Rising energy prices and growing concerns over global warming are helping ensure the growth of the green buildings market in North America. Government involvement in ways such as tax credits provide good incentives to establish green buildings, as do a number of new and innovative financial solutions that address the cost issues associated with such buildings. Furthermore, green building market participants are adding to the attractiveness of this growing concept by now delivering more comprehensive solutions such as incorporate distributed and onsite energy solutions, as well as performance contracting and non-performance-contracting fee-based activities.

New analysis from Frost & Sullivan (http://www.building technologies.frost.com), Green Buildings - A Strategic Analysis of the North American Markets, reveals that revenues in this market totaled $8.0 billion in 2005, and based on US LEED registrations and certifications is expected to grow at 20 to 30 percent per annum through 2010.

“Green buildings are increasing in popularity in Canada and the United States due to their potential to reduce building energy costs, mitigate greenhouse gas emissions, consume less water (thus relieving municipal water and wastewater provision burdens) and add building value,” notes Frost & Sullivan Industry Analyst Jorge Moreno. “The U.S. green building council (GBC) for leadership in energy and environmental design (LEED) registrations and certifications estimates the market’s annual growth potential at between 20 and 30 percent, indicating good overall market potential and growth.”

Among the individual market segments, the green energy management market that appears to be most advanced. The segment is now beginning to expand its activity beyond the most common lighting and heating, ventilation, and air conditioning (HVAC) initiatives, although addressing these two issues alone can significantly reduce energy and enhance productivity. Of the remaining market segments, the green facilities management markets are only beginning to develop, and the green water management market is further ahead of the facilities management market, but also still a bit nascent.

“Notwithstanding the positive outlook, real and perceived budget barriers, particularly for first costs that include LEED certification, commissioning, innovative technologies, and on-site renewable energy alternatives have limited growth of the North American green energy, water and building facilities management markets,” notes Moreno. “Besides, while much of the focus in the green building industry to date has been on new constructions, the biggest challenge lies in bringing about changes to existing buildings (EB).”

The ratio of the number of people working in EB to new construction in the United States is about 85 to 1, and as such the EB sector where most of the energy is consumed. The sector, therefore, holds immense potential for growth, and the potential economic effects of greening the EB stock are likely to be significant in the current economic environment, where corporations and nations are on the lookout for means of enhancing productivity.

“In order to further the case for green buildings, it is critical to quantify the value of green buildings over traditional ones, so that lenders, insurance companies, and property owners can better understand the financial benefits of greening,” say Moreno. “Education and awareness are also major factors that can promote market growth, and companies must definitely incorporate performance contracting as a way to bypass the capital cost.”