The man behind the green refurbishment of one of the world’s most famous buildings has said that the money put towards subsidies for large renewable energy projects would be better spent on improving the energy efficiency of the world’s building stock.

Anthony Malkin, whose Empire State Building Company owns the iconic New York skyscraper, told BusinessGreen that subsidies to increase wind or solar energy capacity are not as effective in terms of carbon savings or job creation as incentives that promote the renovation of existing buildings.

“The cost of energy efficiency per watt is a third to a quarter of the cost of alternative energy,” he said in an interview at the Euro-Mediterranean Energy Efficiency Forum in Monaco earlier today.

“We have to ask ourselves why we are giving massive subsidies to wind and solar when energy savings are less expensive and when 60 per cent of solar panels and wind turbines are manufactured overseas.”

Malkin also criticised what he sees as the different assessment standards applied to energy generation and energy saving, so that new energy generation is not expected to show returns for 20 years, but investors make “just three- to five-year decisions on energy savings”.

He also argued that shifting the focus from saving carbon to saving energy could make it easier to drive investment in energy saving measures.

“Pricing carbon is not as effective as a method for decision making. A watt is probably the most traded commodity in the world and has very transparent pricing. It’s tangible and everyone can understand it,” he explained.

“You can also immediately translate the cost of a watt of savings and generation. Even if a watt of energy saved is the same cost of energy generated, we have a decision to make.”

Research published yesterday by building technology firm Johnson Controls identified obtaining finance as the major barrier preventing firms adopting energy efficiency measures.

However, Malkin argued that the green building and retrofit sector should attempt to overcome these barriers by initially targeting large, cash-rich firms operating sizeable property portfolios.

“If you can’t afford to improve your building you can’t do anything. But if you can afford it, you can afford energy efficiency,” he said.

“We should pursue the biggest consumers first. Large office buildings, hospitals and campuses use the most energy and offer the shortest-term payback.”

Malkin has attempted to lead by example. After taking management control of the 102-storey Empire State Building in 2006, he led an overhaul of the skyscraper’s interior that incorporated simple energy efficiency measures such as refurbishing all 6,514 windows and installing insulation between radiators and the exterior wall.

Each heat-reflecting window cost just $750, compared to $3,000 for a new window, Malkin said, adding that the simple improvement could contribute to a 38 per cent reduction in the building’s energy use when the retrofit project is completed in 2013.

The total refit is expected to cost $550m, but only $93m was focused on energy efficiency and just $13m of this was over and above an original plan which contained no efficiency measures at all.

“This goes against $4.4m of annual savings,” Malkin said. “It’s a three-year payback. People assume energy efficiency is an expense beyond everything else. What they don’t realise is it’s incorporated with everything else.”

He also argued that the company had realised significant commercial benefits as a result of the green improvements.

“When I took over the building our rent was around $26 per square foot,” he said. “Now it’s mid-$40s to $60 and we have the highest qualifying credit tenants. We did not see these tenants before.”

By Will Nichols