Last Friday, President Obama committed to putting $2 billion into energy upgrades of federal buildings as part of the Better Buildings Initiative (funded by private and public sources), demonstrating further commitment to pushing for sustainable buildings. Read more on the Initiative here.
On a related topic, the federal government already mandates that its agencies lease space in Energy Star-labeled buildings. If you are a building owner, are you recognizing the opportunity to attract government lessees with energy upgrades and/or an ENERGY STAR label?
The 2007 the Energy Independence & Security Act (EISA 2007) was intended to aggressively reduce our nation’s energy consumption. Section 435 of the Energy Independence and Security Act mandates that “no Federal agency enter into a leasing contract on or after December 19, 2010, for any building that has not earned the ENERGY STAR label in the most recent year, unless the space requirement is in compliance with specific exceptions provided in the EISA statute.”
If you are a building owner and your building(s) is not ENERGY STAR certified, visit www.energystar.gov, where you will be able to input your building’s energy consumption information, and then apply for an ENERGY STAR label, if your building qualifies. ENERGY STAR is a scaled rating system that ranges from 0-100, where buildings rating anywhere from 75-100 is granted an ENERGY STAR label (after professionally verified by an energy engineer.) The US Department of Energy uses the ENERGY STAR label as an indicator of “superior energy performance.” The DOE also claims that “buildings carrying the ENERGY STAR label consistently use, on average, 35% less energy than their peers and emit 35 percent less carbon dioxide.”
So is every agency looking for ENERGY STAR-labeled buildings now? Well, not exactly. The four exceptions to the mandate allow a fair amount of wiggle room. They are as follows:
- No space is offered in a building with an ENERGY STAR label in the delineated area that meets the functional requirements of an agency, including location needs;
- The agency will remain in a building they currently occupy
- The lease will be in a building of historical, architectural or cultural significance verified by listing or eligibility for listing on the National Register of Historic Places;
- The lease is for 10,000 rentable square feet or less.
Nevertheless, there is plenty of opportunity for building owners to build value and market their energy efficient building through the ENERGY STAR label. If your building rates below a 75, it might be easier (and cheaper) than you think to make adjustments to raise your score. An energy consultant can analyze the most effective and low cost energy efficiency measures (EEMs) for your building, such as:
- Lighting upgrades
- Building automation and controls
- Office equipment energy management
Many of these EEMs pay for themselves in just a few years through reduced energy costs.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Tony Liou
Tony Liou is the founder and President of Partner Energy, a division of Partner Engineering and Science that offers helps its clients improve their properties’ energy, water, and carbon efficiency, as well as property resilience and sustainability. Tony frequently shares his insights and discusses best practices at speaking engagements and through industry publications. He has presented at conferences including MBA CREF, NAREIM Meetings, CREFC Annual Conference, Environmental Banker Association (EBA) Annual Meeting, and IMN ESG Forums.
