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Building Energy Efficiency Through Mandatory Improvement Programs

April 30, 2019

Major cities across the United States feel palpable tension between the demands of exploding population growth and developing an infrastructure that can meet the modern standards of energy efficiency. To keep efficiency front and center, many cities, counties, and states have implemented local laws to measure and improve the energy and water performance of buildings in their jurisdictions.

Energy Benchmarking: Mandatory Improvement Programs

These mandatory building efficiency policies are fairly new in the U.S., unlike the optional (and more well-known) Leadership in Energy and Environmental Design (LEED) certifications, which launched in 1994 and is shepherded by the U.S. Green Building Council. Understanding and managing these new policies can be complicated for building owners and managers, as local laws have different phase-in dates and requirements (or exemptions) for each building, based on square footage, primary use type, and historical performance.

How to Comply?

Compliance pathways generally include periodic building audits, retrocommissioning, and/or other efficiency project implementation. Essentially, if building owners and operators are not improving the performance of a facility, local jurisdictions will mandate energy audits and onsite efforts to improve performance, or issue a fine.

Proactive building owners with well-performing buildings can often get these requirements waived by first validating and then providing data to local jurisdictions to show they've already hit certain energy reduction thresholds.

For example, if a building can show a 15 percent reduction in energy use over the last five years in Boston, it does not need to complete an audit or implement additional efficiency efforts. Buildings with an ENERGY STARĀ® score above 49 in Orlando are also exempt. Regulations can be more stringent in cities like San Francisco, where one pathway to compliance is earning the ENERGY STAR certification for three of the last five years.

More and More Jurisdictions Creating Policies

Jurisdictions such as New York and San Francisco have had building efficiency polices in place for several years, and many buildings there have already had to complete their first round of efficiency actions. Buildings in jurisdictions such as LA, San Jose, and others will soon be required to manage their first rounds of compliance.

Many of these local policies are being driven by the need to ensure new commercial buildings meet the necessary energy and water efficiency performance guidelines. Boulder, whose original energy efficiency policy was signed into law in 2015, will have its first round of mandated audits in 2019, with further required audits recurring every 10 years. With exploding growth in commercial construction, meeting these requirements can be the difference in hundreds of thousands, or even millions, of dollars spent on utility costs by tenants.

A 2018 report from the Brookings Institution identified San Jose as one of the fastest growing economies in the country (and second fastest, globally), seeing a nearly eight percent growth between 2014 and 2016. The city will require audits for multifamily and nonresidential buildings of 50,000 square feet or more, with a goal of creating sustainable infrastructure that eases the burden on energy demands, ultimately paving the way for a more robust renewable energy technology implementation.

Not far away in Reno, NV, audits will begin being phased in for buildings over 100,000 square feet in 2026, which should include casinos as well.

New York City, with its more than 33,000 impacted buildings has been phasing in audit requirements yearly since 2013. Between nonresidential, multifamily or public/governmental buildings, these audits affect over two billion square feet of space, noteworthy considering the age and condition of some of NYC buildings.

The Future of Building Energy Efficiency

The increase of major cities undergoing mandatory audits in the next five years is indicative of the emphasis being placed on creating sustainable infrastructure. In most cases, some kind of daily fine is applied for non-compliance, and in a few instances, like in Boulder, failure to meet the audit standards could result in a fine by the square foot of up to $1,000 per day.

The tipping point between operational efficiency and commercial ROI has traditionally fallen toward the path of least resistance. That is, the cheapest energy prevails over sustainability and efficiency. As cities continue to address the challenges of urbanization, the balance may begin to tilt in the other direction as regional supply and demand constraints keep a floor on or increase energy pricing. Lastly, the long-term viability of efficiency continues to look appealing as the cost to decarbonize our energy sources will also keep energy pricing from bottoming out.

For a complete look at jurisdictions with benchmarking and other mandated building efficiency policies, check out our policy map.

SOL VISTA helps buildings quickly and continuously reduce utility expenses through a unique combination of onsite services and its performance data analytics platform, Skywalk.

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