Month: April 2015

Costa Rica powers nation sans fossil fuels, serving as example for the region

By Nancy San Martin,
View the original article here

NEW POWER SOURCE: Arenal, a dormant volcano, is seen in the town of La Fortuna in the province of Guanacaste, Costa Rica. The power company managed to produce all of the electricity for the nation from renewable energy sources for 100 consecutive days ending in mid-March. The milestone was reached with the use alternative power sources, including hydroelectric power plants. Joe Raedle Getty Images

NEW POWER SOURCE: Arenal, a dormant volcano, is seen in the town of La Fortuna in the province of Guanacaste, Costa Rica. The power company managed to produce all of the electricity for the nation from renewable energy sources for 100 consecutive days ending in mid-March. The milestone was reached with the use alternative power sources, including hydroelectric power plants. Joe Raedle Getty Images


In the heart of this western province where scalding water emerges from the earth and peaks of volcanoes kiss the hovering clouds, sunshine, wind and rain have been culled to create a source of power that has earned this nation a gold star in renewable energy.

For 100 consecutive days ending in mid-March, Costa Rica did not use any fossil fuels to generate electricity. Instead, it relied on primarily hydropower plants to light up households across the country, with added power generated from wind, geothermal and solar projects.

Experts say Costa Rica’s fossil fuel-free streak is impressive though not a surprise: The nation of nearly 5 million people has pledged to become carbon neutral by 2021 and the country’s electricity matrix, on average, is already nearly 90 percent renewable, making Costa Rica the second most “renewable country” in Latin America following Paraguay in terms of electricity generation, said Juan Roberto Paredes, senior renewable energy specialist at the Inter-American Development Bank (IDB).

Paredes points to the country’s diversified sources for renewable energy as its hallmark. By relying on various sources, Costa Rica has been able to both provide electricity and keep costs down by not having to import a large amount of costly fossil fuels.

“The lesson to be learned is in diversification,” Paredes said. “You can have stability in the longer term, as it relates to electricity prices, if you rely on various renewable sources as the fuel price will always be zero.”

Felix Mormann, a University of Miami law professor who teaches and writes about environmental law and policy, said Costa Rica’s achievement is noteworthy.

“Sourcing 100 percent of energy needs from renewables is amazing,” he said. “The fact that they did not have to burn any fossil fuels is outstanding.”

Like other countries relying on renewable energy, Costa Rica gets most of its carbon-free electricity juice — about 80 percent — from hydropower plants operated by the state-run utility provider, Costa Rican Electricity Institute (ICE). But this year, geothermal, solar and wind energy sources have given the nation an additional boost to limit the use of coal or petroleum to keep light bulbs glowing and appliances humming.


At the ICE hydroelectric plant and reservoir in the shadow of the Arenal volcano near the town of Tilarán, the production of electrical power is generated through the use of the gravitational force of water stored in the reservoir that flows through turbines connected to large generators. This plant provides some 21 percent of energy for the country, said supervisor Alberto Sanchez Fernandez.

“Since we were children, we have been taught to respect nature,” Sánchez Fernández said. “In that sense, this country has gotten better because those lessons go back a generation and it’s ingrained in our children. The fact that my country is producing energy from 100 percent clean sources, makes me very proud and satisfied that we are helping protect this planet, the only place we have to live.”

Sánchez Fernández said when children visit the plant on field trips, “I always tell them that mankind, before dying, should have at least conceived a child and planted a tree.”

Along the hilltops, giant wind turbines like those of an airplane propeller, can be seen circulating at various speeds, depending on the strength of winds that flow through the area. The windmill project began in the 1980s and about 30 wind turbines can now provide electricity to about 26,000 homes.

“This accomplishment is the result of making use of our natural resources and experimentation,” said Carlos Manuel Quiros, a company spokesman.

Tilarán, the town’s name, comes from the indigenous word “Tilawa.” It means place of wind and rain.


