By Ivan Aron
From the October 2023 Issue
Across the nation, dozens of state and city government agencies are implementing more ambitious regulations to reduce the energy consumption of commercial buildings and their emissions within the next three to five years. Failing to comply with emissions and energy use regulations comes with significant risks for building owners, including the possibility of hefty penalties and damage to public perception and competitive positioning in the marketplace. As such, the urgency to reduce energy consumption is here.
Meeting Decarbonization Requirements: One Step At A Time
While each city and state unique requirements around complying with decarbonization goals, there are steps building owners should take to create a successful path to meeting compliance requirements.
Step 1: Benchmark Energy Data
Knowing the amount of energy a building consumes is the first step in identifying the energy use reduction that will meet the regulatory goal. Start by registering the building at the Energy Star Portfolio Manager® website, an online energy management and tracking tool developed by the U.S. Environmental Protection Agency (EPA). The team can enter, track, and trend the building’s energy use data there. The website can convert energy use information from the building’s utility bills to determine its Energy Use Intensity (EUI).
A low EUI score typically signifies good energy performance. EUI is calculated by dividing the total energy consumed by a building in one year (measured in kBtu or GJ) by the total gross floor area of that building (measured in square feet or square meters).
Step 2: Conduct An Energy Audit
Regulators may require an energy audit of the building to identify energy waste and determine which upgrades and retrofits are needed to improve energy efficiencies. Energy audits should be completed as soon as possible to allow sufficient time to plan for and implement necessary improvements.
Step 3: Budget And Plan
Based on the energy audit findings, the next step is establishing a budget and creating a roadmap for implementing upgrades and improvements to meet the city’s or state’s requirements.
The budget should cover the investments needed to implement upgrades, retrofits, and improvements that will reduce energy enough to meet the EUI goals. Be sure to account for the cost of any outside experts needed to guide the team through the assessment, planning, and implementation.
The budgeting and planning phase can take anywhere from six to 18 months.
Step 4: Implementation
Based on the energy audit, there may be a long list of upgrades and improvements needed to improve the building’s energy consumption and meet critical compliance milestones. For example, heat pump boilers and chiller systems may need to be updated or optimized. Installing energy-saving occupancy, vacancy, daylight sensors, lighting control systems, solar technology, smart thermostats, and new windows can reduce EUI.
The implementation phase is where many owners get stuck. Identifying actionable, practical, and transitional steps will help right-size the task of meeting those milestones and moving forward toward compliance goals.
In addition to upgrading or installing new equipment, deploying building automation, utilizing data analytics, and integrating systems can also reduce energy use and deliver a return on investment in the long term.
Implementation can also be lengthy due to supply chain waits, labor needs, and training required to set the building and facility team up for long-term success.
Step 5: Measure And Verify
For building stakeholders seeking to demonstrate early compliance and take advantage of any incentives offered by city, state, and federal bodies, note any deadlines for submitting required documentation. The documents provided will likely need to demonstrate the efforts made to lower the building’s EUI.
The ROI On Meeting The Requirements
Ultimately, the responsibility of meeting city and state decarbonization requirements rests with the building owner. The motivation to meet those requirements is multi-fold and compelling.
THREE STEPS TO GET STARTED
1. Gather Information
Learn about the local and state regulations for energy usage, emissions, and decarbonization specific to commercial buildings, as well as any pertinent deadlines, especially as they evolve.
2. Get Stakeholders On Board
Establishing a budget, developing an energy management plan, implementing upgrades, and meeting compliance deadlines require an all-hands-on-deck effort as well as buy-in from building owner, managers and tenants. Key decision-makers should be aware of the urgency and advantages of meeting compliance deadlines and the negative consequences of missing them.
3. Start Now
Compliance deadlines may extend over multiple years, but don’t wait to start the process of meeting them. If you haven’t already, benchmark your energy data, conduct your energy audit, and develop your plan and budget for energy-efficient improvements as soon as possible.
Perhaps the strongest of these motivating factors are the potential penalties triggered by missed deadlines. These penalties can cost thousands of dollars annually and may include daily fines calculated per square foot. For buildings with expansive square footage, those costs quickly add up.
Lowering Energy Bills
Along with avoiding fines, meeting compliance is an effective way to lower energy bills, which provides a return on investment for equipment upgrades and technology implementations. Investments in energy-efficient upgrades generate a measurable return in energy savings and improved operations.
Building owners who demonstrate early compliance may qualify for incentive programs offered through city, state, and federal agencies. Most incentive programs have limited capital to pull from, and resources may be provided on a first-come basis. As such, building owners are advised to act swiftly to qualify for funding before it’s depleted.
Buildings that embrace energy efficiency are more attractive to tenants who are willing to pay more per square foot for a lower carbon footprint. In many urban settings where new construction boasts the latest and greatest energy-efficient technologies, commercial buildings must also embrace sustainability to compete in the marketplace.
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Supporting ESG Goals
With a growing focus on Environmental, Social, and Governance (ESG) goals, achieving compliance with local energy-efficient regulations communicates a commitment to carbon reduction to tenants, stakeholders, and the public. Energy consumption information is often publicly available and can assist with recognized LEED certification.
Complying with city and state energy efficiency regulations can avoid penalties and costs while giving buildings a competitive edge in a society that values sustainability. Beyond these financial advantages, working toward compliance provides the company an ideal opportunity to launch and propel ESG goals and play a vital role in reducing emissions for a cleaner, healthier city, state, and nation.
By staying informed, creating a plan and a budget, and taking the necessary steps sooner rather than later, building owners can meet compliance requirements and greater energy efficiency that delivers ROI back to the organization.
Aron, Vice President at Albireo Energy, is a product-agnostic energy expert who advises building owners and operators on how to use innovative technologies and approaches, including automation, system integration, energy benchmarking, and auditing, to create high-performing, sustainable buildings that meet compliance goals.
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