Kevin Surace and Serious Materials retrofitted 6,514 windows in the Empire State Building with high-efficiency units. Owner Tony Malkin says the project pays for itself in three years. The segment explores whether this retrofit model can scale across other buildings.
So let's get right to our first idea. It involves a building that you may have visited. King Kong did. The Empire State Building. How could such a symbol of a time gone by be home to tomorrow's innovation? What's old is new again. In this case, possibly the most iconic structure in the world, and where innovation meets energy efficiency and a New York state of mind. Devin Green and Christina Suelia, Planet Forward students at the George Washington University, heard the Empire State Building got new windows, so they went to check them out. Just how many windows? Okay, we got about 110 floors.
11,650.
110 times 5,500 plus 6,000.
6,354.
It's got 6,514 windows, some 26,000 Panes of glass. That can't be right. Retrofitting for energy efficiency is not new, but, um, doing it on the level that the Empire State Building did in a 1931 building is rare.
Wait, this man really retrofitted more than 6,000 windows? Is he serious? To find out, we left Manhattan for Sunnyvale, California, to meet Kevin Surace. Surace is head of Serious Materials, And after a career as an engineer and software maker, he discovered the market for creating energy-efficient building materials.
Some little-known facts, right? Buildings all up, including the materials and the operations of our buildings, on a worldwide basis contribute about 52% of the world's energy-based CO2. 52%! By the way, cars, passenger cars, are only 9%. So it turns out that our buildings, the construction field, has had Very little change in a very long time, like 100 years. And because it's been so long, there's a big opportunity in buildings that nobody wants to touch.
His innovative ideas led to his work on the Empire State Building. He's been Inc. Magazine's Entrepreneur of the Year.
You know, when you look at an open hole in the wall, it's an R-0. R-0 means, you know, there's no resistance to heat flow at all. R means resistance to heat flow. And R-1 is a little bit better than that. R-2 is what dual-pane clear windows are. High R-value windows are built in a unique way. They have multiple chambers separated by suspended film. That clear film goes in, it goes in with a special set of spacers and other sealants, and then we fill it with gas, and that's a krypton-argon blend. Of course, the Empire State Building is a fantastic project. We replaced all 6,514 windows. They were dual-pane, and now they're 4 times better than dual-pane. We took all that glass out at night. We actually reused the glass for the very first time ever done.
So was this enormous project really worth all the effort? We decided to go see for ourselves and get some answers from the man who owns the place, Tony Malkin. His family has been in real estate for 4 generations. Energy efficiency is good policy, he says, but it also can be great business. So what's your payback on all of this?
All of it together?
Yeah.
Our net additional costs for energy efficiency measures at the building over our original budget Our budget is $13 million. Our savings per annum based on energy costs at the time we signed the contract, $4.4 million. So it's a 3-year payback.
So a 3-year payback for all this.
Is that right?
And then we'll save that money every year. We have done more leasing in this building since we initiated this program over a shorter period of time than ever before, possibly even than when the building was built.
Not everybody can afford to do this. So how replicable is this? Because this city is filled— I think something like 40% of the buildings here are older buildings.
It's extraordinarily replicable. If you look at a lifecycle cost analysis of a building, just like a car or a plane, it has— every system has a useful life. So a building which is 25 years old may be thought of as a new building, but its systems are already aged and need to be replaced. But if you can afford to renovate your building, you can absolutely afford the additional cost.
Green has to be green. Green can't be, oh, isn't it nice? If you really want to be successful, green puts money back in your customer's pocket. So you got half the country that goes, climate change, I want to do something, you know, to help that. And you got the other half that says, I'll never go out of my way for climate change. But 100% of the country wants to save money. So if you make products that save money, you've got a winner.
Governor Granholm, our students who shot that piece, Christina Suelia and Devin Green, are here with us. Were they onto something? And as a governor with a lot of buildings in the state where you were governor, how do you pay for that?
Yeah, A, they're absolutely onto something. We say all the time that the cheapest fuel is the fuel that you don't have to use, right? The cheapest fuel is the 5th fuel or the 1st fuel, which is energy efficiency. The question that you raise though, and this is the first thing I had, is maybe the Empire State Building can afford We can afford to front-load some of the money to do that and we'll get the payback over a long period of time. But can everyday citizens afford to pay that money up front? I have a feeling we're going to be talking a little bit about that this evening. But it is a very key question because if you can answer that, when you really can put green back into people's pockets, then you will have cracked the code on how to make sure that energy efficiency is sustainable and is at scale for everyday citizens.
Tom Connolly, you're a businessman. Getting to the bottom line is what Malkin was all about. It's what that piece was all about. But how do you do that if you're not the Empire State Building?
Absolutely. And maybe it's not just about windows, it's about other forms of efficiency. You can change the windows in your house. You can change the way you consume electricity. Turn off the lights. Turn the thermostat down in the winter and up in the summer. First steps that all of us can take. I like this piece because it's participatory. There's a message in it for all of us, and we can start acting on it immediately.
What resonates in what you saw?
Well, a couple things. I blogged on another initiative he's been working on in his company, which is to bring that model into schools. 300 schools they've committed to setting up energy audits that the students help to do. Maybe the students can actually see the boiler in their school, you know, see where the heat comes from and try to understand ways to save money.
I'm hearing from all of you, strong piece, good idea, serious innovation. You're all for it. Okay, well.