Billboards in Bagaces and nearby towns dub the area as the cuna (cradle) of geothermal. Power lines emit a high-pitched sound that can be heard for miles, like crickets on steroids. And the smell of sulfur is reminiscent of the odor that comes from cracking warm hard-boiled eggs.

The geothermal plants Miravalles I y II use subterranean heat to produce electricity. Wells are drilled deep into the earth and the water that comes out of the wells are 85 percent liquid and 15 percent steam. The steam is used to turn large turbines, which run electrical generators. Some 35 wells in the area are used for production, said Darlyn Gutierrez Rodriguez, an assistant engineer.

“The advantages of geothermal is that it’s not dependent on seasonal variations,” she said. “It isn’t dependent on whether it rains or is windy or sunny. It’s constant production.”

Geothermal now contributes about 14 percent of Costa Rica’s energy and will likely grow as the government makes further investments. In a country with six active volcanoes and dozens more inactive, geothermal provides an exceptionally reliable source of power, experts said.


Just a short drive away, is a solar panel farm built with equipment donated by Japan. The project, comprised of 4,300 panels, began in 2012 and now provides electricity to about 550 homes, said supervisor Mauro Arias.

“For us, it’s been very novel, very important, because it’s an experimental plant,” he said. “Without a doubt, we have a good location for this solar plant…We are able to document, minute by minute, the output of solar energy…We are the pioneers in Central America.”

While the power produced by this method remains small, Arias said similar farms have been built in neighboring Nicaragua and Panama. “It’s cheaper, cleaner for the environment,” he said.

Other countries in the region could follow Costa Rica’s steps about diversification as they also have untapped renewable potential. This is the case of geothermal resources in the Andean countries where volcanic activity is comparable to Central America but no electricity so far is produced with the heat of the earth, said Paredes of the IDB.

But even as the use of renewable energy is applauded, there are potential setbacks. Droughts come from limited rainfall, which can affect electricity production. Wind and solar availability can vary from year to year. And, of course, there’s the issue of climate change.

“The but is maybe the variability of these renewable sources,” Paredes said. “We can’t be 100 percent sure of what will happen next year.”

Storing energy in an efficient manner also is a work in progress that will get better with technology. In Central America, the IDB is supporting the electricity market with Costa Rica and five other nations: Guatemala, El Salvador, Honduras, Panama and Nicaragua.

“In order to cope with this variability, you can diversify and use complementary renewable sources such as wind and hydro, use smarter grids to manage variations better and have more interconnections to other countries in case you have excess electricity,” Paredes said.

For Costa Rica, the more measurable results of its renewable energy success will be known by early 2016 when a full year worth of data will be available to compare with the previous year. By then, the largest hydropower plant in Central America should be in operation. The Reventazón Hydroelectric Project, located in the eastern province of Limón, is expected to be ready for operation by January.

Whether Costa Rica’s renewable energy model can be implemented in other countries will depend on the topography and climate, said Mormann of UM.

“Costa Rica is a small country and has a very special resource mix,” he said. “Costa Rica did not do this to do the rest of the world a favor. In their particular situation, it made the most sense. This is more about setting an example that it can be done.”
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How you can help make Florida the Sunshine State again


By Julie Lundin, LEED-AP ID+C,
Principal, Emerald Skyline Corporation 



Florida is undeniably sunny. “The Sunshine State” was adopted as the State Nickname in 1970. It is used on FL_Sunshinemotor vehicle licenses, welcome signs and marketing campaigns. While Florida promotes itself as the Sunshine State we are not utilizing our most abundant and natural resource, solar power.

What is solar power? It is energy from the sun that is converted into thermal or electrical energy. Solar energy is the cleanest and most abundant renewable energy source available. The U.S., including Florida, provides some of the richest solar resources in the world. Only two other states, California and Texas, have more rooftop solar power potential than Florida, according to the U.S. Department of Energy. Based on Florida’s size, rebounding economy and growing population our state should be a leader in the generation and promotion of solar energy.

So why isn’t Florida a solar energy leader?

