arizona to move to DC.

If you are not convinced that coopetition could be an effective strategy right now in DC and are thinking of just working with the people you know and continuing to carve out the niche that you have, I implore you to consider the following: Since the building energy efficiency movement was founded in the 1970’s, we have more than once created new problems while trying to solve the problem at hand. Back then, it was sick building syndrome. Now we are seeing rampant moisture issues. Both could be avoided with mutually agreed-upon, better industry practices.

Our industry does not lack experience or even expertise, we lack consensus. I have been at the design table too many times disagreeing with my project team members. The problem was not who was right at that moment, only that we were not providing our mutual client with a clear understanding of the issue. As professionals in this arena, we know we serve our clients better when we work through our industry’s debates outside of the design room.

Let’s be humble and ambitious in how we approach the new regulatory environment in and around DC. We owe it to the people that live, work, and play in our buildings to get this right. The world will benefit from how our nation’s capital rises to the challenge of remarkably reducing our carbon emissions. Let the coopetition begin!

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