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Richard Johnson, vice president of Matrix Development Group in Cranbury, NJ, is heading his company’s efforts to incorporate sustainable building practices and energy efficiency into both their existing and their planned projects. GlobeSt.com spoke with Johnson about the steps the company is taking.

Globest.Com: What’s behind the decision to “go green”?

Johnson: It’s from owners understanding the competitive nature of the market and how to differentiate yourself and tenants looking at corporate responsibility and being able to predict long-term energy costs. It’s rare to have a discussion about a real estate requirement where the issue does not come up. What was once led by academic and institutional sources is now being provided by the commercial real estate industry. Whether you believe in global warming doesn’t really matter. If you believe in efficient use of resources and differentiating your product in a competitive marketplace, our feeling is you can’t ignore it.

Globest.Com: What is Matrix doing to create a platform for sustainable building?Johnson: We’ve been trying to take what looks promising and find out if it really works. There’s a lot of anecdotal information but not a lot of data. Most available information relates to office buildings. We’re asking, how do you translate it to industrial? For example, warehouses and distribution centers typically have low demand for energy, but it’s easier and cheaper to install solar on industrial buildings because they have large, flat roofs. But it’s a full set of issues, not just energy. How do you use water? How do you handle storm water? How do you handle trucks idling. There’s a very comprehensive set of analyses you have to do.

Globest.Com: What are the major issues related to solar energy?

Johnson: There are some specific transactional challenges when you put solar arrays on roofs. There are a couple ways you could go: you could purchase the panels yourself, then pass the power costs through to your tenants over a specific term; or you can work out an agreement with a third party that will own the equipment. The second is typically called a power purchase agreement, which is a contract to buy a certain amount of electricity for certain period of time at a certain cost in exchange for them putting a solar installation on your roof. But then the question is, do you lease the space on the roof or give them an easement or license? Which one you do has impact on the cost.

Globest.Com: Do you favor ownership or purchase agreements?

Johnson: For us, it would appear the power purchase agreement is the more viable option for large facilities. But there really is no set solution. We analyze each opportunity case by case. Long-term, these are potential revenue sources as well, so sometimes maybe it makes more sense to own. But solar is only one piece of the puzzle. You have to look at total energy demand. It’s not just the power source but also power use, power conservation. Compact fluorescent fixtures cut power demand in half compared to metal halide. Then there’s the efficiency of the HVAC equipment and insulation.

Globest.Com: How important are government incentives?

Johnson: For solar, the economics don’t make sense without renewable energy credits. If they did not exist, solar would not be feasible.

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