The reason is simple: Florida’s large utility monopolies and lawmakers have worked successfully to block and control who can generate solar energy and what it can be used for; thereby restricting its use by homeowners and businesses. Florida utility monopolies exist today due to a law that was created over 100 years ago which was trying to avoid a tangle of power lines strung up by competing companies.  This same law restricts solar companies from installing solar panels on roofs and selling back electricity. It is considered a third party sale and is illegal in Florida.

  • Florida is now only one of four states in the nation that prohibit citizens from buying electricity from companies that will put solar panels on a building.

Due to the influence and power of Florida’s utility monopolies, there is a large effort to discourage renewable energy in the state. The large utilities are afraid of losing their monopoly and the lucrative profits that the government guarantees them. Recently lawmakers, at the direction of the utility companies, gutted the State’s energy savings goals and entirely eliminated Florida’s solar-rebate program.

Floridians should have access to solar power and free market choices. We should be allowed to contract directly with solar providers to power our homes and businesses with solar energy. We are currently being denied the right to choose solar as a power source. The free market and competition benefits all of us. Solar energy makes financial sense. That is why business leaders in America’s brightest, most competitive companies are increasingly choosing to install solar energy systems at their facilities. The price of solar energy has fallen dramatically over the past few years while the price of fossil fuel generation continues to experience volatility. America’s businesses are turning to solar power because it’s good for their bottom line.

  • According to a report by the Solar Energy Industries Association, Walmart is the top corporate user in the United States with 105 MW installed at 254 locations.
  • The average price of an installed commercial PV (photovoltaic) project in 2Q2014 was 14% less than the cost in 2013 and was over 45% less than it cost to complete in 2012.

Electricity costs represent a significant operating expense, and solar provides the means to reduce costs and hedge against electricity price increases.

  • The Solar Means Business report noted that the top 25 companies for solar capacity had more than 569 MW of solar PV at 1,110 different facilities in a survey conducted last August. These results represent a 28% increase over the prior year and a 103% increase over 2012.

Clearly, solar power is a great untapped resource for the Sunshine State – one that can benefit residents as well as businesses. It is time to enable Floridians to have unfettered access to this inexpensive energy source – and you can help in the process:

The Florida resident-led solar group, Floridians for Solar Choice, is seeking to make solar more accessible in the state. They are seeking your signature on a ballot petition.

  • The petition seeks to expand solar choice by allowing customers the option to power their homes or businesses with solar power and chose who provides it to them.

Floridians for Solar Choice have reached 72,000 signatures on their petition which clears the way for it to be reviewed by Florida’s Supreme Court.

  • The Supreme Court will decide whether or not the petitions language legally qualifies it to be a ballot initiative for Floridians in 2016.

Getting its petition on the 2016 ballot is the main goal for Floridians for Solar Choice. They need over 600,000 more signatures to have this critical citizen initiative to be put on the ballot for next year.

Please visit their website to learn about the solar initiative to remove this legal barrier to making Florida the Sunshine State again, and, more importantly, to sign the petition, go to:

LEED Project Update




By Julie Lundin, Founder,
Director of LEED Process Management for Emerald Skyline Corporation


Emerald Skyline Corporation in conjunction with Golden Spiral Design, is designing, renovating and repurposing an unoccupied industrial building located in Boca Raton, FL. This distinctive commercial building will include many sustainable features with the intent to obtain LEED certification from the USGBC.















Proposed LEED Certified Building

For general information on this project please Click Here to see our last post.

We have been busy working on the design and drawings in preparation for submission to the City of Boca Raton Development Services Department. The design of the building has taken many twists and turns over the last few months. Since we are doing a major renovation and constructing a second floor, the design and location of the stairs and an elevator have been instrumental in our building’s design. As with any project, the site plan and its setbacks limit the building footprint that will be utilized.

Based on our site plan, we do have the space to bump the front of the building out to accommodate our new staircase. This allows us to construct the stairs without having to penetrate the existing building ceiling membrane. In addition, it creates an interesting design element that does not deduct precious square footage for the stairs construction.

