Evaluating the Benefits and Costs of Increased Water-Use Efficiency in Commercial Buildings

This report presents an analytical framework and describes a spreadsheet-based tool to help commercial building owners make reasoned judgments about various water-efficiency investment options. The framework considers the costs that are typically incurred when improving efficiency and seeks to include many tangible financial benefits. Specifically, it considers the avoided water, wastewater, and energy costs realized through increased water efficiency and allows the user to specify tiered utility rates that can have a significant impact on investment decisions. As future water savings from efficiency investments cannot always be forecast with certainty, the model includes an innovative scenario-analysis capability to consider variable increases in utility prices. Although the costs and water savings of efficiency devices may also be uncertain, the framework described here assumes that these characteristics are known with certainty. To demonstrate, the report provides a case study of two configurations of the current RAND headquarters building (one with current fixtures and one with older ones). Results for any efficiency package upgrading pre-1992 fixtures suggested highly favorable investment returns, especially upgrading all devices to the 1992 standard and replacing urinals with non-water-using designs. For the building configuration with post-1992 fixtures, only efficiency packages that include replacing existing urinals with non-water-using models performed well.