Smart building technology is revolutionising energy consumption in commercial buildings, a section of the urban environment that has habitually been the biggest contributor to “energy waste” and climate change. Well over 5 million commercial buildings in the US now incorporate smart technologies, which not only reduce energy consumption but also increase productivity, comfort and safety of building occupants.

However, such "smart makeovers" are still only feasible for buildings over 100,000 square feet, meaning huge energy saving potential and building automation business opportunities remain in the field of small to medium sized commercial spaces. There should be a rethink of the cost structure within smart building automation for smaller spaces.

According to the U.S. Energy Information Administration, these larger buildings comprise only 6% of the US commercial building stock. Even looking in terms of floor space, buildings less than 50,000 square feet comprise 50% of the total floor-space, which means that they, in turn, use about half of the total energy consumed by all commercial buildings. Nevertheless, building automation technology and installation does not account for the spending power and cost-benefit structure of these small commercial spaces.

For example; a typical two story commercial building, comprising of 20,000 square feet of office space, looking to install a modern building automation system would face the following cost structure:

• Workstation and hardware $4,000-$6,000 (initially)
• Programming, engineering, project management and graphics $10,000 – $12,000
• Electrical installation $4,000 – $7,000.

Meaning the estimated cost of basic building automation would be in the region of $18,000 to $25,000. This makes in difficult for real estate operators and building owners to get workable return-on-investment to allow such projects to move forward. The same controls that are used for larger commercial buildings can readily be used for smaller projects as well. In fact, this is a fairly common approach for owners such as school districts that want to use the same system to monitor larger and smaller schools. The only real challenge here is cost.

Simplification and standardisation is required in the building automation industry to reduce labour costs in engineering and push away from the “trial and error culture” in software development. If the building automation industry simplified engineering and programming that would make projects more affordable, we would see far more sustainable small buildings with the benefits of energy efficiency, operating analytics and IoT connectivity.

Furthermore, as a market grows costs will naturally come down, but despite its size the small commercial building market has not yet brought about a cost effective building automation offering.

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The home automation market, meanwhile, has become the focus of major technology firms eyeing up a mutli-billion dollar market. Consequently, considering many small commercial buildings are not much larger, nor more complicated, than a large residence, home automation technology should have a knock on effect for small commercial spaces.

There are a number of new products on the market that are specifically focused on small building automation. Most of these start with a smart communicating thermostat (wired or wireless) that in turn connects to a central panel which can control additional loads, such as lighting. Commercially, these systems are often focused on certain types of buildings such as retail or restaurants. They offer energy saving potential at an attractive price point.

Systems that provide for web-enabled automation of HVAC, lighting, and plug loads are now available off the shelf for all manner of small building. Even more intriguing are some of the new solutions being sold by cable and phone companies in the US, that offer security, HVAC, lighting and security. The entrance of large technology companies into the home automation space is anticipated to lead to rapid growth.

Is it reasonable to expect that the same systems being designed for homeowners will be the ones adapted for the small commercial building market? Wherever the development comes from, it is time for the small commercial building automation market to evolve.