We have also decided to locate the elevator on the outside of the building. Again, an exterior location will not deduct square footage from the base building plan. Since the elevator shaft will be located on the exterior, building fire codes will be different than if the elevator was located internally. We are anticipating that the elevator will be a prominent design feature and contribute to the aesthetics of our project.

As stated in our previous post, this project is a proposed LEED certified building. A key component of a LEED project is its reduced energy use. Our initial design utilized solar rooftop panels to generate power for the building even with the hopes of generating enough power to sell back to the grid. Florida’s large utility monopolies and lawmakers have worked successfully to block and control who can generate solar energy and what it can be used for; thereby restricting its use by homeowners and businesses. The Florida legislature, at the direction of the utility companies, have gutted the state’s energy savings goals and entirely eliminated Florida’s solar-rebate program. Due to this situation, we are now exploring alternative methods of energy including fuel cell technology powered by natural gas.

There is a pro-solar group in Florida, Floridians for Solar Choice, that is seeking to make solar more accessible in the state. Their ballot petition seeks to expand solar choice by allowing customers the option to power their homes or businesses with solar power and chose who provides it to them. Please visit their website to learn about this initiative and sign the petition.

If the benefits of a sustainable retrofit are so robust, why isn’t everyone doing one?

PJ PicturePaul L. Jones, CPA, LEED Green Associate, Principle, Emerald Skyline Corporation

A sustainable retrofit includes replacements and upgrades that result in lower energy, operating and maintenance costs as well as improved occupant satisfaction. A sustainable facility will have a small carbon footprint, limited environmental impact and conserves natural resources. They can range from replacing conventional lights to LED bulbs, adding motion-control switches and installing low-flow water fixtures to installing a green roof, replacing the building skin and adding solar panels to all of the above.

When you fully understand the economic benefits of doing a sustainable retrofit which include lower expenses and rent and occupancy premiums resulting in higher NOI as well as reduced cap rates resulting in higher long-term values, you realize how few property owners, managers and tenants have actually made the decision to pursue an upgrade of their building(s), it initially does not compute a United Nations Environmental Program Finance Initiative Investor Briefing entitled “Unlocking the energy efficiency retrofit investment opportunity” reports:

  • Buildings with the Energy Star label had significantly stronger performance than similar unlabeled buildings: 13.5% higher market values, 10% lower utility costs, 5.9% higher Net Operating Income (NOI) per square foot, 4.8% higher rents and 1% higher occupancy rates.
  • A study using Co-star data concluded that LEED-certified buildings and Energy Star rated buildings versus non-rated buildings had 8% higher effective rents (a function of both the rental amount and the occupancy rate) and a 13% sales price premium.

See also my article, “Welcome to Sustainable Benefits – Let’s begin with the benefits of doing a commercial building sustainable retrofit” for additional survey results and case studies that demonstrate the results building owners and managers have realized.

In a 2012 study by The Rockefeller Group and Deutsche Bank Climate Change Advisors, however, reported that approximately $72 billion in capital is needed to be invested in sustainable retrofits to effect profitable energy efficiency in the existing building stock. However, the total spent in 2012 was just $1.5 billion.

Once you understand the relative perspective of the stakeholders in both the investment and the benefits, the resistance to effecting a sustainable retrofit can be understood.   Let’s dissect the framework in which the decision to make sustainable improvements are made and the issues and motivations that cause a property owner not to update and improve their property which are:

  • Short-term investment horizon
  • Incongruous lease structure
  • Capital and operating budget limitations
  • Financing availability, complexity and/or cost
  • Limited knowledge, time and/or motivation to effect energy upgrades

Understanding these investment, operational and financial constraints is the first step in developing solutions that will result in making the sustainability and resiliency of the existing stock of commercial buildings feasible and practical.

