By Jon Moeller
Though preserved for the remainder of 2017, ENERGY STAR is still on the list of programs to be eliminated, according to the current administration’s 2018 Budget Blueprint.(1) How has ENERGY STAR influenced the commercial building industry, and what would the program elimination mean for energy efficiency in corporate and industrial facilities like yours?
The Environmental Protection Agency (EPA) started administering ENERGY STAR in 1992 as a voluntary labeling program that identifies and promotes a diverse range of energy efficiency products.(2) In 2000, ENERGY STAR developed an energy performance rating system for commercial buildings and facilities, providing a much needed means to benchmark the energy performance of similar buildings, with data collection through its free online Portfolio Manager tool. For industrial facilities, ENERGY STAR offers Plant Energy Performance Indicators (EPIs), which can be used to evaluate the performance of individual plants and the range of energy performance within a given industrial sector.(3)
Today, more than 450,000 commercial buildings and facilities actively measure and track their energy usage with Portfolio Manager, and gain insights into how their buildings and facilities perform based on over 150 different metrics offered by the tool.(4) My company’s solution, MACH Energy Management Software, integrates with Portfolio Manager, and together our customers use ENERGY STAR to assess how their properties are performing initially. Tools like this are used as a next step to identify operational savings initiatives, adopt an energy management strategy, and report and showcase their energy saving efforts to stakeholders.
Through ENERGY STAR, the EPA has seen that most facilities can improve their total energy performance by 2-10% every year.(5) The EPA estimates that ENERGY STAR has saved $326 billion on utility bills and reduced 2.5 billion tons of greenhouse gases since its induction. Annually, the program costs $57 million operate but saves $34 billion.(6)
ENERGY STAR is considered one of the most successful voluntary energy efficiency programs ever implemented, and cutting it may result in significant economic and environmental consequences. In 2015, businesses had a cumulative cost savings of $3.4 billion on utility bills through ENERGY STAR and prevented more than 17 million MtCO2e of greenhouse gas emissions. Additionally, the program has been instrumental in creating jobs in the manufacturing, energy efficiency, retrofitting, and construction industries.(7) Conversely, eliminating ENERGY STAR may potentially generate cuts to the workforce as energy costs are not as effectively controlled, subjecting companies to higher prices due to volatility in energy markets.
The fight to keep ENERGY STAR is critical. But there is hope, as support for ENERGY STAR is bipartisan. The program has significant backing from often business-oriented real estate groups who recognize its economic benefits, as well as environmental advocates. BOMA, NAREIT, IREM, Real Estate Board of New York, International Council of Shopping Centers, and National Apartment Association are just some of its supporters. In 2016, Congress passed a bipartisan Tenant Star bill as well.
In the meantime, despite the uncertain fate of ENERGY STAR, there is a notable increase in local and state ordinances. Cities across the nation from New York to Denver to Los Angeles are continuing the trend of efficiency by instituting building energy performance mandates that require benchmarking and energy usage reductions. Over the years, MACH has found most industry participants are ROI-driven, and energy efficiency efforts including ENERGY STAR simply make economic sense, particularly for commercial buildings and facilities.(8)
There has been a corresponding uptick in interest from energy, sustainability, and building professionals in utilizing energy management technology to better manage their buildings and facilities. In fact, according to MACH’s industry survey reports, a net 14% more surveyed building professionals adopted energy management software in 2016 than in 2015, dovetailing with the trends found in other industry studies.(9)(10)
Industry alliances like the Alliance to Save Energy have been circulating letters of support for ENERGY STAR, which numerous companies have already signed. Meanwhile, we are confident that saving money and improving efficiency are here to stay, especially with the growing support from local and state benchmarking initiatives.
9 MACH Energy Industry Reports – 2015; 2016
10 http://www.costar.com; http://urbanpolicy.berkeley.edu/pdf/aer_revised_proof_101910.pdf
Moeller is CEO of MACH Energy, a provider of cloud based energy management software, where he also heads sales and corporate development. Prior to joining MACH, he spent a decade in financial services business development and transactional roles at Banc of America Securities, Cowen and Co., and Storage Technology Corporation. Moeller is also currently President of a mixed-use project based in San Francisco, and an active member of ULI San Francisco’s Sustainability Committee.