Short term investment horizon:

In the era of REITs, CMBS, hedge funds, crowdfunding and private equity, investment hold periods are frequently in the 3 – 7 year range when investors can typically optimize the IRR and other profitability measures or bail on a bad investment and reallocate their capital. As a result, many investors will only consider sustainability measures that have a two-to-three year payback period. Deep energy retrofits with savings of 30% to 50% that result from retrofitting multiple building systems requiring more time and capital to effect are tabled and not done.

Solution: The current and prospective investment environment will continue to reflect hold periods that are relatively short; however, the solution is for investors, owners and managers to realize that a sustainable retrofit enhances the long-term value of the property and will cause investment returns to increase. Including the costs and benefits of upgrading a building is a common way for sponsors to demonstrate the inherent value of a property – especially one that is not fully leased or suffers from functional obsolescence or poor aesthetics and other physical limitations on its marketability to prospective tenants. Many business plans include upgrading a building from one class to a higher class which results in increased rents and lower cap rates. As evidenced by many studies, including sustainability and resilience in the business plan is an increasingly important component in any market-oriented building upgrade. The solution is for sponsors, investors and owners to realize this and to put it into practice.

Future articles will present sustainable ideas many of which can be implemented with no capital investment required.

Incongruous Lease structure

Commercial buildings, a/k/a income properties, are leased to tenants pursuant to a variety of lease structures with the four most common being as follows:

  1. Gross Lease, or full service gross, is a lease where the landlord/owner collects a stipulated rent amount and is pays all expenses including real estate taxes, insurance and operating expenses that are comprised of utilities, repairs and maintenance and management. The room rate paid for a night in a hotel and a lease for a self-storage unit are examples of gross leases.
    • Apartment leases are typically considered to be a gross lease as the landlord is usually responsible for all operating expenses including real estate taxes, building insurance, common area maintenance and utilities, and property management while the tenant is responsible for the unit’s electricity (and sometimes water) and interior maintenance.
  2. Modified Gross Lease is a gross lease where the landlord/owner collects a stipulated rent amount plus a reimbursement of real estate taxes, insurance and operating expenses which exceed an agreed upon amount which is typically an estimate of the building expenses for the initial lease or calendar year. Typically, at the end of the year, the actual expenses are reconciled to the estimate and any increase is passed to the tenant based on its pro-rata share. Most multi-tenanted office buildings are leased pursuant to modified gross leases.
  3. Net Lease is a lease where the landlord/owner collects a stipulated rent amount plus building expenses which include real estate taxes (net), taxes and insurance (double net); or taxes, insurance and operating expense (triple net) depending on the terms of the lease. If the building is multi-tenanted, the tenant pays its pro rata share.   Most net leases are currently triple net. Retail properties are typically leased using a triple net lease.

In a standard Full Service lease, there is no split incentive in the lease structure as any and all savings realized from a sustainable retrofit inure to the benefit of the owner; however, the property manager may not be incentivized to promote a retrofit as it would be responsible for supervising and effecting the improvements without any additional management fees. With regard to an apartment complex, the landlord’s incentive to invest in energy efficiency measures is limited to the common areas – or to improve the competitive position and marketability of the units to prospective tenants.

In a standard Modified Gross lease as well as a Net lease, the landlord/building owner is not incentivized to invest the time, money and personnel resources to effect a sustainable retrofit as the landlord receives no direct financial benefit as the tenant pays the operating expenses and receives all of the benefit of lower operating costs.

Solution: Creating a lease structure that equitably aligns the costs and benefits of efficiency, sustainability and/or resiliency between building owners and managers, known as a green lease, aligned lease, high performance lease or energy efficient lease, will create sustainable and substantial benefits, both quantitative and qualitative, for both tenants and owners/landlords.

  • According to Jones Lang LaSalle, “A green lease need not be complicated. Often it merely requires structuring terms and agreements already in place, such as temperature settings and building operating hours, in a fashion that provides sustainable cost savings with negatively impacting building performance.”

To effect a green leasing program that includes both current and prospective tenants, engaging a consultant that understands both commercial lease structures and efficiency and sustainability retrofits to maximize the sustainable benefits to be derived therefrom.

Green leases will be addressed in detail in a future article.

Capital and operating budget limitations

Many properties suffer from a breakdown in communication and financial planning between building managers and building owners.   Building managers typically operate a facility pursuant to a one-year budget which causes them to budget and implement projects with a short term (1- 2 years) payback period. Consequently, capital improvements that have a longer payback period are not often recommended by management, or if recommended, not implemented by ownership due to a combination of knowledge, time or motivation to consider an energy upgrade or a perceived lack of available capital. This short-term horizon again limits the nature and extent of any efficiency or sustainable upgrades and prevents ownership from reaping all of the economic benefits that inure from a building retrofit.

Further, many times neither building ownership nor building management understand the nature and availability of financing options, tax credits, utility and local government rebate programs. Some of the programs, or a combination of programs, can result in building owners not having to come out of pocket to fund the improvements; however, the unique nature of them requires time which is typically focused on achieving the primary business goals of the organization.

Solution: Engage a sustainability consultant with knowledge of property operations and management as well as the nature of the available financing, credits and rebates – and how to source and evaluate alternatives in order to minimize actual investment dollars and the cost of any financing incurred.  Conducting a life-cycle analysis in addition to other financial analyses will provide ownership with the information needed to make the business decision.

Future posts will present investment analysis tools and methodologies with examples of the real economics of sustainable retrofits.

Financing availability, complexity and/or cost

Contrary to popular belief, energy efficiency and sustainability retrofits benefit from a variety of financing alternatives. However, for real property professionals who work with mortgage loans, mezzanine loans, preferred equity and similar forms of financing, retrofit financing options ranging from equipment leases to ESCO (Energy Service Company) contracts and PACE (Property Assessed Clean Energy) liens is a whole new world. When you add in the variety of tax credits, utility rebates and vendor financing, the options become complex.

Further, the sources for financing a retrofit are not usually the same ones that provide mortgage financing so it is a new arena which makes accessing sources and evaluating options time consuming and prohibitive.

Solution: Engaging a professional who is familiar with the types and sources of retrofit financing as well as the typical structures and issues of which owners should be aware is the easiest and most efficient way to determine and evaluate the options based on the financial and non-financial objectives of the owner.

The various retrofit financing options, examples of tax credits and utility and municipal rebates will be described and explained in future posts.

Limited knowledge, time and/or motivation to effect energy upgrades

In today’s competitive commercial real estate environment that is still recovering from the devastatingly harsh Great Recession of 2007, keeping your focus on the primary business of keeping space leased (as hoteliers say – heads in the beds) and watching every penny to the bottom-line is the first priority of owners and managers.

Even though the results of an efficiency, sustainability and/or resiliency retrofit provide a substantial boost to the net operating income (and cash flow) of a property, it does not become a high priority item due to lack of understanding of the process, the capital, management and labor requirements, the extent of the potential disruption to operations and tenants as well as knowledge of the additional value (rent premiums, occupancy premiums, higher quality tenancy, lower cap rate, increased investment value) and business benefits (reputation, image, goodwill) to be derived therefrom.

Also, many times building management staff, who may have the understanding of the sustainability technology will not have the financial literacy to present a compelling case to ownership.

Further, many energy service providers (who are typically considered to be the expert in facilitating a retrofit) do not know or understand the financing options that are available to building owners. Accordingly, these professionals are not able to property advise an owner on energy project financing.  Accordingly, many owners are not aware of, nor understand, the variety of financing mechanisms available to them.

Solution: Learn enough to realize that it is worth the time to learn about the options that are available, hire a sustainability consultant, architect or engineer to analyze the property, benchmark its energy and water usage and understand other maintenance practices, have the systems retro-commissioned to determine how well they are performing and develop an efficiency, sustainability and/or resiliency retrofit plan. Implement the plan and start realizing the benefits.

Our Sustainable Benefits blog will be your resource to learn and understand the new world we are transitioning into – one in which we leave the world better off for having lived (Emerson).